[Question] If bitcoin becomes everyday money

[jossiel]

This simply means it is not possible to adopt bitcoin as everyday money.

It's possible.

The transaction fees have been low for so long and if that's not yet enough, there's lightning network where everyone can adopt as well.

Because chances are people always get scammed one way or the other. Since it is impossible to tackle the issue of scam identity, it will only be an alternative to fiat system for those who value privacy.

Being scammed is subjective because it also happens in fiat, and even if we value privacy in the other. These scammers will always exist and will find the weakest link that they can target.

[Darker45]

In more ways than one.

The blockchain is transparent. Investigators can track transactions. Moreover, Bitcoin addresses are public. In a scenario where Bitcoin is everyday money, addresses are shared with restaurants, shops, grocery stores, and other merchants. They're used to pay bills and taxes and tuition fees and whatnot. At some point, it could have been linked to a name or a shipping address or a contact number. It could be linked to a social media account, email, subscription, and so on.

We're far from an ideal world where every Bitcoin user is perfect in keeping their anonymity in every transaction. That's next to impossible.

[Alvin_talk]

Think about how you transact with cash in the real world.  Cash is not easy to track either, is it?  So when you give cash to someone who turns out to be a fraud, you dont blame physical paper bills, and you certainly dont expect a bank to undo the transaction.

I'd say cash is way more easier to track. For somebody to scam another via cash, it must be physical. That means, if it in a supermarket, the CCTV camera will most likely spot the face of the scammer. The use case for scam involving cash is just analogue in nature, so you would likely come in contact will the scammer or culprit. Therefore you can be able to identify the scammers to some reasonable extent.
However, Bitcoin is digital and in a decentralised setting, you can never identify the individuals involved in fraudulent activities.

You can, you just have to change your payment model.
The reason you keep getting scammed is that you follow pay first, dispute later model.

When using Bitcoin, leave no room to get scammed. verify first, then pay.

And if someone doesn't develop the knowledge to avoid being scammed, they can use escrow.

Show me someone who has never got scammed one way or the other then I will believe your model. You have be realistic bro, the population of the world is approximately 8.3 billion people. Out of these number, approximately 23% fall victim to scam. This means if bitcoin is used as everyday money we would expect similar percentage of scams without penalties for the scammers, that smells as injustice to the victims imo.

hence why CEX exist to make identification easy.
Funny also is the fact that fraudsters must at some point spend the funds they stole no matter how long it takes and that's a point were they get caught, so this stresses on the point I was trying to make earlier by saying Bitcoin isn't anonymous but the base layer is pseudonymous by design.

Introducing CEX to bitcoin is thesame thing as handing over your funds to centralised commercial banks that are controlled by the government. That defeats the sole purpose of bitcoin in a way (privacy). So CEX is not an option in this case.

[Dr.Bitcoin_Strange]

Lets imagine an ideal world where bitcoin is truly used in a decentralised manner (no regulated exchanges/merchants) and is accepted as everyday money.

I tried to imagine this world you are painting in your head and what I didn't see in that world is how the government will allow Bitcoin to operate in that manner without centralized and regulated platform being in existence. Come to think about it, with the way government are even looking for possible means to control Bitcoin because they don't want privacy, how is it possible that there will be a world were Bitcoin will be the only used money for daily spending by individuals and companies and there won't be a centralized platforms? That might be possible if there is no government again  , but that won't even be possible.

[Josefjix]

I am asking because centralised exchanges were not part of the original plan. We are supposed practice self custody for the original purpose of bitcoin to be achieved. Run a full node and manage our bitcoin client (Bitcoin core and others) instead of relying on CEX. I am particularly concerned how identifying and penalising fraudsters will be possible in such an ideal world.

There is no way you can track it and gets such hacker arrested, even though the transaction goes to a centralized exchange, except they reveal the hackers identity if you can pay the price required by the cex, but I doubt you'll be given the information.

Look, the only way thiefs can only gets your Bitcoin is if you are careless with your keys, no other way.

We had heard many stories about many crypto firms been hacked, but few or no information how they were caught and penalized, except the news where a stolen coins was returned, not all coon (can't remember the news actually,but such happens)

[Alvin_talk]

There is no way you can track it and gets such hacker arrested, even though the transaction goes to a centralized exchange, except they reveal the hackers identity if you can pay the price required by the cex, but I doubt you'll be given the information.

What price are you talking about? Maybe you do not know why CEX require your KYC, although they are using it for other illegal activities but the major purpose is to comply with international anti-money laundering (AML) laws. Anytime a given government request for these information, they provide it without requesting for a penny.

Take the case of Coldcard for example, if the attacker makes use of any centralised exchange today, his identity will be revealed and he will be apprehended accordingly. With CEX your identity can be revealed instantly, its not a rigorous process.

[AprilioMP]

First, Bitcoin was not created to be a replacement for fiat currency but as a digital currency that makes transactions easier for users. The responsibility lies entirely with the user or owner.
If Bitcoin were to become an everyday currency, it’s already happening—with the understanding that anyone who wants to use Bitcoin is free to do so if they choose not to use fiat currency. You know this is happening in El Salvador.

Second, just like any monetary transaction, Bitcoin transactions are not anonymous; anyone can track them as long as they have the address. All transactions are recorded. Nothing is secret.

[BlackHatCoiner]

I am asking because centralised exchanges were not part of the original plan. We are supposed practice self custody for the original purpose of bitcoin to be achieved. Run a full node and manage our bitcoin client (Bitcoin core and others) instead of relying on CEX. I am particularly concerned how identifying and penalising fraudsters will be possible in such an ideal world.

Welcome to the cypherpunk Wild West. If your opsec fails, there is no manager to speak to. Code is law, if you make a mistake your money is gone. That's the problem with "being your own bank"; it comes with responsibility.

If you purchased Bitcoin thinking it is going to replace your local Fiat, you had a very unrealistic expectation.  Bitcoin will probably replace Cash once Cash becomes digitalized.

Which is one good reason why they will never ban cash!

[Stalker22]

Think about how you transact with cash in the real world.  Cash is not easy to track either, is it?  So when you give cash to someone who turns out to be a fraud, you dont blame physical paper bills, and you certainly dont expect a bank to undo the transaction.

I'd say cash is way more easier to track. For somebody to scam another via cash, it must be physical. That means, if it in a supermarket, the CCTV camera will most likely spot the face of the scammer. The use case for scam involving cash is just analogue in nature, so you would likely come in contact will the scammer or culprit. Therefore you can be able to identify the scammers to some reasonable extent.
However, Bitcoin is digital and in a decentralised setting, you can never identify the individuals involved in fraudulent activities.

How exactly is cash easier to track than Bitcoin?  There is no paper trail, no public ledger...  You mentioned CCTV cameras, of course, thats one way to track down a suspect in the real world.  But thats not always possible.  You might have a face on a camera, but thats far from getting your money back.

With Bitcoin, we have a public ledger that is immutable and permanent.  Literally anyone in the world, including law enforcement, intelligence agencies, and blockchain analytics firms, can track the flow of funds from wallet address to wallet address, down to the last satoshi.

Show me someone who has never got scammed one way or the other then I will believe your model. You have be realistic bro, the population of the world is approximately 8.3 billion people. Out of these number, approximately 23% fall victim to scam.

According to these figures, approximately 77% of people have not fallen victim to scams.  I think that answers your first question.

This means if bitcoin is used as everyday money we would expect similar percentage of scams without penalties for the scammers, that smells as injustice to the victims imo.

What do you mean by "no penalties for scammers"?  That assumes that no scammers involved in Bitcoin-related scam have ever been caught or convicted by law enforcement, which simply is not true.

[Cleanshit]

With Bitcoin, we have a public ledger that is immutable and permanent.  Literally anyone in the world, including law enforcement, intelligence agencies, and blockchain analytics firms, can track the flow of funds from wallet address to wallet address, down to the last satoshi.

No doubt Bitcoin do make recovery difficult most times, but having to say that scammers can’t be identified is too broad because blockchain do give investigators a permanent trail to do follow. Even in case that to connect an address to real person is difficult, but I also think that the irreversible of Bitcoin transaction it biggest issue. It very important you verify who you are actually dealing with before you want to send money, because even after the scammer is being identified, to gwt back the funds is a big deal cause it not guaranteed.

[Richbased]

I don't know if this has been discussed before, if so I'll just lock the thread.

The original purpose of bitcoin is to be able to transact peer to peer without intermediaries or centralised authorities. Lets imagine an ideal world where bitcoin is truly used in a decentralised manner (no regulated exchanges/merchants) and is accepted as everyday money. How will attackers be tracked, identified and penalised if they steal coins from others. Is there any possible way to track the attackers since KYC is not required to initiate a transaction?

I am asking because centralised exchanges were not part of the original plan. We are supposed practice self custody for the original purpose of bitcoin to be achieved. Run a full node and manage our bitcoin client (Bitcoin core and others) instead of relying on CEX. I am particularly concerned how identifying and penalising fraudsters will be possible in such an ideal world.

OP you asked a very good question. However, if bitcoin transactions were to remain decentralised without the action of moving it to exchange wallets where KYC will force out the identity of the receiver, then bitcoin transactions will be done directly with people you know. And of course, most bitcoin transactions are done between people that know themselves so if bitcoin is stolen, the real owner will only need to track the movement of the bitcoin through the Blockchain and begin to investigate each wallets that the coin was sent to.

You can do that by reporting to Blockchain forensics, they will be tracking the movement of the bitcoin on public ledger and likely identify any of the addresses it was moved to, but it must be an address that has been posted online. It's a rigorous process that can even take many years to succeed.

[Jostern]

How will attackers be tracked, identified and penalised if they steal coins from others. Is there any possible way to track the attackers since KYC is not required to initiate a transaction?

Since the bitcoin transaction are recorded publicly then it’s easier to identify the attacker and trace the address the stolen bitcoin were moved to. Just that the blockchain will not tell you who controls the address because address aren’t tied to any name identity but you can see the chain for transactions.

You’re right, whatever exchange you’re using, every transaction are quite recorded, the record of the receiver transaction are always recorded and kept in a clean state, this addresses can always be traced, but when it comes to the Government investigation on some certain Criminal transactions Investigation that have been done, but I learnt there are technologies that can identify the owner of the address through investigation of the exchange registration to reveal an identity, I heard about this from someone, I don’t really know how true that is because it’s something I absolutely have no knowledge about how all that works, people who are involved in cybersecurity would have understanding of what is happening, getting their information and identity is possible through that way in exchanges.

[aoluain]

I don't know if this has been discussed before, if so I'll just lock the thread.

The original purpose of bitcoin is to be able to transact peer to peer without intermediaries or centralised authorities. Lets imagine an ideal world where bitcoin is truly used in a decentralised manner (no regulated exchanges/merchants) and is accepted as everyday money. How will attackers be tracked, identified and penalised if they steal coins from others. Is there any possible way to track the attackers since KYC is not required to initiate a transaction?

I am asking because centralised exchanges were not part of the original plan. We are supposed practice self custody for the original purpose of bitcoin to be achieved. Run a full node and manage our bitcoin client (Bitcoin core and others) instead of relying on CEX. I am particularly concerned how identifying and penalising fraudsters will be possible in such an ideal world.

Scammers and hackers dont solely operate through centralised exchanges so regardless of
those exchanges being in operation its possible to be scammed anyway..

Its important to realise that being scammed is not the fault of the Bitcoin network, it comes
down to our own security infrastructure and habits

Being hacked is not the fault of the Bitcoin network either, thats from hardware/software
shortcomings from online platforms and also the security level those platforms use to
protect their customers data.

Outside an online platform its very difficult to trace scammers IMO.

[Alvin_talk]

How exactly is cash easier to track than Bitcoin?  There is no paper trail, no public ledger...  You mentioned CCTV cameras, of course, thats one way to track down a suspect in the real world.  But thats not always possible.  You might have a face on a camera, but thats far from getting your money back.

With Bitcoin, we have a public ledger that is immutable and permanent.  Literally anyone in the world, including law enforcement, intelligence agencies, and blockchain analytics firms, can track the flow of funds from wallet address to wallet address, down to the last satoshi.

Maybe you have misunderstood me, I'll suggest you read the OP again. The concern here is holding criminals and scammers accountable for their actions. Blockchain analysis doesn't reveal the major information required to fish out the scammer (Name,  passport photograph, etc.) That means the scammer cannot be penalised for his crime.

Please note that I am not anti-bitcoin, I am only trying to visualise a world where bitcoin is truly decentralised (No CEX, no intermediaries) and is used as everyday money. I gave you a scenario where the scammer can be identified and possibly penalised if the scamming occurred via cash transaction. Can you give me an scenario or example where bitcoin transaction can be fish out the full identity of the scammer without using a centralised exchange?

[bitbollo]

good question... decentralized technology could allow anything to be built on top.
CEX have been essentials to be honest...without these you will never be able to trade coin. DEX are not made for basic users...

about robbery and identification, in a certain way this is what happens in the past once you was dealing with physical valuables.
or still today, there are some people that deal with enourmous amount of cash (that doesn't requires a KYC). in any case btc it's just pseudo-anonyomus.
thiefs could be tracked in the same way as any other item that doesn't have a KYC . 
there are some retards that try to explain for ours their technical setup but in the real life this isn't working at all...
there are dozens of "fingerprints" left everywhere. plus there are also some solutions (in some cases not ethical) that would clearly help to get anyone.



 

[Silikiem]

I don't know if this has been discussed before, if so I'll just lock the thread.

The original purpose of bitcoin is to be able to transact peer to peer without intermediaries or centralised authorities. Lets imagine an ideal world where bitcoin is truly used in a decentralised manner (no regulated exchanges/merchants) and is accepted as everyday money. How will attackers be tracked, identified and penalised if they steal coins from others. Is there any possible way to track the attackers since KYC is not required to initiate a transaction?

I am asking because centralised exchanges were not part of the original plan. We are supposed practice self custody for the original purpose of bitcoin to be achieved. Run a full node and manage our bitcoin client (Bitcoin core and others) instead of relying on CEX. I am particularly concerned how identifying and penalising fraudsters will be possible in such an ideal world.

I wonder what the original purpose of bitcoin really is but all I can tell is that bitcoin actually has achieved its purpose of decentralization in the sense that it operates without any central bank or government regulation and any corporate control or issuance. I think the widespread medium of exchange for everyday transaction is more or less an idea only conceived by people who thinks or perhaps they want bitcoin to replace the local fiat currency, but in a real sense, bitcoin wasn’t created for that. Bitcoin cannot replace the local currency for everyday transactions even though most countries now adopt bitcoin as a means of legal tender doesn’t mean they’re doing away with their local currency. Bitcoin transactions are only traceable in the blockchain but not to the level of revealing the names or addresses of users.

[GeorgeJohn]

The original purpose of bitcoin is to be able to transact peer to peer without intermediaries or centralised authorities. Lets imagine an ideal world where bitcoin is truly used in a decentralised manner (no regulated exchanges/merchants) and is accepted as everyday money. How will attackers be tracked, identified and penalised if they steal coins from others. Is there any possible way to track the attackers since KYC is not required to initiate a transaction?

The fact is that you can't transact in bitcoin without bitcoin address, so to track every transactions you made, it's through your address, and with blockchain explore, bitcoin transaction can be traced through the transactions ID. So i want you to know that with the identity of transactions, the history of everything you do can be review through the blockchains...

[knowngunman]

How will attackers be tracked, identified and penalised if they steal coins from others. Is there any possible way to track the attackers since KYC is not required to initiate a transaction?

Since the bitcoin transaction are recorded publicly then it’s easier to identify the attacker and trace the address the stolen bitcoin were moved to. Just that the blockchain will not tell you who controls the address because address aren’t tied to any name identity but you can see the chain for transactions.

I embold two parts from your post which I think they're contradicting each other. At first, you said it's easier to identify the attacker but in the following part you also confirmed that the blockchain will not tell you who controls the address since they are not tied any name identity. Now, I'm forced to ask what the hell you mean by easier to identify in the first place? I guess you mean to write easier to tracked, right?

Without third party help, it's not easy to identify the attacker. I don't even know if it's even possible to identify them. Of course, tracking them should not be an issue since the blockchain keeps record of every single transaction. So tracking them is much easier but identifying them posed a problem. In worst case, their address could be placed on watch list and have their transactions rejected by miners which is very unlikely to happen.

The best thing to do is to never allow your wallet to be compromised.

[Agbe]

I am asking because centralised exchanges were not part of the original plan. We are supposed practice self custody for the original purpose of bitcoin to be achieved. Run a full node and manage our bitcoin client (Bitcoin core and others) instead of relying on CEX. I am particularly concerned how identifying and penalising fraudsters will be possible in such an ideal world.

The store of value has taken over the original plan of bitcoin by the creator Satoshi Nakamoto of his peer to peer plan and transaction IDs are there to track the flow of transaction though it would be difficult to know who own the address but it can be trance to the final flow of the transaction.  And privacy would have been in a maximum but Centralized Exchange has breached the privacy of bitcoin transaction.

[ImGenius]

I am asking because centralised exchanges were not part of the original plan. We are supposed practice self custody for the original purpose of bitcoin to be achieved. Run a full node and manage our bitcoin client (Bitcoin core and others) instead of relying on CEX. I am particularly concerned how identifying and penalising fraudsters will be possible in such an ideal world.

Bitcoin is designed in such a way that if someone mistakenly sends it to another address it is never possible to reverse it and it is also not possible to know who owns the address it was sent to. There is no ID device fingerprint or anything else through which ownership can be tracked.
According to your imagination if everyone starts using Bitcoin as the main currency and decentralize way then users will definitely start becoming much more careful and there may be many platforms, tools, or other things through which people could stay more secure. Criminal activity can never be completely destroyed and even nowadays there are many ways scammer handle money that the government cannot track.