[2020-08-13] What Bitcoin Can Learn From Gold About Staying ‘Clean’

[gentlemand]

For one Bitcoin unlike Gold isn't a commodity meaning it can't be separated simply because of it's quality, source, or history as in the eyes of the wallet all of them are the same.

Bitcoin itself and any non custodial wallet is of course completely agnostic. A buyer, seller or third party platform facilitating a trade is not.

I'm sure there are many, many rent seekers looking for a hole to expand. This may be one of the prime ones they're exploring.

the real question then is how big will the premium be, and secondarily what will the world consider the real price to be---the set cartel price, or the unregulated spot price?

That would be extremely intriguing to observe. A price based on a market that most people can't or won't access won't make any sense for any real world usage when there's a likely bigger one in the real world.

[bbc.reporter]

It might also be that users will prefer dirty bitcoins because they are more available, cheaper and easier to use hehehe.

I guess it depends on which tiers emerge if this ever become a thing. There may be 'investment grade' which never leaves its custodians, then there'll be active mode which moves through exchanges and payment processors but will be easy to fall out of favour with, and then there'll be fuckhead mode which is for druggists and nonces and everyone else.

If none of them can interact with each other the whole thing is going to become a crippled mess, but I expect someone to get a brutal schooling before it gains a foothold.

However, when a large amount of bitcoins never leave the control of its custodians, it would open an argument that it might be failing. That is why I would also argue that grin's monetary policy might be a fix for this.

[Harlot]

For one Bitcoin unlike Gold isn't a commodity meaning it can't be separated simply because of it's quality, source, or history as in the eyes of the wallet all of them are the same.

Bitcoin itself and any non custodial wallet is of course completely agnostic. A buyer, seller or third party platform facilitating a trade is not.

I'm sure there are many, many rent seekers looking for a hole to expand. This may be one of the prime ones they're exploring.

If something like this would exist like people will be selling/auctioning of clean Bitcoin I doubt there will have a big market for it or they will profit much from it. Remember that the confiscated cryptocurrencies in custody of the authorities are also being auctioning of by them after and they sold it more of a wholesale price rather than profit so I really don't expect these untainted cryptocurrencies will have a difference in value just because it hadn't been involved in any kind of malicious activity. Like I said the worst thing that an unknowing person who has possession of Bitcoin connected to crime is just investigation and he will still be in possession of that Bitcoin after that.

[figmentofmyass]

Bitcoin itself and any non custodial wallet is of course completely agnostic. A buyer, seller or third party platform facilitating a trade is not.

I'm sure there are many, many rent seekers looking for a hole to expand. This may be one of the prime ones they're exploring.

If something like this would exist like people will be selling/auctioning of clean Bitcoin I doubt there will have a big market for it or they will profit much from it. Remember that the confiscated cryptocurrencies in custody of the authorities are also being auctioning of by them after and they sold it more of a wholesale price rather than profit so I really don't expect these untainted cryptocurrencies will have a difference in value just because it hadn't been involved in any kind of malicious activity.

the winning auction prices aren't released to the public, at least with USMS auctions. but think about the auctions that have occurred so far. remember tim draper? he outbid every single bidder on every single lot of BTC in that auction, all 30k of them. you think he did that by paying below the market price? logically, i would assume the opposite---he won every lot because he paid a premium. and IIRC this was during the worst of the 2014 bear market. other auctions have taken place during much more bullish times, when i would expect stronger OTC demand and therefore a stronger willingness on the part of bidders to pay a premium.

[Carlton Banks]

the real question then is how big will the premium be, and secondarily what will the world consider the real price to be---the set cartel price, or the unregulated spot price?

That would be extremely intriguing to observe. A price based on a market that most people can't or won't access won't make any sense for any real world usage when there's a likely bigger one in the real world.

that could easily end up like the situation the actual LBMA market is operating under: 5% (likely less) of gold supply is traded on the "clean" market.

The incentive for corruption would be quite high, the LBMA has had issues with their certification licensees standing accused of approving 'dirty' gold for trading, and were recently accused themselves of fudging the inventory numbers for another of their gold mint franchisees/subsdiaries (the bank of england, no less). In the latter case, it is entirely impossible to verify whether BoE are either innocent or guilty, as a key part of the surrounding issues is that the gold deposits that LBMA uses (e.g. BoE) have an explicit clause in their contracts that physical audits of their gold inventory cannot be conducted. "Clean" is not the word that most readily springs to mind (at least not as a noun ).

This sort of behavior (within the model system that the article suggests be adapted for Bitcoin) questions the motives and the need for any such system. I would expect such a system to get starved of liquidity, and also to be used as a way of manipulating the "official" BTC exchange rate. It would quite likely end in a multiple farce;

• Huge profits made from using Bitcoin's flexibility to get BTC both into and out of the cleancoins market without the cleancoins system or the blockchain recording these events
• Eventual loss of confidence in the cleancoins market, either because of the questionable exchange rate or dirty coins being washed on the market
• The open (i.e. black) market (in all it's guises) becomes the legitimate arbiter of the exchange rate