Is Bitcoin losing its purpose?

[BrianH]

Great article on Bitcoin.com that people should read. Crypto has the potential to usurp the banks, allow private, digital transactions, serve as a universal currency, escape from rampant fiat inflation, etc. People need to wake up, be more active in politics and be stronger advocates against KYC.

“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” -Satoshi Nakamoto
...
With this new U.S. infrastructure bill (now moved to the House of Representatives which is on recess until September 20), the EU’s plans to track all bitcoin transactions and ban anonymous wallets, the massive momentum CBDCs are gaining worldwide as countries responsible for 90% of the world’s GDP research and trial them — it is clear we are on the cusp of something unprecedented. Even the sacred realm of decentralized finance (defi) is no longer safe, with U.S. Securities and Exchange Commission Chairman Gary Gensler recently calling for more authority to regulate defi.

Contrary to Satoshi’s vision for peer-to-peer electronic cash without the need for a financial institution, the picture taking shape is one instead of complete, centralized, coercive control of private finance. Privacy and autonomy in money, in other words, are being made out as relics to be traded in for antiquated ideas of kings ruling peasants, disguised as modern and sensible “regulation.”

I think many retail investors in the US are Robinhooder types that have a "Bitcoin go up - me buy!" mentality. They don't realize what the loss of utility from anonymous P2P transactions will mean for Bitcoin.

If Bitcoin is KYC, DeFi coins have no hope of replacing the traditional banking system and CBDCs are everywhere, why use Bitcoin at all? Governments will likely ban it in the future anyway. China and the US infrastructure bill have already set a precedent for banning mining and development in those countries.

[Gyfts]

Europe has never cared about privacy, so anonymous tracking or banning of anonymous wallets isn't something that surprises me.

The US infrastructure bill isn't too much about tracking, it's just a dumb way to make sure everyone pays their "fair share" to the cows in the US government. They're forcing intermediaries like miners or 3rd party platforms to fill out IRS forms so they can be taxed, not much about privacy, they just want to dip their greedy hands in the crypto world because they are hemorrhaging money and want to cover themselves for spending 1.2 trillion dollars with an inflation rate already over 5 percent.

[bocyaj]

Don't spread the fake or negative news about the bitcoin in the forum.Because still had his originality and many new people investing their money blindly. Even in stock market, they will investigation the stock and then inverse their money.But bitcoin is different, many people invest blindly.

[mindrust]

Defi has nothing to do with bitcoin in the first place. Defi has been a scam just like NFT. These are different projects than bitcoin. Bitcoin on layer 1 cannot function as a currency though, that's not a secret however it works quite well as a store value. If you want to pay fast without waiting just use your credit card.

[Charles-Tim]

If anyone against CBDC, the person is also againsting Fiat, Bitcoin is not DeFi, Bitcoin is also not a replacement but an alternative, Fiat is inflationary while Bitcoin is deflationary, appreciative and increase in value, while you can make use of it and have privacy, unlike Fiat or CBDC, but there are many reasons we may still need Fiat or CBDC which are legal tender. But Bitcoin as an asset, also as money and appreciate in value over time.

If Bitcoin is KYC, DeFi coins have no hope of replacing the traditional banking system and CBDCs are everywhere, why use Bitcoin at all?

Why linking or relating Bitcoin with DeFi? They are two different things, Bitcoin is a complete decentralized digital asset.

[teosanru]

Great article on Bitcoin.com that people should read. Crypto has the potential to usurp the banks, allow private, digital transactions, serve as a universal currency, escape from rampant fiat inflation, etc. People need to wake up, be more active in politics and be stronger advocates against KYC.

“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” -Satoshi Nakamoto
...
With this new U.S. infrastructure bill (now moved to the House of Representatives which is on recess until September 20), the EU’s plans to track all bitcoin transactions and ban anonymous wallets, the massive momentum CBDCs are gaining worldwide as countries responsible for 90% of the world’s GDP research and trial them — it is clear we are on the cusp of something unprecedented. Even the sacred realm of decentralized finance (defi) is no longer safe, with U.S. Securities and Exchange Commission Chairman Gary Gensler recently calling for more authority to regulate defi.

Contrary to Satoshi’s vision for peer-to-peer electronic cash without the need for a financial institution, the picture taking shape is one instead of complete, centralized, coercive control of private finance. Privacy and autonomy in money, in other words, are being made out as relics to be traded in for antiquated ideas of kings ruling peasants, disguised as modern and sensible “regulation.”

I think many retail investors in the US are Robinhooder types that have a "Bitcoin go up - me buy!" mentality. They don't realize what the loss of utility from anonymous P2P transactions will mean for Bitcoin.

If Bitcoin is KYC, DeFi coins have no hope of replacing the traditional banking system and CBDCs are everywhere, why use Bitcoin at all? Governments will likely ban it in the future anyway. China and the US infrastructure bill have already set a precedent for banning mining and development in those countries.

The plans of government have always been this, where the world is moving more and more towards tracking and data collection, there is no chance governments are giving you free hand in your financial transactions, this data relating to your incomes and expenses alone is so monetizable for your banks and credit card companies these days. But these things set apart, I think Bitcoin's utility trajectory isn't going to be as Parabolic as its price chart, that's for sure. The main reason is that the mindset of the retail investors, today the mindset regarding cryptocurrencies isn't like an alternate currency but more like a tool for investment, and trust me 90% of them will support this ban on anonymous transactions because then investment in these currencies would become even easier but how profitable that only time will tell, because reducing utility of bitcoin would make its price just a bubble.

[dothebeats]

True that bitcoin was intended to be a P2P electronic cash alternative, but as time went by people realized that bitcoin also works well as a store of value, hence why a lot of people cared about the price of bitcoin more than its status as an alternative way to pay whatever they purchased online. It is almost inevitable that bitcoin will get regulated one way or the other, though that per se, IMO, does not lessen or change bitcoin's purpose.

[mu_enrico]

What's the purpose of Bitcoin? There's no absolute answer to that question. Anyway, as much as I don't enjoy doing KYC, businesses must get customers' data for shipment and stuff. Anonymous transaction has drawbacks. Let's say you sell goods in the marketplace. You need more hassle to verify whether Alice or Bob did the payment (in Bitcoin you simply attach the link to blockchain explorer). And then Alice and Bob still cannot be anonymous because you need their address for shipment. Bitcoin is not anonymous, that's an old concept predates Silk Road, and other, now closed, anon businesses.

Yep, Bitcoin can replace the payment part of commercial banks with its P2P e-cash system, but I think we won't win the battle anytime soon.

[Haunebu]

How exactly is BTC losing its purpose? Do you even realise how much BTC and the crypto market has grown overall during the past couple of years? If anything, BTC is actually growing more and more relevant over time(Not the opposite).

Personally, I hate KYC myself and it's still possible to execute cryptocurrency transactions in different sites without providing our KYC documents and I don't think this will change at any point in the future.

[wxa7115]

True that bitcoin was intended to be a P2P electronic cash alternative, but as time went by people realized that bitcoin also works well as a store of value, hence why a lot of people cared about the price of bitcoin more than its status as an alternative way to pay whatever they purchased online. It is almost inevitable that bitcoin will get regulated one way or the other, though that per se, IMO, does not lessen or change bitcoin's purpose.

Being a store of value is also part of being money, it seems that fiat has been around for so long that people have forgotten that fact, so bitcoin is still fulfilling its purpose it is just that right now its usefulness as a store of value dominates it usefulness as a currency that you use in your everyday life.

Is this going to change? I think it will but for that to happen we will need for adoption to grow significantly and a deepening of the crisis of fiat currencies, and while both are underway it is going to take some time before this becomes the main use of bitcoin.

[BrianH]

If anyone against CBDC, the person is also againsting Fiat, Bitcoin is not DeFi, Bitcoin is also not a replacement but an alternative, Fiat is inflationary while Bitcoin is deflationary, appreciative and increase in value, while you can make use of it and have privacy, unlike Fiat or CBDC, but there are many reasons we may still need Fiat or CBDC which are legal tender. But Bitcoin as an asset, also as money and appreciate in value over time.

If Bitcoin is KYC, DeFi coins have no hope of replacing the traditional banking system and CBDCs are everywhere, why use Bitcoin at all?

Why linking or relating Bitcoin with DeFi? They are two different things, Bitcoin is a complete decentralized digital asset.

They are two different things. My intent was that DeFi coins would be an alternative to BTC or CBDC. Why use BTC (or DeFi) if CBDC replaces their function? Especially considering the likelihood that governments will completely ban BTC to prevent competition from CBDC.

[Charles-Tim]

Why use BTC (or DeFi) if CBDC replaces their function? Especially considering the likelihood that governments will completely ban BTC to prevent competition from CBDC.

I will be specific on Bitcoin. CBDCs are pegged with Fiat or manipulated like Fiat, which means they are inflationary, subjected to central control and the control always lead to devaluation, also any currency controlled by the government has no privacy, not a speculative asset, neither also a store of value. That is why Bitcoin is so different, it is an alternative, it is a speculative asset and also a store of value, it appreciate in value over long period of time, this has been the reason for the price valuation of bitcoin, because people know it is appreciative and buy more of it. The more the demand the higher the value and the more valuable it is and the higher the price.

[Myleschetty]

serve as a universal currency

Bitcoin was not created to serve as a universal currency, it was created as an alternative currency that will make people's financial freedom.

the EU’s plans to track all bitcoin transactions and ban anonymous wallets, the massive momentum CBDCs are gaining worldwide as countries responsible for 90% of the world’s GDP research and trial them — it is clear we are on the cusp of something unprecedented.

It is not possible for any government to track all Bitcoin transactions and ban every anonymous wallet, if they do a new alternative will always be introduced and I once read that the ETH dev is also planning to create a tumbling service.

If Bitcoin is KYC, DeFi coins have no hope of replacing the traditional banking system and CBDCs are everywhere, why use Bitcoin at all?

Ask yourself who's going to KYC Bitcoin when it is decentralized? They can only KYC/AML exchange and others payment sites. DeFi coins are the future of finance and they don't hype or hope before they can stay true to their mission.

[just_Alice]

Yes, unfortunately, “no KYC” isn’t happening anytime soon in China, they’re all about controlling their nation.

But I’d say that things are a little different in the US. I think it’s only fair to impose taxes on those who make a fortune from cryptocurrencies. People pay those on stocks investments, so why shouldn’t crypto investors pay as well? I think it would be a perfect compromise if other countries would agree to let people use, keep, exchange cryptocurrencies, but in return, people would pay the government. It’s a good trade considering the prize. Do no questions to the IRS. But the SEC seriously needs to calm down and let people have a little privacy!

[paxmao]

Great article on Bitcoin.com that people should read. Crypto has the potential to usurp the banks, allow private, digital transactions, serve as a universal currency, escape from rampant fiat inflation, etc. People need to wake up, be more active in politics and be stronger advocates against KYC.

You certainly can use bitcoin as it was intended originally, but only for transactions that make sense in relation to the level of fees. That is the only reason I see to argue that it has lost the original purpose of easy peer-to-peer transactions, which was better covered by BCH. You do not need to pass any short of KYC to use bitcoin, that is for sure. It may be easier to do so, since when you buy bitcoin with fiat you are not following the spirit of bitcoin in the first place, that is, you are not using it for its intended purpose but rather just buying.

[Zilon]

I think many retail investors in the US are Robinhooder types that have a "Bitcoin go up - me buy!" mentality. They don't realize what the loss of utility from anonymous P2P transactions will mean for Bitcoin.

If Bitcoin is KYC, DeFi coins have no hope of replacing the traditional banking system and CBDCs are everywhere, why use Bitcoin at all? Governments will likely ban it in the future anyway. China and the US infrastructure bill have already set a precedent for banning mining and development in those countries.

KYC is done by exchanges since the operate based on certain rules governing their existence and would not want any factor to hinder their operations knowing fully well if the violate government orders on KYC verifications it might cost them their license to operate. This doesn't stop Bitcoin from maintaining it's anonymous nature. CDDCs even with their increasing nature can't cause a treat on Bitcoin it's the blueprint upon which other digital currency exist.

[Hydrogen]

Great article on Bitcoin.com that people should read.

Bitcoin.com has always been controversial due to its ownership by Roger Ver and past history of questionable activity. There was a past legal case where people who tried to buy bitcoin on that site were sold bitcoin cash instead. Notions of bitcoin "usurping banks" are political in origin. As if people desiring basic protections from inflation and economic mismanagement through bitcoin, is somehow a direct attack on the banking industry. I'm not a fan of that messaging.

I think many retail investors in the US are Robinhooder types that have a "Bitcoin go up - me buy!" mentality. They don't realize what the loss of utility from anonymous P2P transactions will mean for Bitcoin.

Bitcoin has never been a truly anonymous P2P. Nor was it designed to be. There will be no loss of anonymous P2P as its not something that ever existed.

The concept of bitcoin supporting anonymous transactions was a media fabrication intended to fool people into thinking bitcoin was useful for money laundering purposes. Its not something that actually happened or existed in the real world.

[Dragonfund]

Sorry to say that, that dream is still far from reality. We must put some things into consideration before making conclusions on some things.
Have you forgotten that terrorism still exist? Do you want someone to kidnap your family and ask for crypto as random because they it's a means to get fund without been trace by the officers if the law, that will be a disaster to everyone if we ignore kyc.
You can choose not to do but others will be force to comy to rules and regulations.

[Kelvinid]

Do you mean OP that we are losing the purpose of being anonymous due to the KYC system implemented by some banks and exchanges?
Personally, we're still not but can't disclose any possibility of losing it in the future. As long as you can still make use of it and do the transfer without any KYC verification, you are still there. But the moment that you are using a third party and pass the KYC, you will no longer enjoy the anonymity that you've wanted.

Well, they have some purpose as well and I understand that. But of course, you can also understand that not all will stay forever, like losing our anonymity is an example. But still, I'm in trust with Bitcoin and also those who ask for my personal information, so it was not a big deal for me.

[rosebrand]

There are just too many reasons to why this recent rules are popping up thereby making it seem bitcoin isn't getting that anonymity it supposed to get, but the fact is nothing changed bitcoin hasn't lost it purpose, you can still send funds across country's without going to bank, and people have got to see more usefulness in bitcoin, not only just using it as means of transaction but also a good store of value and a successful form of investment.