Isn’t KYC anti-ethical to Bitcoin?

[btc78]

You can still trade BTC with anonymity, it all depends on what you prefer. There are so many exchanges around and most of them are centralized that require KYC. If you are ready to compromise on your privacy then you can join these centralized exchanges. But yes I do agree that most common source of BTC trading is through these exchanges.

I don't know if some known exchanges offer anonymity right now especially those who used to be decentralized are now has changed their point of view because the government force them to do so. However, there are few exchanges out there that still exist offer you their service without getting some KYC from you. They are those exchanges that give you a limit if you didn't pass any KYC to them but right now it seems to me like they also getting unto this kind of exchange and they too are now adopting the policy of making obliged the KYC of their users before they can use their service. just like what happened to Binance and other known exchanges that haven't been like that before.

The exchangers has no option but to follow , even if how they wanted to keep their users anonymous but if the government oblige them then they will tend to follow.
this is how the the market and the service act now, choose only the exchange you think will will favor your needs.
I use exchange now the ask KYC and  also use some that needs  no KYC for my own ways of trading.

[1714686591]

1714686591

[witcher_sense]

When i first heard about bitcoin, one of the selling points then was the pseudo anonymity. But as of recently, it is hard to purchase any crypto without encountering a form of KYC.

I’m just curious of everyone’s thought on this.

Indeed, it is no way ethical to demand identity information from those merely wanting to dispose of their own hard-earned money. It always makes you think that money sitting in your bank account is not actually yours, but somebody else's who has control over you. Money is a system of control, which means the admins of this system can do whatever they want because they command the core of the system. They decide who may enter, who may transact, with whom one may transact, what amount of money one may move, what fee one should pay to make a transaction, on what things one may spend money, etc. In short, you have to ask permission every time you wish to interact with money. Someone gave people completely non-governmental money of a permissionless decentralized nature. But people have gotten so used to the system of control that they continue to ask permission to interact with money.

[Sethrey]

I can't decide. Bitcoin itself isn't fully anonymous neither. So when you say if KYC is non-ethical to bitcoin, It don't have a clear answer. If you said monero instead of bitcoin then I would say "yes" without a doubt.

Noncustodial wallets, mixing or privacy coins. The important steps are how to broadcast your transactions. Wallet itself can not protect your privacy or anonymity.

[Guide] Decent mixing methods

Regardless of the project though, I don't like KYC in crypto. Crypto isn't something that needs a government support. It is not a bank. So KYC makes no sense.

Like or dislike, we will have to accept because more exchanges will be required to implement KYC by government command.

More, but not all of them. Check out Crypton exchange from Utopia p2p. At first it provided only inner coins: privacy coin Crypton and anonymous stablecoin U USD, but they added Monero recently https://crp.is/exchange/xmr_usdt And as it's a decentralized no KYC exchange, no one could force it to change any rules and no one can block it.

[MIner1448]

When i first heard about bitcoin, one of the selling points then was the pseudo anonymity. But as of recently, it is hard to purchase any crypto without encountering a form of KYC.

I’m just curious of everyone’s thought on this.

100% to the point said, KYC is already everywhere, it seems that soon we will buy altcoins through global identity checks. Therefore, the crypto community is more fond of decentralized exchanges, even from the point of view of their personal data, no one wants to provide them even when purchasing ordinary goods in "stone" shops for fiat money.

[Haunebu]

It is. BTC itself isn't 100% anonymous honestly speaking, but you can ramp up the anonymity factor through various methods. For example, P2P exchanges like LocalBitcoins don't require any form of KYC(Upto a certain limit).

It's still better to just comply instead with these exchanges terms instead of using non-popular exchanges where the chance of getting scammed or being treated unprofessionally has a high chance.

That depends. If you want complete anonymity, it is still possible to trade crypto without submitting KYC through exchanges like LocalBitcoins etc. If not, it's better to comply with centralised exchange requirements as you mentioned.

[LogitechMouse]

When i first heard about bitcoin, one of the selling points then was the pseudo anonymity. But as of recently, it is hard to purchase any crypto without encountering a form of KYC.

I’m just curious of everyone’s thought on this.

There are DEX'es that is under Ethereum which isn't require KYC to have access on it. Unfortunately Bitcoin doesn't have anything and we can't access it thru DEX'es as they aren't supporting it.

Anti-ethical or not, it doesn't matter anymore I think. What's important is people will have access to Bitcoin and other cryptos even if it costs their information. Lets just take Binance as an example. They are requiring KYC to their users so that they can use their exchange. People don't care about their personal information as long as they will have access into it. Either way, if you don't want to share your personal information then you still have a choice not to.

[blockman]

Yes.
It's all due to government restrictions and the exchanges are just following what the government mandates them. As mentioned, you will still be able to find some ways of doing it anonymously. But are people would care about what's being proud of by the early bitcoin folks about anonymity? What matters to these days especially to the new investors is bitcoin itself is an investment and that's it.

Right. Since they are centralized, so they are bound to follow the rules made by the government. For me, if its just for security reasons, then i think there's no problem about that. But knowing that we are giving our personal identities, then the essence of turning into bitcoin so we can be anonymous will already be lost. Or does it really matter nowadays? Maybe for early adopters here, yes it is, but for newcomers i doubt if they are still thinking or even affected by it. As long as we can gain crypto, well that's all that matters.

Well, that doesn't really matter a lot to the newbies. They're only thinking that it won't matter to them and it is completely fine to submit kyc to avoid the hassle.
That's why you'll just see everyone does to comply with the kyc since it's needed to trade and to upgrade some limits as well.

[BlackHatCoiner]

I don't think, I'm close-minded in my speech?

Sorry, I didn't formulate my sayings properly; your speech was as good as it should. What I meant is that people like knowing they're free of obligations. When they keep the keys they feel responsible.

It's also due to this blind hunt of profit you said:

It finally shows people are interested only in speculation and not really in the ideology behind Bitcoin.

It's about convenience, yes maybe, but it has a cost.

I think it's rather the protection they feel when they use a popular exchange. Sure it's the convenience too, but try convincing a get-rich-quicker and here-only-for-the-profits, hashtag to_the_moon guy to transact without this, significant for him, intermediary.

I don't know if I shall say they're lazy, don't take the time, or are not well informed but you can truly purchase BTC directly peer to peer.

Pure speculation, but for the overwhelming majority I suspect it's all three.

Honestly, people talk a lot about decentralization and privacy, but they're the first to use centralized platforms and give them their personal documents. (Isn't it funny?)

Funny or tragic?

[Luqman]

they always follow what the government told them.

True. Most centralized exchanges use KYC because it is one of the regulations made by the government. The government wants to ensure that there are no misuses of money through exchanges like money laundering or fraudulence. I think they don't do a bad thing here.

There are still some good exchanges who are not requiring KYC.

Do you mean popular DEX? Yes, those are trusted exchanges that have a good reputation.

But we can't deny the fact that maybe in the near future, we can no longer see exchanges who are not asking for KYC as most of the exchanges nowadays are becoming centralized.

I believe there will be always DEX, they won't ask for KYC. There are many people who prefer to trade in DEX. With good demand for DEX, it will survive well for a long time.

[Wind_FURY]

Yes, it absolutely is.

Look at what the whitepaper says about privacy:

The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone.

KYC prevents this entirely. You cannot keep your public keys (and by extension, your addresses and transactions) anonymous when a centralized exchange controls all your keys, knows exactly who you are, and hands that data over to massive blockchain analysis companies.

I believe it’s debatable. It’s the centralized exchange’s right to ask for identification for a person to use their service, and if you don’t want to give it, then you have the freedom to use another service. If this is the current system we have, we should have the tools to send our UTXOs somewhere to reset, and increase the anon-set. cAPSLOCK has a way.

[perfect999]

When i first heard about bitcoin, one of the selling points then was the pseudo anonymity. But as of recently, it is hard to purchase any crypto without encountering a form of KYC.

The truth is that a lot of people don’t even care about privacy these days. As long as it is easy for them, they’re just going to make use of that wallet or exchange. Someone have even asked me once why I’m worried about privacy, stating that the only people who has to worry about privacy are people who engage in illicit business. They’re forgetting that sometimes you also have to be careful and maintain your privacy online, not because you are doing anything bad, but because it is important to an extent.

Your identity can be stolen and used for whatever that you would least imagine. So that’s why it’s very good to maintain privacy. People who try to stay private are not doing so just because they’re doing something bad, some of them just need their Peace of Mind and nothing else.

[o_e_l_e_o]

It’s the centralized exchange’s right to ask for identification for a person to use their service, and if you don’t want to give it, then you have the freedom to use another service.

I don't disagree with that at all. If a private company wants to set ridiculously invasive rules and requirements, they are absolutely free to do so. And if an individual user wants to compromise all their privacy and security by complying with those ridiculous rules, then again they are absolutely free to do so. That doesn't mean it is a good idea, however, and it doesn't stop KYC from being antithetical to the whole point of bitcoin.

This is similar to using a third party payment processor to process your transactions or using a third party web wallet or exchange to hold your coins for you, as both are antithetical to bitcoin and defeat the entire point of not having intermediary third parties. Doesn't mean people won't do it, though.

[freedomgo]

It’s the centralized exchange’s right to ask for identification for a person to use their service, and if you don’t want to give it, then you have the freedom to use another service.

I don't disagree with that at all. If a private company wants to set ridiculously invasive rules and requirements, they are absolutely free to do so. And if an individual user wants to compromise all their privacy and security by complying with those ridiculous rules, then again they are absolutely free to do so. That doesn't mean it is a good idea, however, and it doesn't stop KYC from being antithetical to the whole point of bitcoin.

This is similar to using a third party payment processor to process your transactions or using a third party web wallet or exchange to hold your coins for you, as both are antithetical to bitcoin and defeat the entire point of not having intermediary third parties. Doesn't mean people won't do it, though.

Well, we all have the choices to make i guess and in the end, one is not force to comply with KYC if he thinks that is unethical. But honestly, time will come that all exchanges will be requiring KYC and by that time, we have no other choices to make if we insist on buying crypto from an exchange. Although its really beyond our privacy but to think that it's only for security reasons on our part, and safety on the exchanges part, i think its not really a bad idea i guess. We just have to be more cautious with that, and make sure that we are not giving our personal identities to those not reputable exchanges.

[NotATether]

It’s the centralized exchange’s right to ask for identification for a person to use their service, and if you don’t want to give it, then you have the freedom to use another service.

I don't disagree with that at all. If a private company wants to set ridiculously invasive rules and requirements, they are absolutely free to do so. And if an individual user wants to compromise all their privacy and security by complying with those ridiculous rules, then again they are absolutely free to do so. That doesn't mean it is a good idea, however, and it doesn't stop KYC from being antithetical to the whole point of bitcoin.

This is similar to using a third party payment processor to process your transactions or using a third party web wallet or exchange to hold your coins for you, as both are antithetical to bitcoin and defeat the entire point of not having intermediary third parties. Doesn't mean people won't do it, though.

I don't like it but it appears we're forced to live with it.

In a parallel universe where there were no KYC rules at all, money launderers would probably be transferring millions between crypto and fiat bank accounts and governments would probably introduce a total ban on bitcoin transactions (China has already done exactly that).

If the KYC procedure is something like the one created by Sum&Sub (https://sumsub.com/how-to-pass-verification/) and sold to third parties, then all that's needed is assurances that the third party is securely (and ephermally) storing the documents.

Of course, I do not trust when some unknown company is providing their own KYC verification service because there's no knowing how safely they store the information (and whether they ever delete it).

I also do not like the Coinbase kind of verification where they alert the authorities if the verification fails (and you have >$2000) because it can cause many false positives.

[o_e_l_e_o]

But honestly, time will come that all exchanges will be requiring KYC and by that time, we have no other choices to make if we insist on buying crypto from an exchange.

DEXs and peer to peer trading will only become more popular, not less.

Although its really beyond our privacy but to think that it's only for security reasons on our part, and safety on the exchanges part, i think its not really a bad idea i guess.

There is no security benefit to the individual from completing KYC; only risks.

We just have to be more cautious with that, and make sure that we are not giving our personal identities to those not reputable exchanges.

Every so called "reputable" exchange has still managed to leak customer KYC details through hacking, scamming, or selling.

I don't like it but it appears we're forced to live with it.

We're forced to live with it because no one puts up a fight. If everyone who used bitcoin flat out refused to complete KYC at any point, you can guarantee Coinbase and Binance would find a work around and start lobbying governments for change by tomorrow.

[goldkingcoiner]

When i first heard about bitcoin, one of the selling points then was the pseudo anonymity. But as of recently, it is hard to purchase any crypto without encountering a form of KYC.

I’m just curious of everyone’s thought on this.

Yes, KYC is the governments effort to control crypto for tax and regulation reasons. However I see this effort as an impossible goal achievement because the blockchain community is already far ahead in terms of decentralised finance and decentralised wallets. We already can trade anonymously and in a few years we will have other ways to trade in ways that the government cannot track. KYC is a fruitless attempt at control.

[Obito]

For me, I think that KYC isn't that bad at all, I mean not a lot of people care too much about bitcoin so I really don't see how it's going to be a problem plus with KYC, we can easily dispel the argument that bitcoin funds terrorist due to it's anonymity which isn't true since there's already a KYC.

[Wind_FURY]

It’s the centralized exchange’s right to ask for identification for a person to use their service, and if you don’t want to give it, then you have the freedom to use another service.

I don't disagree with that at all. If a private company wants to set ridiculously invasive rules and requirements, they are absolutely free to do so. And if an individual user wants to compromise all their privacy and security by complying with those ridiculous rules, then again they are absolutely free to do so. That doesn't mean it is a good idea, however, and it doesn't stop KYC from being antithetical to the whole point of bitcoin.

This is similar to using a third party payment processor to process your transactions or using a third party web wallet or exchange to hold your coins for you, as both are antithetical to bitcoin and defeat the entire point of not having intermediary third parties. Doesn't mean people won't do it, though.

I believe nothing is “anti-ethical” if if wasn’t forced on the user. It’s your choice to use an exchange, or a service under their terms, and if given no other choice, we have the tools to increase the anon-set. I believe Lightning will become one of these important tools.

[o_e_l_e_o]

I believe nothing is “anti-ethical” if if wasn’t forced on the user.

I'm not really sure what "anti-ethical" means in this context. I had assumed the OP meant to use the word antithetical.

Still, there are plenty of things which are antithetical to bitcoin which are not forced on the user. The very first line of the whitepaper states that bitcoin should be "purely peer-to-peer" and allow payments "to be sent directly from one party to another without going through a financial institution". Every third party payment processor such as BitPay is antithetical to that aim, since they stop users trading peer-to-peer and require all payments to go through a "financial institution", which in this case is the payment processor. The same can be said for any exchange which allows direct transactions between accounts on their platform. In the same way, completing KYC is antithetical to the aims laid out in the bitcoin whitepaper, as I explained above.

Now, I'm not saying that companies shouldn't be free to offer these services, and I'm not saying that users shouldn't be free to compromise their security and privacy in the name of convenience by using these companies if that is what they want to do, but you can't possibly argue that inserting an unnecessary "trusted" third party financial institution in to your transaction when you otherwise do not need one is in keeping with the philosophy behind bitcoin. (I put "trusted" in quotes because I don't trust a single one of these such companies.)

[Kakmakr]

Bitcoin adoption was difficult at first, so third party wallet providers and exchanges came onto the scene to supposedly help with that, but they killed all pseudo anonymity. So if you are serious about pseudo anonymity, you will have to go the extra mile to protect that. (Mixer Services)

Let's not forget that "Cash" has pseudo anonymity... so it is not something illegal. The problem is ... some people misuse the pseudo anonymity for criminal activities (as with cash) and that has given Bitcoin a bad reputation. (which is not fair at all, because the majority of people use it for legal purposes)