The crypto compliance lie: Sacrificing privacy does not make us safer

[witcher_sense]

Exactly. So why are people so keen to hand it over to governments to turn in to little more than tokenized fiat?

Maybe, it is their unwillingness to take on responsibility commands their minds and actions. People are scared of privacy because they think even talking about it makes them criminals. People are scared of self-custody of their funds because it implies responsibility and certain knowledge. People are scared of bitcoin because it is government control-resistant, anarchic in its sense, and, more importantly, it gives too much freedom to its users. People are scared of that freedom because it has been given to them without permission from governments. That freedom is uncertain (not yet regulated) and not approved by authorities. People dislike uncertainty and therefore strive to hand over their bitcoins to governments to "clear" them from the spirit of forbidden freedom. When they finally get rid of the burden of responsibility and freedom, they will be satisfied.

[DooMAD]

Also notice that it's only your privacy that's under threat.  These services aren't required to disclose to their customers how much BTC they're actually holding.  People don't seem to consider that if these companies are not holding sufficient funds to match that of their creditors, then there is a real danger of impropriety.  It's full transparency from the customer, but total secrecy from the custodian.  It's such a double standard.  

How do we know they're not operating fractional reserve schemes and merely giving us IOUs we might be unable to redeem later?  

Answer:  You don't.  

[witcher_sense]

Also notice that it's only your privacy that's under threat.  These services aren't required to disclose to their customers how much BTC they're actually holding.  People don't seem to consider that if these companies are not holding sufficient funds to match that of their creditors, then there is a real danger of impropriety.  It's full transparency from the customer, but total secrecy from the custodian.  It's such a double standard.  

How do we know they're not operating fractional reserve schemes and merely giving us IOUs we might be unable to redeem later?  

Answer:  You don't.  

Custodians that are running their business on fractional reserve scheme are inherently insolvent and consequently fraudulent. Should everyone presents claim on their share of reserves, such a custodian will bankrupt immediately. If custodians are obliged by law to satisfy everyone's claims, services should either avoid fractional reserves at all costs to stay in business or stop their business and declare bankrupt instantaneously. On the other hand, if they are not obliged by law to operate on "100% backed by bitcoin" model, it would mean governments support these fraudulent activities, insolvency and unbacked bitcoin IOU ( IOUTXOs if you like).

[o_e_l_e_o]

People are scared of privacy because they think even talking about it makes them criminals.

Which is exactly what the government and their associated three letter agencies want you to think. A scared populace is a compliant one. Someone who is fearful of being constantly watched adopts the mindset of being as meek, as unassuming, as compliant as possible. We must challenge this view everywhere we see it. Without privacy there is no freedom.

When they finally get rid of the burden of responsibility and freedom, they will be satisfied.

I don't disagree with that, but my message to those people is: Fuck you. If you don't care about your privacy then I'll tell you why you are wrong, but ultimately, it's your decision. If you don't care about what bitcoin was designed for and just want to speculate on the price, then go ahead. But you do not get to try to hand bitcoin over to the government/banks/regulators/other centralized third parties and ruin it for the rest of us just to make yourself feel better. If you don't want to use an unregulated currency, then the correct option is not to try to regulate it - the correct option is for you to go back to fiat.

How do we know they're not operating fractional reserve schemes and merely giving us IOUs we might be unable to redeem later?

Both Huobi and OKCoin were already found to running a fractional reserve and using customer deposits to invest in a variety of high risk products to make more profit for themselves, all without the knowledge or consent of their users.

[tbterryboy]

The government has always wanted to be in charge of everything. At first they despised cryptocurrencies and wanted to stop them, but later they realized that they won’t be able to stop it, as the rule says – if you can’t beat them, you join them, they are now trying penetrate into the cryptocurrency environment, soon they will try to place some kind of asunder that will frustrate people that are making use of crypto.

And it’s not just about that, when the government takes over in this space, that means you will have to be paying any fees they decide plus other things that they will try to introduce to ruin everything. So with this new law they are trying to setup, so if you buy crypto from centralized exchange you won’t be able to move it to your private wallet? Jokers.

[20kevin20]

What's the issue with the law-abiding group of people? We indeed have a two groups of people here in this forum - one, who wish to comply with the KYC request and pay taxes and two, who wish to remain anonymous. But if we really want bitcoin to become a new world currency, regulation is the only way towards it. Bitcoin will never be able to become mainstream if we resist regulation, in that case, it will stay only as a parallel currency system like it is today! There will definitely be a few crypto-friendly countries, but majority of the world governments will become more hostile against it!

If someone agrees to comply to these absurd laws, let them do so. The main issue is that, once they do, it becomes mandatory for all of us. The second group, which wishes to remain anonymous, is always going to be at a disadvantage because of the first. It's just like the first group is enforcing the second to comply.

I would not mind laws that are not intruding my private life, but unfortunately that's exactly what these laws do. I agree with the adoption of stuff that fights against crimes, but here in Romania we have something called presumption of innocence and I think I have the right to have it.

One of the issues I see with the mindset of the vast majority of people is that, as you have also mentioned in your post, most think that the law-abiding group pays taxes while the second doesn't. I pay my taxes and everything I do is legal, although I'm looking to be as anonymous and private as I can be. Yet, it's funny how people would get angry at me over my $60 Amazon order I supposedly haven't paid taxes for when there are trillions of USD moved around every year by politicians and high-tier personnel nobody cares about and nobody pays taxes for.

At this point, looking at how things evolve and that apparently even YouTube is moving towards identity verification, I think I'd honestly rather see Bitcoin as a parallel economy or an underground currency than submit to shitty laws and regulations. Let me be free, under my own cloak, living in a non-Orwellian state. The worst thing is, the "Bitcoin & crimes" excuse has been used so exhaustively that it honestly surprises me seeing how people don't realize the regulations are a plan to defeat BTC and everything Satoshi wanted to create!

Realistically, Bitcoin cannot be a world currency. The authorities know that, yet they push heavily for absurd laws that only lead to more control from their side and least decentralization and freedom on ours. Nobody will ever be able to convince me that a country leader will ever support a currency they cannot control. They're leaders because they want control and power.

Regulation is fine, but limited and non-intruding one. If wealthy owners have a lot of privileges we don't have access to and have lots of ways to get away with tax payments, I can't see why Bitcoin owners should be this limited. Ah, precious metal regulations are coming as well.. looks like I forgot for a moment that the average Joe should not be allowed to exit the wage slavery class, according to the current system we're living in.

You see, we're living in a world where we want fairness although the ones giving us orders are the least fair. As long as you don't have evidence that I'm doing anything illegal with my decentralized currency, what I do with my coins should be nobody's business.

[KIZILAGA]

 Bitcoin power comes from resistant to censorship..But transparent ledger makes it flawed..


"The fact that clients have to keep the entire history reduces the privacy benefit." Satoshi on Bitcoin.

[Lorence.xD]

The government has always wanted to be in charge of everything. At first they despised cryptocurrencies and wanted to stop them, but later they realized that they won’t be able to stop it, as the rule says – if you can’t beat them, you join them, they are now trying penetrate into the cryptocurrency environment, soon they will try to place some kind of asunder that will frustrate people that are making use of crypto.

What the government is doing is is justifiable in their side, they see that something threats their control then they try to neutralize it. It is one of the most basic functions of government, make the people line up so no chaos ensues. In this case though, they are in the wrong. Invasion of privacy no matter how small is still an invasion of privacy

And it’s not just about that, when the government takes over in this space, that means you will have to be paying any fees they decide plus other things that they will try to introduce to ruin everything. So with this new law they are trying to setup, so if you buy crypto from centralized exchange you won’t be able to move it to your private wallet? Jokers.

They see this as a potential cash cow so natural instincts kick in and they try to impose taxes or fees on transaction. There is nothing wrong about it though, taxes are the lifeblood of the nation, projects like roads, bridges, infrastructures, welfare programs and other social services are funded by these taxes, it may look scummy but this is necessary for the growth of the nation, to put it in a way, taxes are a necessary evil.

[Karartma1]

What's the issue with the law-abiding group of people? We indeed have a two groups of people here in this forum - one, who wish to comply with the KYC request and pay taxes and two, who wish to remain anonymous. But if we really want bitcoin to become a new world currency, regulation is the only way towards it. Bitcoin will never be able to become mainstream if we resist regulation, in that case, it will stay only as a parallel currency system like it is today! There will definitely be a few crypto-friendly countries, but majority of the world governments will become more hostile against it!

At this point, looking at how things evolve and that apparently even YouTube is moving towards identity verification, I think I'd honestly rather see Bitcoin as a parallel economy or an underground currency than submit to shitty laws and regulations. Let me be free, under my own cloak, living in a non-Orwellian state. The worst thing is, the "Bitcoin & crimes" excuse has been used so exhaustively that it honestly surprises me seeing how people don't realize the regulations are a plan to defeat BTC and everything Satoshi wanted to create!

At some point in the future expect KYC everywhere on the internet. Everywhere there will be walled gardens. Can't you see it already? Almost every site you visit wants to know almost anything about you. DIDs (digital identities) will be rolled out sooner than you think and all our activities online will be monitored and linked to whom we really are. Am I being too pessimistic? I don't think so, just look around.
We gave up freedom for comfort, that's the least we can get.

[carlisle1]

At some point in the future expect KYC everywhere on the internet. Everywhere there will be walled gardens. Can't you see it already? Almost every site you visit wants to know almost anything about you. DIDs (digital identities) will be rolled out sooner than you think and all our activities online will be monitored and linked to whom we really are. Am I being too pessimistic? I don't think so, just look around.
We gave up freedom for comfort, that's the least we can get.

Exactly what is happening now,Almost in each site we need to download or Enter there must be a KYC and you may not visited the entire site without Filling the form.

I don't know if this is totally legal but i find this abusive because KYC must be required if we need to take something in return from their site but for inquiries or something we have just to read?KYC must not be implemented.

Bitcoin power comes from resistant to censorship..But transparent ledger makes it flawed..


"The fact that clients have to keep the entire history reduces the privacy benefit." Satoshi on Bitcoin.

+1 on this part.

But Still  am for full privacy not unless it requires taxation since i don't want to evade rules.

[o_e_l_e_o]

There is nothing wrong about it though, taxes are the lifeblood of the nation, projects like roads, bridges, infrastructures, welfare programs and other social services are funded by these taxes

Or, in the case of the US, our taxes fund bombing civilians and buying lambos for health insurance middlemen.

Almost every site you visit wants to know almost anything about you.

What websites are you visiting? I cant remember the last time I used a website which wanted to know more than an email address (which of course would have been a disposable email).

DIDs (digital identities) will be rolled out sooner than you think and all our activities online will be monitored and linked to whom we really are.

All the more reason to fight back and challenge opinions which think government oversight of bitcoin is a good thing.

[20kevin20]

Am I being too pessimistic? I don't think so, just look around.
We gave up freedom for comfort, that's the least we can get.

You're being realistic. It's the unfortunate truth people do not want to hear and acknowledge. It's sometimes easier to accept and live in a false reality, where you're being told what to think rather than thinking on your own.

What websites are you visiting? I cant remember the last time I used a website which wanted to know more than an email address (which of course would have been a disposable email).

@Karartma1 is probably talking about websites collecting your fingerprint & digital behavior and scrapping as much data as possible.

[Karartma1]

Am I being too pessimistic? I don't think so, just look around.
We gave up freedom for comfort, that's the least we can get.

You're being realistic. It's the unfortunate truth people do not want to hear and acknowledge. It's sometimes easier to accept and live in a false reality, where you're being told what to think rather than thinking on your own.

What websites are you visiting? I cant remember the last time I used a website which wanted to know more than an email address (which of course would have been a disposable email).

@Karartma1 is probably talking about websites collecting your fingerprint & digital behavior and scrapping as much data as possible.

Yes, I am talking about basically every internet site that farms, collects, shares and analyses whatever a poor user can not even understand.
They go click after click not knowing that every action they do is monitored (https://www.hotjar.com/ anyone?), they leave unique fingerprints as they switch from one shop to the other (and then they ask why did I get that camera ad straight after sending an email to a photographer friend?) I could go on forever.
@ o_e_l_e_o I believe we are old-fashioned users, we know how to circumvent and avoid being tracked, tagged, scanned and so on.
But the majority is made of people who will gladly sell their privacy to keep on being on soma on the internet (brave new world inspired me on this last one).

[BIN-BIN]

This will be a sell out of the freedom we enjoy I'm the crypto space which is being free from third party involvement and also being free to be private in our financial dealings. If the government succeede in putting into place laws to control the cryptocurrency space it will be a total fail out of it original content.

[Carlton Banks]

It is ridiculous, but now we have bitcoin that fixes this injustice and is able to give us a way to opt out from that evil system of total surveillance.

Exactly. So why are people so keen to hand it over to governments to turn in to little more than tokenized fiat?

they are entitled do howsoever they choose, but such a thing will be not Bitcoin (as you say)

it amounts to riding the momentum of what Bitcoin truly does without wanting to use it. There are many such users (here on the forum for instance), I would be quite happy to see their involvement reduced in such a way. They aren't cut out for this (and are often quite proud of it)

[o_e_l_e_o]

it amounts to riding the momentum of what Bitcoin truly does without wanting to use it. There are many such users (here on the forum for instance), I would be quite happy to see their involvement reduced in such a way. They aren't cut out for this (and are often quite proud of it)

I, obviously, would like more people to actually use bitcoin for what it was intended - a currency - rather than just buying some on an exchange, holding it there, and waiting for the price "to moon" (God, I hate that phrase). Having said that, as much as I encourage people to learn about bitcoin, to hold their own bitcoin, to use and spend bitcoin, I am never going to seek to limit or prevent people who are only here to speculate. Such is the beauty of bitcoin - you can use it how you want to.

However, I draw the line at when people like this want to force me to use bitcoin how they want me to. "Regulation is good for bitcoin!" Is it though? Or is it good for people who want to buy, hold, and sell, on a single platform for the sole reason of increasing the amount of fiat they have, without ever actually using, spending, or even understanding bitcoin.

[Ucy]

I wonder what they think of people who withdraw money from banks for self-custody, or people who prefer to self custody their gold or other assets... dark fiat/gold users? Well, you only hear strange things like this on the internet and this "modern world". I don't think it will work. Will only work on people who accept them and live in their controlled system/world.
 I wonder if they think through things like this before publication.

[Charles-Tim]

I wonder what they think of people who withdraw money from banks for self-custody, or people who prefer to self custody their gold or other assets... dark fiat/gold users? Well, you only hear strange things like this on the internet and this "modern world". I don't think it will work. Will only work on people who accept them and live in their controlled system/world.
 I wonder if they think through things like this before publication.

Governments do not like people to have privacy, but they do say they want people to have privacy. It was not surprising when US COJ are making moves and progressing in compromising end-to-end encryption, they said it will be in a way peoples data can be accessed only during certain conditions with certain reasons, that peoples privacy will still be protected. Is there anything that can protect privacy than end-to-end encryption? I do not think so. When there could be self custody of fiats, the governments will only still try their best to compromise privacy of bitcoin users.

[o_e_l_e_o]

they said it will be in a way peoples data can be accessed only during certain conditions with certain reasons, that peoples privacy will still be protected.

An obvious lie. History has shown us that whenever a government or administration in pretty much any country in the world gives themselves the power to decrypt, intercept, or otherwise spy on their citizens' communications, regardless of all the talks about "only in specific cases" and "catching terrorists", such power is used for mass surveillance of the population and makes little or often zero contribution to effective law enforcement or preventing terrorist attacks.

When there could be self custody of fiats, the governments will only still try their best to compromise privacy of bitcoin users.

Self custody of large amounts of fiat is difficult and risky as there is no effective way to back it up against theft, damage, or loss as there is with bitcoin. It's also inherently costly, as the fiat you hold constantly devalues, and if you aren't investing it to earn interest which at least matches inflation, then you are constantly losing money. Bitcoin self custody on the other hand is much safer, and generally speaking, the value of what you are holding is going to increase rather than decrease.

[Gotumoot]

So what's the use of having our own wallet if we would also need to have  a KYC for it?
Why would we even choose to use hardware wallets if it would all comes down to that point?
Some of us choose to have hardware wallet because it is our own key our own coin and we don't need to surrender our own information or register any details about ourself.