Topic: The crypto compliance lie: Sacrificing privacy does not make us safer - page 2. (Read 484 times)

I remember when discussing bitcoin with a group of people after an event, one whom I discovered was a lawyer after I finished explaining my take on bitcoin said: "So, is this all you criminals do?" I avoided any debate as there was clearly nothing to say to somebody who was firmly believing in his opinions.
I see this is happening at a greater level now as bitcoin gets institutionalized : they want every bitcoin to be vetted and treated accordingly. As I said it many times already, we have excellent privacy tools at our disposal but they will keep on working only in the bitcoin realm. Don't expect to preserve your privacy when connecting your bitcoin to any of those regulated entities. We are at war, isn't it clear?

It sounds like you are using an exchange account to store your coins, which is terrible for both your privacy and security. Just because you haven't experienced any hacks, scams, frozen coins, etc., yet doesn't mean this will always be the case.

Why? Why do we need governments and banks to tell us how we can use our money? If that's what you want, then you don't need bitcoin and you don't need a blockchain. A centralized database and electronic fiat is more than adequate for a currency which is controlled and regulated by third parties. The whole point of bitcoin is to move away from this system.

Exactly. So why are people so keen to hand it over to governments to turn in to little more than tokenized fiat?

What kind of regulation do you mean? If you mean governments should have an ability to spy on every transaction you make, it would not make bitcoin mainstream. It will have the exact opposite effect. Never in the history of humanity could governments control and censor people's transactions, never could they identify participants of exchanges and it was an absolutely natural situation. The absence of surveillance didn't prevent gold coins from being considered mainstream. Governments can control your transactions only because they created a system of digital payments and forced you to use it, they have full control over it while you have nothing: no right to free speech, no right to privacy, no right to control your own money! It is ridiculous, but now we have bitcoin that fixes this injustice and is able to give us a way to opt out from that evil system of total surveillance.

I have expected that the governments will try to make the crypto world as transparent as possible,but I don't expect this to happen soon.
The majority of crypto users,who are in the crypto markets just to make some profits will most likely abide by the rules and pay their taxes.
A minority of crypto libertarians,who sincerely hate paying taxes and giving their privacy away will jump into monero and use the dark non-custodial exchanged.
I agree that sacrificing privacy does not make us safer.Last year,there was a major data leak in my country's tax revenue agency and the personal data of millions of people was revealed online.
I simply don't trust my government,when it comes to keeping my personal data safe.

What's the issue with the law-abiding group of people? We indeed have a two groups of people here in this forum - one, who wish to comply with the KYC request and pay taxes and two, who wish to remain anonymous. But if we really want bitcoin to become a new world currency, regulation is the only way towards it. Bitcoin will never be able to become mainstream if we resist regulation, in that case, it will stay only as a parallel currency system like it is today! There will definitely be a few crypto-friendly countries, but majority of the world governments will become more hostile against it!

I actually use a custodial wallet as we don't have a choice in our country for us to convert BTC to fiat money. It finds no safe for me as it requires KYC and they have control of it and having a 2FA is the only thing that helps me to add the security to my fund inside. I'm not sure if that is enough but ever since I don't encounter any troubles, wallet issue, or worse of hacking incidents that is why I'm also confident enough that this third party holds their promises to keep everything secured.

Governments always kick against anything they do not fully control, be it user data or money flow. Reason why tensions rise between nations due to alleged data theft, but those countries would have no problem spying on other countries.

Bitcoin presents a conundrum for certain governments as it cannot be directly regulated, this means money chain can go untracked, but the more bitcoiners interact with centralized services the more Bitcoin falls under the regulatory radar.
Nowadays more Bitcoin users willingly give up their privacy and anonymity, so there is very little economic implication for nations that adopt a heavy handed approach to controlling bitcoin, as users are already submitting themselves to custodial services. If more Bitcoin users would value their privacy nations would run the risk of becoming unwelcoming to the growing network and potentially being left behind as digital finance gains more adoption.

In this light, the most important question is - will decentralized exchanges be resilient enough to survive the attack from governments, in attempt to make crypto users only use centralized exchanges? Because that would mean that they will have control over large part of crypto ecosystem. As I understand, decentralized exchanges rely on p2p banking transfers, and those things can be monitored any analyzed, potentially leading to blocking of crypto-related transactions.


A criminal is simply someone who commits a crime. If governments will declare unregulated use of Bitcoin a crime, then many of us will be criminals. Right now it's not a crime in most jurisdictions, so we are not criminals. Being a criminal does not equate to being immoral, for example people who stand up to tyranny are often prosecuted as criminals by their governments.

I think you need to read this:
 ’FinCEN Files” demonstrate that even large banks that collect and report vast troves of suspicious transactions are not doing enough to unbank the bad guys’.

Are all the money in the banks legal? Are all politicians means of generating fiats all legal? Are people working in bank not knowing cyber criminals and work with them? So, the governments are wrong, because among them are money launderers, and use power to make it successful. That is the truth in my opinion.

So, by default, it ought not to be like that. Anyone not seen involved in criminal activities are not criminals, the kyc used are biased. Governments are trying to comprmize privacy totally. I made a topic in 'politics and society' Governments compromising privacy, it is about COJ againsting end-to-end encryption, want social media and other sites to comply with their laws in a way they will be able to access peoples data, and still yet saying they are protecting privacy, is that right. Governments are only trying to make the world to lack privacy which many people care for.

And, let us know that with the so called kyc that some people got verified on one site or the other, let them become the victim of scammers. Governments are not using better approach at all, bitcoin have done everythingthing needed in a way the bloackhain is transparent, why not governments emmulating that.

This was always the natural next step.  First they tried to dismiss it, ignore it, belittle it.  That didn't work.  Now they're doing this.

All you have to do is weigh up the pros and cons.  What can these custodial services offer you?  Is it vital to your needs?  If it's not, keep hold of your own coins.  Don't hand them over to people who want your life story and in return they'll tell you what you can and can't do with the wealth you've just given to them.  It should be a no-brainer.  
 

I don't disagree, but if this is the direction your country's government is heading in, then it is probably time to seriously consider moving country.

All the more reason to try to move away from fiat banking system as much as possible and use bitcoin instead. All the more reason to stop trusting third parties (be they fiat banks or crypto exchanges/services). All the more reason to hold your own keys at all times. All the more reason to trade peer-to-peer.

I don't deny that this is a real issue, but if everyone used bitcoin the way it was intended - without trusting third parties to hold coins on your behalf, or allowing third parties to decide to where and to whom you can and cannot send your coins - then it wouldn't be an issue at all. There would be no centralized exchanges to hand personal information and transaction histories over to the government, there would be no custodial wallets which could have their coins frozen or confiscated, there would be no centralized services which could be pursued by the government. They can't shut down open source software like Bitcoin Core and Bisq.

Based on your definition, which is the proper one. Unfortunately, that is not the definition which guides the actions of governments. It seems, by default, anybody is criminal until proven otherwise. For instance, even if there is no reason to freeze your bank account, banks would freeze it all of a sudden until you provide all the documents that would prove that every penny is legally obtained. Sites would suddenly lock withdrawal for no apparent reason at all and force you to pass KYC. These uncalled drastic actions are proper for law violators only.

Correction: Giving in to their demands and compromising on your privacy is not a prerequisite for being considered "law abiding", and similarly, wanting to maintain your privacy does not automatically make you a criminal. I have never done anything illegal with my bitcoin or other cryptocurrencies, and yet, I refuse to use centralized exchanges, refuse to complete KYC anywhere, refuse to allow third parties to dictate what I can and cannot do with my bitcoin, and refuse to allow governments to spy on my financial activities. None of that makes me a criminal.

They might as well just straight up say that they refuse to acknowledge DeFi's, and would with all their power try to remove the Decentralization attribute of coins that has them, not for the sakes of the people, but for their own greedy sakes. Still, I doubt this could be fully realized, at least not in the next few years. Not to mention that there are ways to go around with it, but as you said, this basically splits us, users, to law-abiding ones, and non-abiding ones.

Still, I'd see more of a problem if the merchants were the ones who actually asked for KYC verified wallets, and not exchanges. There's still a few ways here and there to buy crypto outside of exchanges after all, but once merchants ask for verified wallets, the usage of cryptocurrency as currency plummets, or rather really just disappears, after all, its main usage is as a currency.

If your "wallet" requires you to perform KYC then it is not a wallet at all - it is a third party custodial service. You should stop using it immediately and move your coins to a real wallet in which you control the private keys.

What? Bitcoin Core is a wallet and does not require KYC. How could bitcoin even function if it was banned?

There are dozens of ways to buy, sell, and use bitcoin without using centralized exchanges which enforce KYC. I have never used a centralized exchange and never completed KYC, and yet I would wager that I use bitcoin as a currency more often than 99% of this forum.

I'm not convinced taxation is the reason behind this. They amount of tax to be claimed from the small number of users actively trading or spending bitcoin is relatively small. If governments wanted to increase tax revenues, they could get a much better return on their time by closing some of the loopholes that multinational companies and billionaires use to store all their wealth in tax havens. This is about mass surveillance and population control.

Yes that's right.

 I have high hopes for Monero.  Atomic swaps (XMR - BTC - XMR).  

https://icryptonode.com/blogs/news/bitcoin-to-monero-atomic-swaps-how-this-enables-private-bitcoin-transactions

Anonymity and privacy is a very difficult task in today's world.  Governments and corporations are doing everything to make the world transparent.  However, governments and corporations themselves do not want to be transparent.

even now, to convert our crypto to fiat, we need to go thru local exchanges or remittances that already asked our KYC docs. unless you are using p2p platforms that may not ask for kyc. but even the binance p2p, you need to submit kyc docs as you need to submit details of your bank account, etc and also to protect the users of that platform.
so actually, we are not very far from totally submitting ourselves to this kyc thing. it is not the case that we can use our crypto directly to the things or services that we want to get. most of the time, we still need to convert our crypto to USD or other fiat to actually use it!

But in the midst of all this , aren't our privacies already sacrificed now ? The government doesn't even allow us to use wallets without doing the KYC first which is connected to our bank accounts, our number, our alternative bank accounts if any then the passport of the individual which might easily track him down even if he tried opening an overseas account.
If wallets are not asking users for KYC those wallets are right away banned and then people have to look for a new alternative which is mostly SegWit wallet like : samourai but then again if they do want to sell their coins they would have to do this through a trusted exchange that will actually ask the users for KYC again !

We are already in this web.
Government is supporting it because they know that it's better to play like the friend and then see what's going on inside the wallets of millions of people and then implement Taxation to gain money.

It's a dark dark side my friend.... unfortunate

God damn it, it's one of my deepest fears getting confirmed little by little. I keep saying it: it's exactly why they are suddenly starting to "support" cryptocurrencies! They found a way around the decentralization: the owner of a non-KYC-verified address? Suspect.

There will probably come a time when things will split up into two sides, as you have mentioned: the "law-abiding" users and the underground ones trying their best not to be caught trying to have digital intimacy. Unfortunately, we have too many crypto users that now don't care about their privacy anymore. If >5 years ago these news would've turned into a crypto revolt, today people don't care as long as their wallets grow. But they knew it, and they just know the more people join crypto blockchains, the more people they can easily monitor.

Guess there'll always be some ways around their laws as well, such as moving to crypto AND privacy friendly countries. Interesting times coming soon for sure.

From the tweets below, it is clear that the governments will try their best to compromise privacy, there could be a time when the governments will use custodial means of trading bitcoin against bitcoin users that prefers privacy in such a way the governments will not let any transaction to occur between custodial exchanges and bitcoin noncustodial wallets that are not verified. Now, many people do not even know there is anything called private key not to talk of seed phrase, these are the people that are getting common that are using bitcoin. The governments will make sure only people that abide to their laws and regulations will be able to transfer bitcoin, and this will only be through custodial services. Thereby, if the blockchain is regarded as the greychain, it will be like the blockchain is divided into two parts:

1. The lightchain (the part of blockchain that will support custodial services)
2. Darkchain (the part that will support noncustodial means)

Governments will be trying to compromise graychain (blockchain now) in a way they will divide it into two (lightchain and the darkchain), thereby making more people in the bitcoin world to be submissive to their laws and manipulations.

          

In the last month, we’ve seen the United States Federal Reserve come after BitMEX for failing to identify customers, crypto intelligence firm CipherTrace report that most crypto exchanges are not collecting enough user info, and the so-called “FinCEN Files” demonstrate that even large banks that collect and report vast troves of suspicious transactions are not doing enough to unbank the bad guys. Suffice to say, it’s a great time to be alive for compliance hardliners and a rough patch for privacy advocates, aside from a healthy recent boost in the price of Monero (XMR).

Stepping back and looking at the larger trend, many in the crypto community are now imagining a world with two “Bitcoin blockchains” — or perhaps, two distinct networks of various blockchains. The first is a blessed white blockchain, or “lightchain,” akin to a friendly neighborhood where everybody knows each other’s name; the other is a sinister “darkchain” full of drug traffickers, pimps and terrorists (as far as we know).

Privacy advocates fear that because Know Your Customer rules are being placed on exchanges that custody crypto and that banks and institutional wealth will make crypto mainstream via similar custodial solutions, only those who custody crypto with such institutions will be allowed onto the lovely lightchains. These chains will lie within the lofty ivory pillars of Wall Street and beneath the halls of wealth and power, while the vast unwashed masses who prefer to hold and control their own crypto will be forced into a crypto ghetto on the darkchain.

The lightchain-vs.-darkchain dichotomy is counterproductive, and a healthy graychain will produce more valuable crypto assets like Bitcoin.

https://cointelegraph.com/news/the-crypto-compliance-lie-sacrificing-privacy-does-not-make-us-safer
https://mobile.twitter.com/jchervinsky/status/1315758160687366155?s=20