[Blacklist] of unreliable, 'taint proclaiming' Bitcoin services / exchanges

[n0nce]

Alright; that's a good point, however I still don't know why the entities pushing against this human right (politicians, lawmakers, ...) would treat 'Bitcoin with protocol level privacy' any different from 'Bitcoin with high-level privacy' (that comes from ChipMixer or other non-traceable origin). To them I don't think it matters why they can't trace it, just that they can't - and that's what they push back against. They couldn't care less in which layer we implement privacy, in my opinion.

You're probably right: they'll still try to get rid of Bitcoin, just like they're (slowly) trying to get rid of cash money.

There is no evidence that such blanket surveillance has prevented terrorist attacks or any of the other things that governments claim. Its goal is population control, not crime prevention. It is never justified and it should be resisted.

And history shows that the mere existence of a mass surveillance apparatus, regardless of how it is used, is in itself sufficient to stifle dissent. A citizenry that is aware of always being watched quickly becomes a compliant and fearful one.

I'd agree that resistance is the only solution. We're always looking for technical solutions, but honestly, it's a political / social problem and it requires a political / social solution.
If anyone defines untraceable cryptocurrencies as illegal, it doesn't matter if you added the untraceability through a mixer ('high level') or protocol level like Monero. They'll treat them equally.

If we want to solve these issues, we need education and conviction of millions of people who don't want mass surveillance and cause pressure on politics. If everyone just complies, authorities will keep doing their thing.

Privacy changes on the protocol level could help, but I have no idea how likely that is to be implemented.

Privacy protocol changes would probably be best thing for some people or nightmare for others, but it's hard to imagine that happening right now.
I think mimblewimble has some chances to be implemented in BTC like it was for LTC, but this is only optional and most people probably wouldn't even use it like that.
Maybe we could see some better second layer solutions for privacy, or some wallets that couldn't be stopped by regulators.

Again, I don't know why the ones banning ChipMixer UTXOs would suddenly accept MimbleWimble. Or protocol-level anonymous Bitcoin.
I'm not sure you can find a technical solution to a political problem.

To be clear: privacy is possible today, with mixing, CoinJoin and Lightning. Maybe in the future with MimbleWimble and protocol-level changes. But there are parties that don't want such anonymous funds, funds that aren't tied to a real-life identity or funds that in the past have passed a casino. I don't see them suddenly accepting anonymous funds that have essentially just been anonymized in a novel technical way.
Just because the reason they don't accept it isn't that they don't like mixers specifically, it's that they don't like anonymity.

We can already and always will be able to use Bitcoin anonymously peer-to-peer; with or without any changes.
It's just that certain organizations don't treat all Bitcoin equal and I feel with enough pressure from end users (e.g. by educating) - as early as possible - they might actually be forced to change their terms wherever they're already just voluntary (e.g. Wasabi). And wherever terms are legally limited, with the huge amounts of funds they have, exchanges could do lobby work to be able to meet the users' demands (for privacy).


Let me just frame this real quick

This can go super crazy, especially with those carbon credits they are rolling out soon, this could soon become a living nightmare if we continue using centralized exchanges.

Again, this is the real solution here. If the whole community stopped buying in to this taint nonsense and stopped using exchanges which enforce this nonsense, then the whole concept would disappear very quickly.

[NotATether]

Incentivizing users with some free money, decreased trading fees, and in the future maybe giving them an NFT (with promises that it's going to be worth a lot soon) will still be enough for most to forget about all the negatives.

And we have now hit the nail on the problem.

The masses only follow the person with the carrot-stick, because that's all they care about.

And the carrot-stick guy is the exchanges, and we ain't got nothing to incentivise these people not to use those exchanges.

It takes other (good) exchanges to destroy the rotten ones.

[Pmalek]

And the carrot-stick guy is the exchanges, and we ain't got nothing to incentivise these people not to use those exchanges.

It takes other (good) exchanges to destroy the rotten ones.

The new (good) ones have to be better than those they are trying to replace. In every sense of the world. If it's a combination of good and bad, most people will just continue using the sites they are comfortable with. Unfortunately, it mostly boils down to how much money/crypto will eventually end up in someone's pocket or wallet. You are not going to get to most people telling them how decentralized exchanges are better and explaining the reasons why that is, when all they see is that the centralized one gives them $50.000/coin, while the best offer on the decentralized one is only $49.200.   

Then there is the issue with marketing. Have you ever seen an ad or commercial for Bisq? Me neither. But if you watch sports, you can see centralized exchanges in the biggest sports competitions nowadays. Money buys new customers.

[n0nce]

Unfortunately, it mostly boils down to how much money/crypto will eventually end up in someone's pocket or wallet.

Honestly, if throughout multiple years of using centralized exchanges, only once you get an account frozen or closed, once you get coins blacklisted, once your exchange exit scams you, or even if you want to withdraw your funds when you buy Bitcoin - a decentralized exchange will actually be cheaper.

In another thread people reported some exchanges' withdrawal fees for Bitcoin are around the $20 mark; if that's not 'getting less money in your pocket / wallet', I don't know what is.

[dkbit98]

And the carrot-stick guy is the exchanges, and we ain't got nothing to incentivise these people not to use those exchanges.

There is really no incentive to use use centralized exchanges.
Yes, it's probably easier to use them and there is much bigger volume that is probably automated or fake.
You can't get better incentive than knowing your coins are not sent to some third party man who will track your every step and scan your every move and transaction.

Honestly, if throughout multiple years of using centralized exchanges, only once you get an account frozen or closed, once you get coins blacklisted, once your exchange exit scams you, or even if you want to withdraw your funds when you buy Bitcoin - a decentralized exchange will actually be cheaper.

We don't know how the future of decentralized exchanges will look like, but it's totally possible to create some revenue sharing that would create profit for everyone who participate in that dex.
Using something like Lightning or other second layer solution, with improved privacy would be big advantage for me, and you don't have to worry about angry employee stealing your data because he got sacked from with work.

[n0nce]

And the carrot-stick guy is the exchanges, and we ain't got nothing to incentivise these people not to use those exchanges.

There is really no incentive to use use centralized exchanges.
Yes, it's probably easier to use them and there is much bigger volume that is probably automated or fake.
You can't get better incentive than knowing your coins are not sent to some third party man who will track your every step and scan your every move and transaction.

I've got another incentive! Money

If you think about it, buying $100 on such an exchange with 0.0007BTC withdrawal fee (~$15 US) at current market price of $22,485.53 and withdrawing, paying 0.0007BTC in fees means instead of 0.00444730BTC, you get 0.00374730 in your wallet, effectively having paid an outrageous price of $26,685.88 / BTC. That's a markup of 18.5%.

Paying an almost 20% premium for having the convenience of buying BTC on an app instead of downloading and installing Bisq, is not something I'm willing to do to be honest.

Honestly, if throughout multiple years of using centralized exchanges, only once you get an account frozen or closed, once you get coins blacklisted, once your exchange exit scams you, or even if you want to withdraw your funds when you buy Bitcoin - a decentralized exchange will actually be cheaper.

We don't know how the future of decentralized exchanges will look like, but it's totally possible to create some revenue sharing that would create profit for everyone who participate in that dex.
Using something like Lightning or other second layer solution, with improved privacy would be big advantage for me, and you don't have to worry about angry employee stealing your data because he got sacked from with work.

What do you mean with revenue sharing? Something like staking / lending features?
Right now, in the case of Bisq the profit you get for 'participating' is that your order stays online. There's no need and no use for you to keep the application running if you don't try to buy / sell which I think is the simplest and most secure way to do things. Sure, you could incentivize users to run their Bisq nodes to 'host' other people's offers and such, so that it's not mandatory to keep the application running to buy or sell. But I don't think it's a good idea; it would make things unnecessarily complicated and introduce many more failure points.

Integrating Lightning is definitely going to be a big step for Bisq (or other decentralized exchanges), as it will allow to DCA more easily and also to quickly get small amounts of fiat when you need it, without requiring to pay relatively high on-chain fees (since it's multisig and there are Bisq fees and whatnot).

I'd definitely agree that having the peace of mind that there's not a company behind the scenes that can mess things up is a big bonus.

[BlackHatCoiner]

There is really no incentive to use use centralized exchanges.

There's one case, though, in which I justify the use of centralized exchanges: If you're sending (or receiving) a lot of money via a bank account or another financial institution and there is no legal framework for cryptocurrencies in your country.

This is some trouble, because not only do you have to somehow justify the transaction to the bank, but you also have to be aware of some special-arbitrary treatment from the tax office. Using a centralized exchange is probably going to pull you through the former, but I'm not so sure about the latter. Exchanging with Bisq in this case might not be a wise move.

[n0nce]

There is really no incentive to use use centralized exchanges.

There's one case, though, in which I justify the use of centralized exchanges: If you're sending (or receiving) a lot of money via a bank account or another financial institution and there is no legal framework for cryptocurrencies in your country.

This is some trouble, because not only do you have to somehow justify the transaction to the bank, but you also have to be aware of some special-arbitrary treatment from the tax office. Using a centralized exchange is probably going to pull you through the former, but I'm not so sure about the latter. Exchanging with Bisq in this case might not be a wise move.

You're saying if I sell 1BTC on Bisq and I suddenly get $20,000 via bank transfer, which on other days doesn't happen too often, the bank is going to ask questions? I mean, you could just reply to those questions honestly and say you bought BTC at a certain earlier point in time and sold it online. I don't think it would be a big issue; it's going to be similar to buying (or selling) another expensive item like a car.

Maybe the only catch would be that - in your words - 'there is no legal framework for cryptocurrencies in your country'. I'm honestly not sure what happens if there is no 'category' for cryptocurrency at all, but I believe most countries do have something by now; so of course make sure that you're legally allowed to own a large sum of BTC without telling anyone, if you want to keep it 'hidden', prior to selling it.
If you're in a country that has property tax (I believe such as LoyceV), and plan to sell it for fiat in the future, make sure to tell them yearly how much BTC you own (denominated in fiat) and you can hold it anonymously (no need to hand public keys or anything like that) without problems. Then, when the day comes that you're selling it all on Bisq, there shouldn't be any issues. Since they can go back and see that you always declared ownership of them and paid your taxes on them.

In general I don't think using a centralized exchange to do something illegal in your country, is going to make it legal. If you follow your laws in the first place, you can pretty surely sell P2P without worries. If you didn't follow some law, which later makes it hard to sell your crypto, it will be just as hard if you use a centralized exchange.

[BlackHatCoiner]

You're saying if I sell 1BTC on Bisq and I suddenly get $20,000 via bank transfer, which on other days doesn't happen too often, the bank is going to ask questions? I mean, you could just reply to those questions honestly and say you bought BTC at a certain earlier point in time and sold it online.

Not so simple if the money come from a complete stranger. But, if they come from a well-known, billion dollar worth of company, "the bell might not ring". Again, though, I'm not so sure what to do with the tax office.

I don't think it would be a big issue; it's going to be similar to buying (or selling) another expensive item like a car.

It isn't, because, first of all I can't evade the taxation of a mobile (in contrast with bitcoin), and second, there's normally a legal framework around that and I know what I should do, how much it'll cost me in the end etc.

but I believe most countries do have something by now

Unfortunately, not.

In general I don't think using a centralized exchange to do something illegal in your country, is going to make it legal.

Me neither, but I have a feeling that people who use a centralized exchange cover up this issue. Maybe I need to reach an accountant.

[LoyceV]

You're saying if I sell 1BTC on Bisq and I suddenly get $20,000 via bank transfer, which on other days doesn't happen too often, the bank is going to ask questions?

Yep. It may vary per country, but I'd expect a letter asking many questions (just shy of the color of my underware).

I mean, you could just reply to those questions honestly and say you bought BTC at a certain earlier point in time and sold it online. I don't think it would be a big issue

They'll also ask for a copy of your taxes, including your savings at other banks. Privacy? Lol. If you don't like it, they'll close your account.

it's going to be similar to buying (or selling) another expensive item like a car.

Not really: the car is traceable in your name.

If you're in a country that has property tax (I believe such as LoyceV), and plan to sell it for fiat in the future, make sure to tell them yearly how much BTC you own (denominated in fiat) and you can hold it anonymously (no need to hand public keys or anything like that) without problems.

I think the proper term in English is a wealth tax, but indeed, filing it and paying your annual taxes avoids jail time if you ever buy a jet or something.

Then, when the day comes that you're selling it all on Bisq, there shouldn't be any issues. Since they can go back and see that you always declared ownership of them and paid your taxes on them.

You'll be fine, as long as you answer all privacy invading questions your bank asks.

In general I don't think using a centralized exchange to do something illegal in your country, is going to make it legal. If you follow your laws in the first place, you can pretty surely sell P2P without worries.

From what I've seen, using an established exchange makes the bank "easier" because they know at least the other party isn't a criminal. Now let's say you sell 1 BTC and receive $20,000 tainted dollars P2P. Then what?

[n0nce]

You're saying if I sell 1BTC on Bisq and I suddenly get $20,000 via bank transfer, which on other days doesn't happen too often, the bank is going to ask questions?

Yep. It may vary per country, but I'd expect a letter asking many questions (just shy of the color of my underware).

I mean, you could just reply to those questions honestly and say you bought BTC at a certain earlier point in time and sold it online. I don't think it would be a big issue

They'll also ask for a copy of your taxes, including your savings at other banks. Privacy? Lol. If you don't like it, they'll close your account.

it's going to be similar to buying (or selling) another expensive item like a car.

Not really: the car is traceable in your name.

Then, when the day comes that you're selling it all on Bisq, there shouldn't be any issues. Since they can go back and see that you always declared ownership of them and paid your taxes on them.

You'll be fine, as long as you answer all privacy invading questions your bank asks.

Okay; so because I didn't buy via KYC exchange in the first place (therefore 'not traceable in my name'), they'll ask more questions compared to another sale and may / may not steal my fiat money?
Then I guess a P2P (cash in hand) trade of those BTC might be possible or otherwise a direct sale for BTC. In that case you will be sure not to get anything stolen from you and as long as your tax documents are fine, there won't be issues on that front either.

In general I don't think using a centralized exchange to do something illegal in your country, is going to make it legal. If you follow your laws in the first place, you can pretty surely sell P2P without worries.

From what I've seen, using an established exchange makes the bank "easier" because they know at least the other party isn't a criminal. Now let's say you sell 1 BTC and receive $20,000 tainted dollars P2P. Then what?

That's because the bank has liabilities / duties to the country it operates in and a registered exchange (company) is an easy / no headache source of funds for them, right?

[LoyceV]

Okay; so because I didn't buy via KYC exchange in the first place (therefore 'not traceable in my name'), they'll ask more questions compared to another sale and may / may not steal my fiat money?

One of the things they check is indeed if you sent money to a centralized exchange In the past.

Then I guess a P2P (cash in hand) trade of those BTC might be possible or otherwise a direct sale for BTC. In that case you will be sure not to get anything stolen from you and as long as your tax documents are fine, there won't be issues on that front either.

Unless you decide you want to deposit the cash (in a large amount) to your bank again.

That's because the bank has liabilities / duties to the country it operates in and a registered exchange (company) is an easy / no headache source of funds for them, right?

The banks just tries to cover their asses, especially after the huge fines they've had recently for not doing enough against money laundering. Even though, as far as I know, those fines were based on fiat money laundering.

[n0nce]

That's because the bank has liabilities / duties to the country it operates in and a registered exchange (company) is an easy / no headache source of funds for them, right?

The banks just tries to cover their asses, especially after the huge fines they've had recently for not doing enough against money laundering. Even though, as far as I know, those fines were based on fiat money laundering.

That was my impression, too. So it means if politicians one day find out that criminals use centralized exchanges as well, cashing out via centralized exchange won't be any better than P2P or decentralized, right?

It seems to me like you need some sort of 'government-approved party' in your crypto-to-fiat-path to prevent issues with larger amounts. What if new exchanges are going to be based in a crypto-friendly country like Portugal or El Salvador; such an exchange could probably get away with accepting all UTXOs, without blacklisting, while at the same time being 'governmentally-approved' so that banks won't need to thoroughly question source of funds when cashing out.

[LoyceV]

So it means if politicians one day find out that criminals use centralized exchanges as well, cashing out via centralized exchange won't be any better than P2P or decentralized, right?

I don't think it matters. They know banks are used by criminals, but banks consider money from other banks clean.

It seems to me like you need some sort of 'government-approved party' in your crypto-to-fiat-path to prevent issues with larger amounts. What if new exchanges are going to be based in a crypto-friendly country like Portugal or El Salvador; such an exchange could probably get away with accepting all UTXOs, without blacklisting, while at the same time being 'governmentally-approved' so that banks won't need to thoroughly question source of funds when cashing out.

Something tells me receiving a bank transfer from El Salvador (which has one of the highest crime rates in Latin America) will be a big red flag.

Portugal won't help much, it's part of EU and thus has to follow EU legislation.

[n0nce]

So it means if politicians one day find out that criminals use centralized exchanges as well, cashing out via centralized exchange won't be any better than P2P or decentralized, right?

I don't think it matters. They know banks are used by criminals, but banks consider money from other banks clean.

That won't ever change either, as long as the top-tier politicians use banks themselves for their shady businesses, right?

It seems to me like you need some sort of 'government-approved party' in your crypto-to-fiat-path to prevent issues with larger amounts. What if new exchanges are going to be based in a crypto-friendly country like Portugal or El Salvador; such an exchange could probably get away with accepting all UTXOs, without blacklisting, while at the same time being 'governmentally-approved' so that banks won't need to thoroughly question source of funds when cashing out.

Something tells me receiving a bank transfer from El Salvador (which has one of the highest crime rates in Latin America) will be a big red flag.

Portugal won't help much, it's part of EU and thus has to follow EU legislation.

I'm pretty sure that EU legislation is more lax than most countries' individual laws; as we've seen with the house sale in Portugal and no VAT or other taxes on crypto. This is now all a tangent on its own in this topic, so to get back on it; I don't think EU legislation calls for blacklisting of UTXOs. And therefore countries who want to be more crypto-friendly could explicitly position themselves in favor of fungibility and against 'taint'. In my opinion though, most people don't even realize that this taint and blacklisting is happening or ignore it; there must be demand / public interest for 'taint denying' Bitcoin services / exchanges / countries; then they will in one way or another emerge.

[o_e_l_e_o]

That won't ever change either, as long as the top-tier politicians use banks themselves for their shady businesses, right?

Not just that, but the banks keep these politicians in power by generous donations and funding their campaigns, as well as constantly funding them after they have been elected with gifts, grants, and other lobbying.

Have a look at: https://www.opensecrets.org/industries/indus.php?ind=F03

This shows you the breakdown of funding by commercial banks in 2021-2022 in the US. Feel free to choose a different financial sector or election cycle from the menu on the right. Make sure to check out both the total campaign donations as well as the total lobbying spending.

As long as our politicians are so heavily funded by banks, then the banks will continue to be allowed to launder money and other illegal activities. They may occasionally get hit with some inconsequential fine of a few million dollars to keep up the façade, but nothing that actually affects their bottom line.

[n0nce]

That won't ever change either, as long as the top-tier politicians use banks themselves for their shady businesses, right?

Not just that, but the banks keep these politicians in power by generous donations and funding their campaigns, as well as constantly funding them after they have been elected with gifts, grants, and other lobbying.

Have a look at: https://www.opensecrets.org/industries/indus.php?ind=F03

This shows you the breakdown of funding by commercial banks in 2021-2022 in the US. Feel free to choose a different financial sector or election cycle from the menu on the right. Make sure to check out both the total campaign donations as well as the total lobbying spending.

As long as our politicians are so heavily funded by banks, then the banks will continue to be allowed to launder money and other illegal activities. They may occasionally get hit with some inconsequential fine of a few million dollars to keep up the façade, but nothing that actually affects their bottom line.

I guess then things will only substantially change when Bitcoiners will start bribing donating and funding politicians.

[dkbit98]

You're saying if I sell 1BTC on Bisq and I suddenly get $20,000 via bank transfer, which on other days doesn't happen too often, the bank is going to ask questions? I mean, you could just reply to those questions honestly and say you bought BTC at a certain earlier point in time and sold it online. I don't think it would be a big issue; it's going to be similar to buying (or selling) another expensive item like a car.

I would always choose payment in cash for trading like this, this option is also available in Bisq face-to-face, or accept several smaller payments in your bank accounts, in different time periods.
It's a good idea to some choose crowded public place for this trade, and not some dark corner of the night.
You can buy a car and most things, unless it's lamborgini or something super expensive that would attract lot of attention.

I don't think it matters. They know banks are used by criminals, but banks consider money from other banks clean.

Isn't this banking system weird all together?
There is no magical formula that turns money from dirty to clean, it's just numbers on screen and they all have history to show if you go back enough.
It's just some dudes with seating in chair central control station saying what is clean and what is not.
Oh and they also control offshore banks, when they need them 

[n0nce]

You're saying if I sell 1BTC on Bisq and I suddenly get $20,000 via bank transfer, which on other days doesn't happen too often, the bank is going to ask questions? I mean, you could just reply to those questions honestly and say you bought BTC at a certain earlier point in time and sold it online. I don't think it would be a big issue; it's going to be similar to buying (or selling) another expensive item like a car.

I would always choose payment in cash for trading like this, this option is also available in Bisq face-to-face, or accept several smaller payments in your bank accounts, in different time periods.
It's a good idea to some choose crowded public place for this trade, and not some dark corner of the night.
You can buy a car and most things, unless it's lamborgini or something super expensive that would attract lot of attention.

That's not always possible. For one, what are you going to do with that huge pile of cash afterwards? Buying something else with cash (like, another car at a dealership) will require proving source of funds. I mentioned in the past on this forum, that trying to buy a car over 10,000€ with cash required proving source of funds.
Further, are you willing to accept 1BTC worth of cash without checking it? A bank is usually a good way to check the money is good; either meet with the buyer at their bank and have them withdraw the money in front of you (that would work) or you go to your bank and try depositing it. But that won't work if you want to skip the bank altogether.

I don't think it matters. They know banks are used by criminals, but banks consider money from other banks clean.

Isn't this banking system weird all together?
There is no magical formula that turns money from dirty to clean, it's just numbers on screen and they all have history to show if you go back enough.
It's just some dudes with seating in chair central control station saying what is clean and what is not.
Oh and they also control offshore banks, when they need them 

It's absurd, for sure. Just the fact that they get bailed out if they make bad business decisions, using taxpayer money, while every other business doesn't. Or the fact that they just buy politicians and nobody turns an eye; while it's essentially simply bribing. Or, as you say; that they define 'taint' without having an easily linkable history of funds like the Bitcoin blockchain does. What's also absurd is that I can't talk to a representative if it's weekend, if it's too early or too late, if it's a national holiday and probably many more cases; which means it's disfunctional 50% of the time. It's just a bad system. (rant over)

[LoyceV]

Isn't this banking system weird all together?

It's absurd, for sure.

No arguing there. It's probably the weirdest business we have. Then again, "money" is weird too. To quote Henry Ford:

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

I believe this is still true. Why work all your life for a tiny amount of money, while central banks create a million times more money than you earn in a lifetime in a millisecond?

This, by the way, is why I'm in Bitcoin. Central banks can't create more. And I believe they truely fear that.