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Author Topic: Will blockchain survive the crackdown on mixers and anonymization?  (Read 686 times)
legiteum (OP)
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May 24, 2024, 07:18:01 PM
 #101


You're quite similar to Ethereum, especially considering Ethereum's centralized nature.  There have been instances of frozen accounts in the past, and now it operates on a Proof-of-Stake system, which is inherently centralized.  

The government doesn't require Ethereum developers to enforce KYC because it's not practically feasible, and also because there's a level of decentralization preventing such actions.  However, in your situation, it's entirely feasible to implement KYC measures.  I think you even fall under the category of a money transmitting business according to the current laws.  


Um, I guarantee Ethereum has far more programmers than Haypenny does Smiley. They could require KYC much easier than Haypenny could. And Ethereum could do whatever it wanted with Ether. Our servers are "decentralized" too in multiple geographical locations, but that's just a technical detail that doesn't matter. Ether is in the exact same boat.

Haypenny does not gather any personal information of any kind, not even an email address, for transactions themselves. The model doesn't allow that, which is why it is so easy to use (much easier than a crypto wallet in fact).

Quote
Because I don't love criminals? Seriously?

No.  It's because you fail to acknowledge that the real criminals are the ones sitting in government offices, dressed in fine suits, making decisions that can affect the entire economy.

You're probably leaning towards a statist viewpoint, that's why you don't understand it.  

So anybody who is against criminals robbing children's hospitals is a "statist". Maybe go back and read your Ayn Rand some more because she made it clear that's not what it means Smiley.

If you think you can live your life without the protection of the police, then more power to you, but you don't get to call anybody when somebody parks their car on your lawn Smiley.




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May 25, 2024, 01:43:39 AM
 #102

Bitcoin (itself) doesn't require KYC either. Neither does any crypto or digital currency. They are only going after mixers and things like Monera. Why? Because with Bitcoin they have everything they need to track transactions.

It would be just as easy for the US to effectively shut down Bitcoin by making it illegal, which would drop the price of Bitcoin by about 99%. And the US could absolutely take over the hashrate of Bitcoin if it wanted to as well, as could any major world government.

We are in the same boat as any other digital currency, decentralized cryptos, centralized cryptos, and centralized digital currencies.

It's as straightforward as that.  Smiley

We're talking about theory here, since there's no evidence "the government" is planning on shutting anybody down. Bitcoin just got it's ETF approved for chrissakes Smiley. If anything, governments are going in the opposite direction.

There's no such thing as "shutting down" Bitcoin. Especially with how distributed and decentralized it is. The US government might prevent Americans from purchasing or selling Bitcoin. But that won't stop the core Blockchain network from running. People will just find a way around the government-imposed restrictions (either through a DEX, a P2P exchange, or meeting F2F).

The mixers' drama is just an attempt to scare away people from obfuscating their BTC transaction info. Governments will be able to shut down centralized mixers with ease, but not decentralized/non-custodial ones. Take a look at Tornado.Cash mixer. It was sanctioned by the US government, but the smart contract is still running on the ETH blockchain. Tech-savvy people can run their own instance of the mixer (frontend) to use it if they wish. The code is open source, after all. So no matter how hard governments try, they will never be able to take down the revolution. Either they join it or get left behind in the dust. Smiley

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legiteum (OP)
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May 25, 2024, 02:14:10 AM
 #103


There's no such thing as "shutting down" Bitcoin. Especially with how distributed and decentralized it is.


Well, as we've discussed on another thread at length, it's absolutely possible for the US, China or some other major country to take over 51% of the hashrate and thus control the network, thereby controlling Bitcoin. There's no evidence any country wants to do this, but they absolutely could.


Quote
The US government might prevent Americans from purchasing or selling Bitcoin. But that won't stop the core Blockchain network from running. People will just find a way around the government-imposed restrictions (either through a DEX, a P2P exchange, or meeting F2F).


If the US did that, something much worse would happen: the price of Bitcoin would plummet by 99% or more Smiley.

Quote
The mixers' drama is just an attempt to scare away people from obfuscating their BTC transaction info. Governments will be able to shut down centralized mixers with ease, but not decentralized/non-custodial ones.

Like money laundering in general, governments will never be able to shut it down completely, but they can certainly make it something only serious criminals would want to do. Few would risk federal prison just as a hobby.

Almost all holders of Bitcoin do so in a centralized way with a broker or an app that does KYC. Most average consumers don't want go to all of this trouble just to evade the government, they just want a safe investment that gives them a profit.


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May 31, 2024, 06:11:02 PM
 #104

Like money laundering in general, governments will never be able to shut it down completely, but they can certainly make it something only serious criminals would want to do. Few would risk federal prison just as a hobby.

Almost all holders of Bitcoin do so in a centralized way with a broker or an app that does KYC. Most average consumers don't want go to all of this trouble just to evade the government, they just want a safe investment that gives them a profit.

Exactly. No one wants to get in trouble with the government. People won't mind giving their away their privacy as long as they're able to invest into BTC and make money in the long run. For true believers of the revolution, it's going to be hard (if not difficult) to obtain privacy without raising suspicion from the government. With recent crackdowns from the US, don't expect developers to continue working on privacy solutions (mixers, anonymization techniques, etc) anytime soon. Those who do, are at risk of getting caught by the government (like the ones working on Monero). Totally not worth it, imo.

At least we know crypto/Blockchain tech won't disappear that easily. The industry will experience tighter regulations in the future. That's for sure. As long as decentralization wins, nothing else matters. Cheesy

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June 07, 2024, 01:34:16 PM
 #105

It would appear, based on the news this week, that major world governments like the US and others are cracking down on the notion of "government-proof privacy", and prosecuting companies and individuals who facilitate money transfer that cannot be potentially traced by a government. They are going after mixers and brokers who do not adequately engage in KYC.

In short, it would seem that governments are trying eliminate the very thing that Bitcoin--and blockchain generally--was originally designed to accomplish.

What does this mean for the long term prospects for cryptocurrencies? Will blockchain survive losing it's original purpose?

My own answer is: "yes", in the short term, and "maybe" for the longer term.

I have written before about different kinds of "privacy" that people might want, and most want privacy from other citizens, from companies, and from criminals: privacy from a targeted investigation from the government is a level that, in my estimation, a "nice to have" for most people, but not a dealbreaker.

Hence in the short term, cryptos missing their original purpose is not something most consumers care about. Most holders of Bitcoin these days do so in a centralized way, e.g. with an app or a broker that keeps their account under their name, in a centralized database.

As for the longer term, this brings up an important question: why use blockchain at all?

Blockchain is slow and expensive to transact in on purpose because of proof-of-work and decentralization. No cryptocurrency will ever come even close to scaling to the billions of transactions each day by people worldwide.

But a digital currency that is not blockchain-based can accomplish this and provide the same mechanism for speculation and value store that blockchain-based currencies provide. In my opinion, the long-term future of the actual blockchain architecture behind today's cryptocurrencies is... unclear.


My Answer yes! Blockchain will continue to survive crackdown.

the survival of blockchain technology does not necessarily depend on adhering strictly to its original purpose, but rather on its ability to adapt, innovate, and provide value in various sectors. As long as blockchain continues to evolve, address real-world challenges, and demonstrate its value proposition, it is likely to remain relevant and continue to thrive in the digital economy.
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