Topic: WHY VERIFICATION IS IMPORTANT TO CRYPTO USERS AND INVESTORS (Read 379 times)

KYC is for benefit of exchanges and they do it mainly because governments want them to do KYC against customers.

Why KYC is extremely dangerous – and useless

KYC on centralized exchanges can help big users if they want to file lawsuits against scammers or trace hackers but those big scams or hacks don't usually happen. For most of users, small users KYC does almost not mean anything useful and helpful for them. They usually accept their small loss and move on.

Kyc as we may know doesn't have anything to play in bitcoin as you may calls it bitcoin ecosystem, from people already explained bitcoin doesn't request your data to be processed or even transferred to your wallet the issues of KYC plays in where we seems to have moved our fund to Centralized exchange were they require their clients to abide to their ToS causing people to pass through kyc in order to stop and monitor money laundering, with your details (KYC documents submitted) you would be traced for any illegal activity that was carried out within your deposit to their exchange platform. But if you don't want to associate yourself with kyc then you have to avoid centralized platform be it exchange or gambling site that often request for your details to enable you processed your transactions.

This is the only valid reason to pass KYC. If you want to have your Bitcoin gains turned into some $$ in your bank account, you'd better do it through a regulated exchange that is acceptable to deal with by banks and regulators. Because if you get a large enough sum through p2p trading or cash deposit - it's almost guaranteed that your bank will ask you about the source of your money and demand a proof, because in their eyes it's a high-risk behavior that is typical for illegal businesses or money laundering.

I think you don't get the point about the actual reason why most people in the cryptocurrency space never like the idea of KYC verification and it's we never understand the advantages but people are concerned about the disadvantages.
If the government cannot do something about the Big Brother tech company that's abusing the people's private information and also making billions every year through it there's no guarantee they will with ID verification information collected.
Until the government introduces a decentralized blockchain for private data storage people will never trust their private information with them.

Such a sad thing that the crypto people have to compromise when it comes to this kind of stuff, unless we really want to fight the government I guess can we really start becoming independent from them and not having to comply with their demands but the way I see it, I don't think that the crypto community wants to fight for that freedom the crypto offers in terms of anonymity because a lot of us just wants to make money out of it, make good until it lasts right?
Exactly but the problem of transaction fee is just too much for some people, imagine having to store your 100 USD worth of bitcoin and you have to sell it when the price are at its supposed peak and we all know that during this time, transaction fees are always going up because there's a lot of transactions going on and some wants to pay for the highest priority, now you with the 100 USD worth of bitcoin which has doubled want to sell because you're smart enough to know that it's good to take a profit now but when you see the transaction fees, you're probably with the original 100 USD or higher if you can wait for days to have your transaction processed. Centralized platform like Binance helps with that conversion so you can quickly go to a different stablecoin and sell that stablecoin in P2P marketplace.

(1)Projects need to have faces...yes, they need to have recognized people, yes, but that does not prevent fraud.
(2) once again, read the above, yes and no, the crypto ecosystem offers yes for those who want to stick to KYC and no, it is still possible, although the gap is closing more and more. It should be an option and obligation where legally applicable.
(3) we did not get here with bitcoin precisely by doing KYC to anyone, trust prevails over what bitcoin means and the trust that individuals have in bitcoin, it is the bridge that achieved that trust between individuals, not individuals in itself, woa it is curious.
(4)No, not really, it is something of all of the above, it is the architecture of bitcoin as a technology that has made trust grow, not individuals, is the trust of individuals for bitcoin.
(5), so, what? (6)... loading.

As with the practice of illegal money laundering transactions and the like, this is the basis for them to implement KYC,
and it is also a recommendation from the government that they still have control.

As is the case with the current Mixer Platform Service, which is the target of government operations to tackle illegal transactions that support crime.
But in the end, there is no more privacy.

The use of KYC as a Consumer Policy is for the benefit of the Exchange itself, and they do not only focus on one consumer, but several groups of consumers.
If using Consumer protection, individually consumers will be guaranteed, it will burden the Exchange.

Regarding consumer protection and policy, of course this is also related to SAFU,
does SAFU really provide a solution when assets are lost, and will asset replacement be done in full?

Verification into cryptocurrency is all about to prevent hackers, it about to know the difference between the real business people or the difference between customers and scammers, sometimes some people refused to showcase their identity because they doesn't want someone to know them, and sometimes the reason while KYC verification is been demanded is due to issues of you been sincere or not [trust] I believe that is what is the major reason while any platform that involves money do demand or request for a KYC, not only because of scammers but base on trust and been transparent in business.

The only reason I can say kyc verification is important in crypto is for global acceptance. The fact that kyc was introduced to cryptocurrency is not to benefit the crypto community or enhance the network. It is to satisfy the demand of the government authorities to be more crypto friendly.
A technology that is decentralized by nature does not need a centralized platform to flourish. Users can interact just fine without any issues, but this goes against the control mechanism of the authorities.
I highly doubt many crypto users are happy to go through the kyc process.

for me KYC does not give customers 'trust' in the service

regulated exchanges do NOT offer customers a insurance whereby if exchange went bankrupt, insolvent or charged, people can instantly be settled out and refunded.

the KYC is to police customers to stop certain customers doing suspicious things.

IF KYC was only used to sign people into a group insurance where they would get paid out within 14days of business insolvency. and KYC was only used for this consumer protection.. then great KYC would be a benefit

but exchanges do not use KYC for consumer protection. its used for consumer policing

hopefully one day regulators will start to care more about consumer protection, not consumer policing

Absolutely, your comprehensive explanation on the importance of verification in the cryptocurrency space is spot on. It addresses key concerns and highlights the crucial role verification plays in safeguarding users, ensuring regulatory compliance, fostering trust, managing risks, and enhancing user interaction within the Bitcoin ecosystem. Your response to the privacy concerns is thoughtful, emphasizing the importance of knowledge in navigating potential risks. This well-rounded perspective contributes significantly to the community's understanding of the necessity of verification processes. Well done!

The OP is a law-abiding citizen who grew up on the laws written by the state, which in turn implies strict control, which means infringement on the freedoms of his citizens. Bitcoin was created for other purposes—exactly the opposite. The position seems to be correct from the banking system's side. Then, in turn, it can be assumed that you will trust all centralized exchanges, and therefore, since everything is so convenient and the laws come from the idea of protecting the user, how do you leave your funds on the exchanges?
Are you ready to lose everything if the exchange wants to break down or just block your funds? Based on this, the more you provide your information, the more you become the most profitable target for various kinds of fraud.

KYC verification is only required when you use exchanges, services, or payments. But if you don't use your Bitcoin and only keep it for the long term, you don't need KYC verification because you keep the Bitcoin without being used for other things.

Bitcoin is decentralized where people don't have to reveal who owns the Bitcoin. And if you send Bitcoin from wallet to wallet, you also don't need to do KYC as long as it's not associated with a service provider.

But even if you use a service from a third party that requires KYC verification, that doesn't guarantee that your data will be safe, especially if you do the KYC online. So be careful if you want to do KYC and make sure that the service provider can provide security in keeping customer data even though it can't be 100% safe.

This is only applicable towards centralized exchanges and other platforms that are not decentralized at all.

I only appreciate about the low fees of CEXs in terms of trading fees and has instant transactions.

But what I do not like about centralized exchanges and other similar platforms is that we do not have the full custody of our funds.

Despite that they will do their best to protect our funds via multiple layers like 2FA, Google Authenticator, biometrics or retina scan, recovery email, etc., the control of the funds isn’t really ours as they have the power to hold and freeze our funds anytime they want.

KYC with exchanges was never a thing back in 2014 when I first started with crypto. It was when crypto gained popularity and attracted the governments attention and that is why many exchanges had to implement it. They say it’s to prevent money laundering but very small amounts are laundered thru crypto.

For years I used bitfinex, poloniex, bittrex, Bitmex and KYC was never an issue. These days there is pretty much no exchange except defi which is KYC free.

You're not talking about Bitcoin. You're talking about banks and the rest of the traditional financial institutions.

Bitcoin doesn't discriminate. It offers a public system that is free for all. No screening, no censorship, no favoritism, no prioritization, etc. Bitcoin doesn't suspect. It accepts transactions coming from anybody. It's a completely neutral tool. 

Verification doesn't seem to assure security, confidence, vitality, credibility. It doesn't cultivate an atmosphere of trustworthiness and transparency. On the contrary, it adds unnecessary risks. Asking and keeping people's personal information breeds lack of confidence, suspicion, and doubt. And the way these data are handled aren't transparent.

If you insist on these, we shouldn't have made Bitcoin in the first place.

Verification is important for miner to confirm whether the transaction is valid or not, but verification is completely useless when it's related with centralized site.

KYC can be faked, it can be edited, or it was someone else KYC. Let's say you KYC in many sites and there's a site suffer data breach, what do you think if there's a criminal use your identity?

This scenario is similar like you're ordered a pizza with pineapple topping in Italy, the employee will retire after they hear your request.

KYC is mentioned as a protective tool for cryptocurrency users against hackers and scammers but it fails to do that. In return, people who KYCed already lost their identity documents and they can still be scammed by projects, exchanges but there are worse things, their identity is leaked to those centralized exchanges and even can be leaked further. Dark markets will likely be destinations for those identity documents.

Why KYC is extremely dangerous – and useless

To protect their account in to avoid the hacker

I mean, you tried. Your post content is good if we compare it to other newbies, you could have done the formatting better.
Like you can use the (Bold) on the headings to make it look bold. And I like that you even added a conclusion to your post, helps in reading quicker.

And now coming to the topic, KYC is an attack against Crypto or especially Bitcoin. Bitcoin was meant to be decentralized. I am totally against KYC and verification, only thing that should have it is Banks. And we are not a Bank.