I feel like there is a lot of misunderstanding about what KYC is and why its good or bad, and why people seem to underestimate the danger of it.
KYC only makes sense for large entities and conventional finance and fiat, state actors, and proprietary blockchains. Bitcoin is inherently illegalism. If you ever studied Agorist theory or Anarchist theory, you would see that bitcoin is intentionally meant to be a outlaw tool. It's a opt out clause to oppressive governments. Repeatedly trying to sanitize it is a threat to it's entire purpose. "If you've done nothing wrong you have nothing to fear"
To take a step back and to understand what KYC is we need to understand what the NDAA clause in America is, what Counter Finance Terrorism and Anti Money Laundering laws and the Patriot act are, what FinCen is what FATF is and what American security and commodity laws are. To put it bluntly the US government want's a global panopticon. The NSA was proven to be guilty of breaking the constitution with unwarranted mass wire tapping.
Take another step back; Have you ever read the Terms of Service to all the crypto exchanges. I have, I have read every major exchange's ToS, including Bitmex. They all say roughly the same thing: "We have the right to suspend you, seize your money, and report you to respective authorities if we think you committed fraud, negligence, stolen funds, committed a crime, etc, etc"
On a surface level this all seems fine. On a surface level if we believe in the goodness of the government we would give it the benefit of the doubt because we wrongly trust democratic countries. That's your first mistake. You look at these laws through the framework of liberal democracies, and not the actual laws and behavior of the many repressive highly corrupt developing nations in the world, and the many atrocities and legal overreaches of European countries in the not far past. And that's not even considering the crimes that the United States has committed underneath the Patriot Act.
I personally feel that the Security and Commodities laws of the united states are unjust, banning retail from crypto and forex leverage trading is unjust, and against the spirit of bitcoin. The UK is outright banning it, again very unjust. Many states want to ban crypto trading all together, Iran is threatening it, again unjust. It's a game of incrementalism. How many times will you all defend a states decision to control your lives? How bad does it have to be? It will be much worse in non democratic countries, much more oppressive. I have no respect for such countries, and encourage people to give crypto technology to those people in those countries so they can rebel. It is the moral thing to do.
One of the biggest oversights of people who defend KYC, is the concept of incrementalism. If you pay attention to what China is doing with the social credit score, it is hyper totalitarian. That is the direction that the elite in China and America want to take the world, minority report style surveillance, using the blockchain as a weapon, being able to remotely unbank you, suspend your political, legal, and traveling rights, subject you, detain you, deny you medical care, and politically oppress you based on the data they collect about your finances. So to hell with law abiding tax paying Americans and Europeans. It's a first world privilege that you could lose rapidly. There can easily come a time where you need untracked unreported bitcoin to escape. But so many are eager to turn over the control to state backed actors like Brian Armstrong and Wallstreet backed crypto, to make this all entirely in their control, so they can continue to deny you services, to control, to unbank you. Which is largely the aim of Libra and Facebook. And guess what. Andreas Antonopoulos agrees with me.
It literally is Minority Report or 1984 in an unironic unhyperbolic sense. If you understand what a cashless society entails, what a repressive government is capable of, if you had a heavy academic background in history in political economy, if you understood what the rammifications of smart contract kyc based proprietary wallets like ciphertrace is promoting would be, if you understood what the NSA has done, with total global surveillance and wire tapping and meta data.
Could you imagine if Hitler had the meta data collection abilities of the NSA? He manually murdered people without the internet without the ability to track people with metadata, satellites, and phones, and immutable ledger based kyc. Do you understand how deadly a immutable irreftuable fraud proof KYC identity database is?
The greatest protection we have against tyrannical governments, is the concept of doubt, of anonymity, of asymmetrical lack of proof and hidden information from governments. When governments have omnipotent knowledge and surveillance of their subjects, they have omnipotent power. There exist such evil in the heart of men, there will always be a certain percentage of men who want to rule over others as absolute tyrants, and they always will if allowed, if given the tools.
We need a decentralized DNS, a decentralized internet, a decentralized internet dependent bitcoin blockchain on meshnets and satellites, decentralized order matching and trade settlement, distributed servers and internet infrastructure that does not go through state level internet grid that can handle the grid going down in war, etc our freedom depends upon it.
