[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]

~
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.

[Antotena]

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.

It was not to replace money, it was supposed to help people get what they couldn't get from fiat payment. You can't do censorship resistance with fiat, you are going to be bounce back if you don't comply with the banks or the payment medium where you want to make payment. You can't send money to some people in other part of the world but Bitcoin will do more than that for you, Bitcoin will help you pay even the friends of the enemies because there is no enemies in Bitcoin.

Some people use it for everyday money, by the volume traded worldwide you will know that Bitcoin is traded globally and sent from one person to another, but it can't replace money because one thing I know is that anything the government has not approved, many people will be afraid to use it. It does not have government backing and I doubt if it will because the people who will let it grow does not want to see Bitcoin at the top.

[Somegory]

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.

No regulated exchanges/ merchants you said.
As if regulation is why attackers go after Bitcoin holders and spenders.

If Bitcoin becomes everyday money there will be not much difference as how attackers go after people who have money.
And there are others ways .....

If I see you using a Bitcoin ATM machines, it means you have some Bitcoin, I am coming for you.
If I see you spending either Bitcoin or money in a store that says "we accept Bitcoin here" it's probably because you hold Bitcoin.
Right? Night invaders coming.

You can still become a target even if the world is decentralised.

[SeriouslyGiveaway]

No regulated exchanges/ merchants you said.
As if regulation is why attackers go after Bitcoin holders and spenders.

If Bitcoin becomes everyday money there will be not much difference as how attackers go after people who have money.
And there are others ways .....

If I see you using a Bitcoin ATM machines, it means you have some Bitcoin, I am coming for you.
If I see you spending either Bitcoin or money in a store that says "we accept Bitcoin here" it's probably because you hold Bitcoin.
Right? Night invaders coming.

Privacy and anonymity are important to keep your bitcoin and your life safely because if you are not doing things carefully for your privacy and anonymity, you will easily become target of bad people both online and offline.

Online: you can lose your bitcoins through hacks by many ways, phishing, malwares, and more.
Offline: you can lose your bitcoins, even your life by physical attacks.

https://stats.gart.io/

You can still become a target even if the world is decentralised.

Decentralized or centralized, if you are not careful, you will have all above risks.

How to manage your Bitcoin like a whale?
The bitcoiner's guide to physical security.
Can duress wallets stop Bitcoin attacks?
How to protect your Bitcoin from $5 wrench attacks?

[Ucy]

Decentralization does not mean lack of authority, rules or regulation. Even the Bitcoin nodes are self-regulating otherwise they will overlook fraudulent transactions, spam attacks, etc.

The main purpose of decentralization is basically to give control and power back to the community or everyone rather than an individual or group having unilateral control. This becomes more necessary in a condition where the center, head or individuals are less trustworthy and less reliable to make unilateral decision or control things for the rest of society. In this case, everyone became distrusting of one another and chooses checks and balances before anything is accepted or approved.  If something is not right, it's rejected.  This includes the application of basic laws or the right rules. The basic law are the root from which all laws and rules spring up. But if you consider the current laws of countries, you will certainly notice that they have deviated alot from this root. For example, law on privacy, transparency and human rights

With decentralization, the people make sure that the necessary things are done and they are according to the basic or fundamental laws. If a thief steals bitcoins and is reported, the community hunts for the thief, who'll likely be hiding among the members of the community, without violating the law on privacy of the innocent members. We could do this with privacy-friendly tools. Or we could blacklist or tag alleged stolen coins, with proofs of theft, and the coins will nolonger be worth spending unless proven to be clean.. Whoever or wherever the coins are sent to, it confisticates or freezes them and send them back to community security agents to investigate and possibly hand them back to their owners

[justdimin]

Decentralization does not mean lack of authority, rules or regulation. Even the Bitcoin nodes are self-regulating otherwise they will overlook fraudulent transactions, spam attacks, etc.

The main purpose of decentralization is basically to give control and power back to the community or everyone rather than an individual or group having unilateral control. This becomes more necessary in a condition where the center, head or individuals are less trustworthy and less reliable to make unilateral decision or control things for the rest of society. In this case, everyone became distrusting of one another and chooses checks and balances before anything is accepted or approved.  If something is not right, it's rejected.  This includes the application of basic laws or the right rules. The basic law are the root from which all laws and rules spring up. But if you consider the current laws of countries, you will certainly notice that they have deviated alot from this root. For example, law on privacy, transparency and human rights

With decentralization, the people make sure that the necessary things are done and they are according to the basic or fundamental laws. If a thief steals bitcoins and is reported, the community hunts for the thief, who'll likely be hiding among the members of the community, without violating the law on privacy of the innocent members. We could do this with privacy-friendly tools. Or we could blacklist or tag alleged stolen coins, with proofs of theft, and the coins will nolonger be worth spending unless proven to be clean.. Whoever or wherever the coins are sent to, it confisticates or freezes them and send them back to community security agents to investigate and possibly hand them back to their owners

Actually, there is no blacklisting possible in the blockchain; the addresses can only be labelled or tagged so that they can be recognized if someone is looking into them. However, it's not possible for anyone to not allow bitcoins from going around or anything like that, and for everyone to be able to recognize bad or unclean bitcoins or marked addresses for scams or theft, they have to be knowledgeable enough to understand how they can verify each address or transaction in the blockchain, but this still wouldn't remove the possibility of someone receiving those coins through a P2P trade on a decentralized platform.

Is there any point in confiscating the funds in a wallet which is basically not the scammers but it belongs to someone who just bought those coins and gave scammers money? No, and even though one can find out the scammer if they have used an account to receive funds in a p2p trade, but that can only be possible if the person who has received the coins looks at the transaction and find out that the funds they received were from a tagged address and the coins were stolen, but if the person doesn't do that and then sends the funds forward again, it is that other person who could get framed instead.

[goldkingcoiner]

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.

Bitcoin is far more traceable than any other currency, especially fiat (which criminals prefer due to its anonimity). So yes, it can be traced eventually to the person. Especially because nowadays, purchases, especially large ones, are extremely regulated. You want to buy a house/car? Then you have to provide your identity and an explanation of where your money comes from.

Of course this does not count for illegal transactions like for weapons or drugs. But criminals will find it nearly impossible to hide the traces. And even if they did, they would have no explanation for where the money comes from because the Blockchain is public and can be traced to verify whether their explanation is false or not.

So really, it is a better currency than fiat.

Privacy is not the same as anonimity.

[Plutomanian]

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.

Bitcoin translucence literally means that Bitcoin transactions does leaves or portray a permanent pathway in the market. Also on the records talking about scammers is good in other to create awareness about how these scammers dominate the market and how they're able to lure investors who happen to be their preys and scammed them, scammers Identity can be extensive especially when we're taking it upon ourselves to fish them out after suffering severe losses in the market.

We all know and it's now a common knowledge that Bitcoin transactions is irreversible and catching these scammers doesn't mean your Bitcoin will come back because who knows what they would have done with the money been scammed especially when it's past months or even a year? That's one of the good reasons why everyone is advised and directed to deal with people you know in real life because online is more risky than we could possibly think of. Besides when one have trigger the confirm or send button, there's absolutely nothing like undo button because that's just how the market operates.

[Peanutswar]

Basically still all of the transactions can be tracked with the use of the blockchain and just the role of the centralized exchange is the convenience for the people to use their platform to earn in the missions, yields fast conversion of your current asset into other crypto token and also convert into fiat currency. Now if ever the bitcoin becomes a demand and use in a daily basis there is a limited number of supply only possible the price rise up again also  there is a possibility of widely adaptation now into a different establishments and businesses.
But basically its just an alternative if you dont want to pay in cash or using a bank but still your money are still at risk because you hodls your coins and its your responsibility how to handle this. One mistake and get compromised your funds will be vanished and it becomes part of your regrets.