How did AML kill the decentralized market of Bitcoin?

[retreat]

Can we still enjoy the decentralized nature of bitcoin?

We can. If someone wants to make transactions more freely, they can use a decentralized exchange, there are several decentralized exchange websites that they can use bisq.network, or similar platforms, with the help of these platforms they can buy/sell Bitcoin without the need for KYC. And moreover, until now Bitcoin is still decentralized and it is still relevant to the idea when it was originally developed. Although now more people treat Bitcoin as an investment asset and more large institutions are involved in it, but Bitcoin is still widely used for transactions globally and no single entity/government can regulate the Bitcoin network - it shows that how the decentralized nature of Bitcoin is still relevant and exists today.

[Z-tight]

it’s not about the network but more about the market. Check out some of the posts above..sorry for any confusion!

All right, i get your point now. It is true that there are more centralized firms and services in the industry than there are decentralized ones, and the government continues to attack the industry with regulations and anti-privacy policies. However, there are still ways we can use BTC privately without giving our data to centralized third party services, the thing is most people in the industry don't care about their privacy, so they choose the 'convenience' of centralized services.

[hypersonic1]

As we all know, Bitcoin is decentralized, and in its early days, we were proud of that fact--believing no government could control it and even thinking it might replace fiat. Those were the days when we were highly optimistic about Bitcoin’s future.

However, with the current AML (Anti-Money Laundering) policies in place, it seems like Bitcoin’s decentralization is being challenged by regulations, especially with the introduction of KYC (Know Your Customer) requirements.

Here's a brief definition of AML and money laundering for context.

Money laundering is a type of financial crime. It involves taking criminally obtained proceeds (dirty money) and disguising their origins so they’ll appear to be from a legitimate source. Anti-money laundering (AML) refers to the activities financial institutions perform to achieve compliance with legal requirements to actively monitor for and report suspicious activities.

https://www.sas.com/en_ph/insights/fraud/anti-money-laundering.html

Can we still enjoy the decentralized nature of bitcoin?

You bring up a good point. There are ways to solve this however. Projects like Samurai wallet(currently shut down atm) are ways to keep decentralized nature of Bitcoin alive. Check out Ashigaru wallet https://ashigaru.rs/ (This wallet was released by anonymous developers and is less than 10 days old as of this post. be careful and aware of risks. However it is non custodial fork of samurai.) AML policy makers are trying to "color" bitcoin to see if is used properly or possibly from or for nefarious purposes. As far as the base layer, that will always be decentralized.

[lionheart78]

As we all know, Bitcoin is decentralized, and in its early days, we were proud of that fact--believing no government could control it and even thinking it might replace fiat. Those were the days when we were highly optimistic about Bitcoin’s future.

Bitcoin is still decentralized today.  It cannot be challenged as long as we use its blockchain for transaction and not undergoing centralized exchanges.

However, with the current AML (Anti-Money Laundering) policies in place, it seems like Bitcoin’s decentralization is being challenged by regulations, especially with the introduction of KYC (Know Your Customer) requirements.

Only centralized exchanges are affected by this.  The nature of Bitcoin decentralization cannot be hindered by the government as long as the transaction is within its network.

Can we still enjoy the decentralized nature of bitcoin?

Are we not still enjoying it?  Through P2P exchanges government has no say about the transaction.  Only on the centralized platform KYC can affect the transaction of Bitcoin.  So if we wanted to fully exercise decentralization, avoid centralized platforms, or suffer the extent of KYC procedures.

[DeathAngel]

Bitcoin still works exactly as intended but yes, AML & KYC laws have spoiled the party a little bit. You can always use a P2P marketplace. Some Bitcoin ATMs are anon or you have to leave a mobile number or something, could use a burner though. I guess you can’t have ultimate mass adoption without regulation though so it’s tough.

[Cookdata]

As we all know, Bitcoin is decentralized, and in its early days, we were proud of that fact--believing no government could control it and even thinking it might replace fiat. Those were the days when we were highly optimistic about Bitcoin’s future.

However, with the current AML (Anti-Money Laundering) policies in place, it seems like Bitcoin’s decentralization is being challenged by regulations, especially with the introduction of KYC (Know Your Customer) requirements.
Can we still enjoy the decentralized nature of bitcoin?

I think anti money laundering scheme has something to do with privacy of Bitcoin transaction and not really decentralization. When the government want everyone who do crypto transactions identified by their image and any other means of identification, that means the privacy payment of Bitcoin is already defeated, people can't hide transaction from the government because the moment you sent Bitcoin to kyc exchange, it becomes identifiable.

The decentralization has something to do with government been in control of Bitcoin in any form from the network down to its protocol. Right now, if you want to send Bitcoin through the Bitcoin network from your custodial wallet to another wallet address, no government can says otherwise and your transaction can't be flag by anyone, it doesn't have to pass through the government, this is what I think Bitcoin decentralization is about and not necessary the KYC aspect because that's a choice for people that want to use it.

[kryptqnick]

I agree that a lot of the market is now centralised, as people use major crypto exchanges, and those exchanges are custodial (plus usually have KYC procedures). But to me, it's a matter of having a choice. Many choose centralised services, perhaps because it's convenient and maybe because they feel like they can trust the companies providing those services. But there are non-custodial wallets, and there are ways of exchanging Bitcoin without going through KYC or through centralised platforms which store your funds. And I'm okay with people picking what feels right for them, as long as I can choose what I prefer, which is non-custodial wallets and local exchanges which don't store customers' funds.

[Nrcewker]

Can we still enjoy the decentralized nature of bitcoin?

Technically, it’s possible. You need to find sites or services that don’t ask for KYC and can spend the bitcoins there. Alternatively, if you want to trade Bitcoins, then you need to find exchanges that don’t ask for KYC. At last, if you want to convert your Bitcoins to fiat, then use P2P services and exchanges. So these are some possible ways to enjoy freedom through the decentralized nature of the coin. But soon as everywhere KYC is becoming mandatory, I am afraid that the decentralized nature will soon evaporate from everywhere.

[PrivacyG]

I guess you can’t have ultimate mass adoption without regulation though so it’s tough.

Regulations are one thing, but what they are doing is overkill.  By acting every time as if Bitcoin was the basis for drug dealing and Money Laundering it shows how fake the whole scenery is and that they are not setting up all these Regulations for preventing Crime but to monitor us.

[EFS]

AML policy changes very little things. Those who want to launder money can still do what they want with fiat money. They don't need crypto currency solutions for that. The way governments view crypto currencies has started to change positively in recent years. Many have realized that they can't control Bitcoin and are looking for ways to regulate it. Centralized exchanges' KYC/AML solutions are part of this. But it's still possible to use Bitcoin without using anything centralized. I don't think governments have the power, resources, and more importantly the will to change that.

[hd49728]

AML policy changes very little things. Those who want to launder money can still do what they want with fiat money. They don't need crypto currency solutions for that.

They can launder dark money with many methods, with fiat currency or with cryptocurrency. They do money laundering for a long time and will not stop because of AML in cryptocurrency market. If banks can not prevent money laundering, even laws against it in bank field exists a longer time than in cryptocurrency field, it's hard to think AML will block all money laundering with cryptocurrencies as tools for criminals.

The way governments view crypto currencies has started to change positively in recent years. Many have realized that they can't control Bitcoin and are looking for ways to regulate it. Centralized exchanges' KYC/AML solutions are part of this. But it's still possible to use Bitcoin without using anything centralized. I don't think governments have the power, resources, and more importantly the will to change that.

Governments have their biased regulations against this market because they hate it, and don't want it to grow more and grow with sharp rate. To do this, they pass more new and stricter regulations against this market but their law enforcement shows that they don't treat cryptocurrency market fairly and abuse their power into law enforcement.

2024 Cryptocurrency money laundering report. Dark market has low share of money laundering concentration.

[Questat]

AML policy changes very little things. Those who want to launder money can still do what they want with fiat money. They don't need crypto currency solutions for that. The way governments view crypto currencies has started to change positively in recent years. Many have realized that they can't control Bitcoin and are looking for ways to regulate it. Centralized exchanges' KYC/AML solutions are part of this. But it's still possible to use Bitcoin without using anything centralized. I don't think governments have the power, resources, and more importantly the will to change that.

We’re already on that path, and the changes have hit the market hard, especially when it comes to privacy. Before, we could freely gamble using exchanges or online wallets, but now we have to be cautious, as many exchanges are prohibiting gambling transactions. That’s a big shift since it takes away the ease of quickly trading and cashing out your winnings. I get that change is inevitable, and we just have to adapt and not expect things to go back to how they were.

[fikrett]

AML policy changes very little things. Those who want to launder money can still do what they want with fiat money. They don't need crypto currency solutions for that. The way governments view crypto currencies has started to change positively in recent years. Many have realized that they can't control Bitcoin and are looking for ways to regulate it. Centralized exchanges' KYC/AML solutions are part of this. But it's still possible to use Bitcoin without using anything centralized. I don't think governments have the power, resources, and more importantly the will to change that.

We’re already on that path, and the changes have hit the market hard, especially when it comes to privacy. Before, we could freely gamble using exchanges or online wallets, but now we have to be cautious, as many exchanges are prohibiting gambling transactions. That’s a big shift since it takes away the ease of quickly trading and cashing out your winnings. I get that change is inevitable, and we just have to adapt and not expect things to go back to how they were.

Can you tell me a bit more about that? What was considered a gambling transaction and how did they describe it? Never experienced or seen it myself, that's why I am asking, of course.

[Haunebu]

I wouldn't say it killed the decentralised aspect of BTC, but it definitely minimised it to a large extent thanks to constant government interference. These policies can never fully kill off such an important feature which is the silver lining.

Also, I noticed some people actually talking about siding with Trump because of his support for crypto in this thread which is nonsensical since no political leader at that level will ever honestly support BTC and the crypto world.

[tbct_mt2]

I wouldn't say it killed the decentralised aspect of BTC, but it definitely minimised it to a large extent thanks to constant government interference. These policies can never fully kill off such an important feature which is the silver lining.

Also, I noticed some people actually talking about siding with Trump because of his support for crypto in this thread which is nonsensical since no political leader at that level will ever honestly support BTC and the crypto world.

Wanting and pursuing privacy is not a crime, it's basic human rights and it is universally written in many national constitutions. It's only governments respect their national constitutions and actually serve their people or only want to distort constitutions, basic human rights, to gain more power for their administration at national scale.

Governments can not catch all crimes, can not prevent all money laundering activities, and they will not be able to prevent all money laundering through Bitcoin blockchain. But to be clear, Bitcoin blockchain was not created to serve criminals and for money laundering. Governments can not let criminals exist in their countries and only try to break down tools used by criminals. It's like catching things on tip of iceberg but under it deeply, crimes are there and untouched.

Governments will not be able to break down Bitcoin decentralization too.

[fikrett]

I wouldn't say it killed the decentralised aspect of BTC, but it definitely minimised it to a large extent thanks to constant government interference. These policies can never fully kill off such an important feature which is the silver lining.

Also, I noticed some people actually talking about siding with Trump because of his support for crypto in this thread which is nonsensical since no political leader at that level will ever honestly support BTC and the crypto world.

Yeah, can play that game all he wants, but at the end of the day, he is a politician, not a crypto enthusiast, for a lack of a better word

[Synchronice]

As we all know, Bitcoin is decentralized, and in its early days, we were proud of that fact--believing no government could control it and even thinking it might replace fiat. Those were the days when we were highly optimistic about Bitcoin’s future.

However, with the current AML (Anti-Money Laundering) policies in place, it seems like Bitcoin’s decentralization is being challenged by regulations, especially with the introduction of KYC (Know Your Customer) requirements.

Know Your Customer requirement doesn't ruin the decentralization of Bitcoin, nor does the AML policy. What destroys Bitcoin decentralization is the fact that centralized companies, i.e. companies like Binance, Coinbase, BlackRock, Fidelity and others destroy the decentralization. The fact that Trump (if he wins) plans to make the rest of the Bitcoins labeled as Made In The USA, kills the decentralization.
When centralized companies, that are managed and regulated by a certain group of people or by the governments, take their hands on a majority of coins, miners, nodes and so on, that process is what kills decentralization.

[$weetne$$]

However, with the current AML (Anti-Money Laundering) policies in place, it seems like Bitcoin’s decentralization is being challenged by regulations, especially with the introduction of KYC (Know Your Customer) requirements.

Can we still enjoy the decentralized nature of bitcoin?

The government can challenge Bitcoin decentralization but they would never win because Bitcoin can succeed without the government. Why many people think that soon Bitcoin is going to become centralized is because they think that Bitcoin can not succeed without the government approval. You do not need a centralized exchanges to trade Bitcoin and you do not need centralized wallets also. You can use non constodial wallets and P2P exchange to trade your Bitcoin and still you would not have to do any KYC. Bitcoin is not the only currency being used to commit money laundering because fiats is still the biggest currency they use but they do not like Bitcoin because it gives power to us over our finances but the government wants to control our finances and not allowing us to do it ourselves.

[Wakate]

it’s not about the network but more about the market. Check out some of the posts above..sorry for any confusion!

All right, i get your point now. It is true that there are more centralized firms and services in the industry than there are decentralized ones, and the government continues to attack the industry with regulations and anti-privacy policies. However, there are still ways we can use BTC privately without giving our data to centralized third party services, the thing is most people in the industry don't care about their privacy, so they choose the 'convenience' of centralized services.

The decentralized exchanges are gradually reducing and ineffective because of the government activities claiming that they are promoting scams and money laundry. This is the language of the government and they want to regulate everything in their palm. The way things are going, we could be surprised that if the government keeps striking decentralized exchanges because of their anonymous transactions, we could be surprised that it will effect our privacy and we will no longer be able to carry out transactions easily without our information being leaked. We are seeing more of centralized exchanges these days and people are forgetting about the centralized ones even when it comes to coins listing.

[pawel7777]

Know Your Customer requirement doesn't ruin the decentralization of Bitcoin, nor does the AML policy. What destroys Bitcoin decentralization is the fact that centralized companies, i.e. companies like Binance, Coinbase, BlackRock, Fidelity and others destroy the decentralization. The fact that Trump (if he wins) plans to make the rest of the Bitcoins labeled as Made In The USA, kills the decentralization.
When centralized companies, that are managed and regulated by a certain group of people or by the governments, take their hands on a majority of coins, miners, nodes and so on, that process is what kills decentralization.

From a purely network decentralisation point of view, the KYC requirements indeed don't matter (unless they could get expanded on miners etc), but apart from network decentralisation, there's another crucial feature of Bitcoin  - censorship resistance.
If we sleep-walk into a reality where all Bitcoin transactions are only done by verified users using KYC-compliant exchanges/wallets with any peer-to-peer platforms or non-custodial wallets delegalised, that feature could get heavily crippled.

And I don't think Blackrock or alike would care too much about taking control over Bitcoin's network. It wouldn't make much sense for them to attempt that, unless we're talking about some larger plot involving governments and three-letter agencies.