[Question] If bitcoin becomes everyday money

[Chinesebaby]

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?

Centralized platform did actually help eradicate Bitcoin theft with the use of KYC when initiating transactions amongst users globally. Because if there was never a centralized platform which made KYC mandatory, and ensured that both parties where satisfied before coin release on its p2p, I'm sure Bitcoin theft would have been on a high increase, and there is definitely no way such individual would have been tracked, since everything was done anonymously. However, I have not used a decentralized exchange before and don't know how p2p servers on such platforms works, but if it actually worked just like the centralized exchange, whereby the buyer have to confirm the amount before releasing a coin through its escrow, then I think it would have been okay. But I eventually someone happened to have successfully stolen your Bitcoin, he would have never been caught. And that's the advantage centralized exchange have over decentralized ones.

[hd49728]

Centralized platform did actually help eradicate Bitcoin theft with the use of KYC when initiating transactions amongst users globally. Because if there was never a centralized platform which made KYC mandatory, and ensured that both parties where satisfied before coin release on its p2p, I'm sure Bitcoin theft would have been on a high increase, and there is definitely no way such individual would have been tracked, since everything was done anonymously.

Do you really believe that centralized exchanges, platforms can help to get stolen money back to victims?

Many big hacks in Bitcoin and cryptocurrency market history while stolen funds gone forever and have never been rescued and returned to victims. With or without KYC, if an exchange was hacked, bankrupted, there will be very small chance for users to get money back. Exchanges might simply submit their bankruptcy document, close their services or even scam exit.

Your post looks like you believe in magic power of mandatory KYC in protecting users and their money while KYC is not such a perfect bullet and solution.
Why KYC is extremely dangerous – and useless.

[AgriTrack]

First of all, as long as governments exist, Bitcoin can never become a fully decentralized payment method that can be used for day to day payments and financial settlements, because governments won't let that happen, and we will always be forced to use fiat currencies within the countries we live in, unless someone in the future decides to buy a big peace of land, and create a new country where Bitcoin will be the primary currency that can be used openly and in a decentralized manner, but that just sounds like a dream, right? Same is the case with what you said.

However, hypothetically speaking, even if it becomes a day to day currency, we will need to accept the fact that nothing can be completely flawless, whether it's a system, payment method, or anything. The security of our funds and whether we get scammed or not depends totally on how we manage our funds. If we can't do it properly, then we will surely face problems, and those problems might not be solvable in that case, but if we stay careful, we might not face such situations at all.

[PrivacyG]

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!

Do you think so?  I would rather see a 'non traceable' Cash ban combined with demonizing Bitcoin, or at least demonizing the non custodial way of using it to reduce its use as much as possible.  Which I would argue is really easy to accomplish using Social Media and 'influencers'.

I do wish you are right!  But I do not know how much I should hope for it.  They already advertise the Digital Euro as 'a digital form of cash', children of today will grow with that and there goes a new generation ready for the real, new, degraded meaning of 'Cash'.

Hell.  I am such a pessimist and a mood breaker, am I not.

[Curious T]

This is why you must take the responsibility that is attached to self custody in order to secure your wallet properly.

In such an ideal world, taking responsibility of self custody is not enough. Apart from privacy breaches, Imagine if you fall for a clone scams, the fraudster clones an e-commerce site and attach his personal bitcoin address to it and you buy a product from the cloned site, your coins are gone.

First of all, I think you have mistaken the meaning of "Ideal". In an ideal world, Bitcoin would not be stolen; there would be no scammers and thieves because an ideal world means a perfect world. It doesn't exist.

Secondly, the example you gave is the exact reason you must take responsibility for your coins. That is what self custody is all about. If you log in to a website, it is your responsibility to make sure it is an authentic website and not a cloned or fake site. Before sending Bitcoin to any address, you have to make sure it is the real address you want. Those are your responsibility. Those are things you have to do for yourself no matter what.

You can lose your Bitcoin in ways that there was nothing you could have done about, but they are very rare, like the recent coldcard situation. Going to a fake website, sending to the wrong address, losing your seed phrase, exposing your device or wallet, clicking of phishing links, and other similar things are things you have to be responsible for.

[hd49728]

First of all, I think you have mistaken the meaning of "Ideal". In an ideal world, Bitcoin would not be stolen; there would be no scammers and thieves because an ideal world means a perfect world. It doesn't exist.

There is no ideal or perfect thing and Bitcoin is not perfect so that it needs to have developments and upgrades technically over time. The things make Bitcoin is attractive with many people are decentralization, censorship resistance, no ways to freeze bitcoins in non custodial wallets of the others by any centralized action, and it's impossible to crack/ brute force Bitcoin private keys with current technology.

As being said, Bitcoin will still need to have continuous developments to upgrade itself and to cope with newest security challenges over time especially in eras of AIs and quantum computers.

The Rise of the Machines and The lesson: assume machines read your code.

[devouring-DARKNESS]

Bitcoin's purpose was never to completely replace everyday money, transacting with it is one thing but decidintthst it will replace your own local currency is a different matter all together and that won't be possible, not with how the world works right now.
You could protect your bitcoin by making sure it's locked behind a secure open source wallet, attacks will be less likely to happen if you do because id you are unlucky to lose your bitcoin you will not be able to find who attacked you, tracing the transaction is very different from finding out who is responsible for it, it's not like they tie names to the addresses, unless you have the government on your side.

[Alpha Marine]

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.

I doubt that.
Even if cash becomes extinct, which is still a very long time away from happening, Bitcoin won't replace it. We would just have the usual fiat currency that we use now. We already use credit cards and other cashless transactions that we do with fiat. If or when cash no longer exists, it would be business as usual as it is now.

Bitcoin becoming a globally recognised currency is not something I think will ever happen. I don't believe the government would allow it to become so big as a currency because that would limit the deposits banks get, and that will affect the loans banks give.

[DiMarxist]

First of all, as long as governments exist, Bitcoin can never become a fully decentralized payment method that can be used for day to day payments and financial settlements, because governments won't let that happen, and we will always be forced to use fiat currencies within the countries we live in, unless someone in the future decides to buy a big peace of land, and create a new country where Bitcoin will be the primary currency that can be used openly and in a decentralized manner, but that just sounds like a dream, right? Same is the case with what you said.

However, hypothetically speaking, even if it becomes a day to day currency, we will need to accept the fact that nothing can be completely flawless, whether it's a system, payment method, or anything. The security of our funds and whether we get scammed or not depends totally on how we manage our funds. If we can't do it properly, then we will surely face problems, and those problems might not be solvable in that case, but if we stay careful, we might not face such situations at all.

That is absolutely correct, one of the biggest challenge that bitcoin is facing is government. Government will not allow bitcoin to become the every day currency that people will use in transacting. This is the reason why government is coming up with differnt excuses espercially the issue of kyc which government is using, all over the world in taking away the very first gaol of bitcoin away which is decentraliztion.

Again what we should know is that bitcoin , was not originally designed to be used as our everyday money . Bitcoin was created to bring about privacy which was lacking in the world monetary system which exist. The truth is that bitcoin is a threat to the world finacially system hence the reasson why givernment will not allow bitcoin to operates freely.

When it come to bitcoin transaction, centralized exchanges is the avenue that we can use in buyin and selling . But centralized exchanges should not be used in storing our bitcoin because that is not a very good method because , centraluzed exchanges are not too save.

[PrivacyG]

I doubt that.
Even if cash becomes extinct, which is still a very long time away from happening, Bitcoin won't replace it. We would just have the usual fiat currency that we use now. We already use credit cards and other cashless transactions that we do with fiat. If or when cash no longer exists, it would be business as usual as it is now.

Bitcoin becoming a globally recognised currency is not something I think will ever happen. I don't believe the government would allow it to become so big as a currency because that would limit the deposits banks get, and that will affect the loans banks give.

If Cash does become extinct then only Bitcoin will offer similar value.  At least Privacy wise.  Which means it will replace Cash.  I did not say it will become globally recognized, or that it will replace Cash officially.  It will be the only version of Cash you can really have however.

[Stalker22]

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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?

Sure.  In your scenario involving a cash-related scam, you used the example of a supermarket and CCTV cameras.  Likewise, in a scam involving Bitcoin we can use the same example.  Investigators can easily follow the money trail and determine the exact time and date when the scammer spends the stolen bitcoins to purchase physical goods.  Thats enough for them to get an order to view security footage in a supermarket or any other physical store.

Once they match that timestamp on the blockchain with the store register logs, it is just like a traditional cash or card investigation.  The public ledger acts as a digital paper trail leading right up to the identity of the scammer.