U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry • Hacker News Board

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#131

Post by EGreg » Mon, Aug 09, 2021, 3:19 PM UTC

woodruffw wrote: post #124

EGreg wrote: post #113

Earlier quoted context omitted.

Please read what I am actually writing. I will try a different format. Perhaps you can respond POINT BY POINT to show that you have read it and have a substantive argument about it, rather than about your personal feelings about what a name du jour should mean: 1. End-to-end encrypted communication opens the barn door, you can conceal any anonymous cryptocurrency transactions in there, as well as darknets, smart cont…

I’m not going to do that, because I’m not going to spend any particular amount of time or effort defending a position that’s self evident among actual cryptographers. Money laundering is not free speech, and supporting E2EE does not somehow magically mean that I have to support or be okay with burning coal so that people can crack hashes. If you want to argue about cryptography itself, I suggest finding someone who’s…

Well, at least I was able to get you to tap out instantly. Okay.

Please understand, your strawman is very shallow and doesn't address the core issues at all. Yes, we all know that money laundering is not free speech. AND?

Besides money laundering, end-to-end encryption enables:

  Terrorists and criminals coordinating violent activities
  Planning shadowy Silk Road type sales and arrangements
  Violating copyright and robbing the RIAA and MPAA of profits
  Posting child pornography
  Enabling sex trafficking
  and much more

Tons of these things are arguably far more dangerous than money laundering. The fact that they are NOT money laundering, doesn't mean we should just ignore the fact that end-to-end encryption and allowing people to "self-host" their own peer to peer software, is dangerous to law and order.

On the other hand, if we don't have the ability to do "small things" anonymously, like pay for food and shelter with cash, our societies will become more centralized and authoritarian, as we have seen with the social credit system, crackdown on religious activity throughout China, and the coming central bank digital currencies across all countries. The FATF actions will make it a global regime, and the deplatforming and social credit systems may become the norm depending on how the geopolitical players like USA and China leverage these global organizations.

PS: I am probably more vocal against proof-of-work than you are. See my public statements in ArsTechnica, BBC, Newsweek: https://arstechnica.com/information-technology/2018/03/there...: Magarshak went on to note that he has long criticized what he says is an "arms race to waste electricity to solve hashes." Such arms races are created by currency mining based on what's known as "proof of work" computing.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#132

Post by lern_too_spel » Mon, Aug 09, 2021, 3:19 PM UTC

starkd wrote: post #114

woodruffw wrote: post #89

Earlier quoted context omitted.

> There seems to be a naive belief that it can never happen here, just because it never has. I’m sorry, but is the argument here that cryptocurrencies will somehow be instrumental in preventing the rise of fascism? Because that’s what the quote is from, although the chief motivator in the novel is independent journalism, not internet funny money.

Well, they are instrumental in oppressive governments like Iran and Venezuela. The whole objective behind cryptocurrency is a digital cash. If you are unconcerned about it happening in US, I don't know what basis you have for that, other than it has never has. It could happen here just as easily. And faster than you think. And corrupt governments are not known for being quick to give rights back.

If you're worried that this legislation makes cryptocurrencies unable to fight government oppression, they were never able to fight government oppression to begin with.

If you still think they can fight government oppression, and if you believe government oppression is the reason for cryptocurrencies, there is nothing to worry about for this legislation.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#133

Post by woodruffw » Mon, Aug 09, 2021, 3:21 PM UTC

starkd wrote: post #114

woodruffw wrote: post #89

Earlier quoted context omitted.

> There seems to be a naive belief that it can never happen here, just because it never has. I’m sorry, but is the argument here that cryptocurrencies will somehow be instrumental in preventing the rise of fascism? Because that’s what the quote is from, although the chief motivator in the novel is independent journalism, not internet funny money.

Well, they are instrumental in oppressive governments like Iran and Venezuela. The whole objective behind cryptocurrency is a digital cash. If you are unconcerned about it happening in US, I don't know what basis you have for that, other than it has never has. It could happen here just as easily. And faster than you think. And corrupt governments are not known for being quick to give rights back.

But this is a different scenario: Iran and Venezuela were ostensibly repressive long before cryptocurrencies became viable mechanisms for exfiltrating wealth from either country. And besides, the introduction of cryptocurrencies doesn’t seem to have helped much in terms of making either country less repressive (much less eliminating basic privation in either).

To whit: what bulwark, precisely, are cryptocurrencies providing here?

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#134

Post by spaginal » Mon, Aug 09, 2021, 3:22 PM UTC

JumpCrisscross wrote: post #76

starkd wrote: post #69

Earlier quoted context omitted.

But the power and potential disruption of cryptocurrency is the anonymity. It's the benefits of cash brought to the digital world. I understand the dangers of the criminal element, but underground economies benefit oppressed people when governments turn tyrannical. If you're response to that is only that "it can't happen here", I don't know what to say. They can and do happen faster than anyone realizes. And they are…

> underground economies benefit oppressed people when governments turn tyrannical They also benefit the rich and powerful by enabling tax evasion and graft. Pyongyang, Tehran and Caracas make regular use of illicit trade and money laundering to facilitate upward wealth transfer. Yours is a legitimate point. It's an argument for curtailing the power of law and government. That's fine. We can debate that. But until Ame…

Cash and anonymous digital transactions also benefit the lower end as well.

Many poor families, including immigrants, get through life daily with an underground, cash only, economy.

It's not just a tool of the rich and wealthy.

Taxation on assets and income is THEFT.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#135

Post by SpicyLemonZest » Mon, Aug 09, 2021, 3:22 PM UTC

nprz wrote: post #106

JumpCrisscross wrote: post #31

I've been following this discussion in Washington and on Hacker News. I'm moderately anti-crypto--I don't buy the pitch but am open to being wrong and believe folks should be free to do what they want with it. I've also been struck by the proliferation of bank-like services without bank-like obligations. This stretches from fractional-reserve and maturity-transforming services like Tether to exchanges/dealers like Bi…

The bill expands the definition of broker to include anyone who facilities the transfer of crypto: miners, wallet providers, smart contract devs. These people are now made responsible for collecting transaction records for the IRS. That's just not how cryptocurrency works. Miners, smart contract devs, don't know who is transacting with who. It's effectively a ban on cryptocurrency.

I don't want to sound unsympathetic, because the situation really does suck for cryptocurrency devs, but it's not obvious to me that they should get to unilaterally decide how it works. The bill defines a broker as "any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person", and it seems reasonable that anyone who's transferring assets on behalf of someone else should know who that someone else is.

More broadly, if you've ever wondered how industries can go to Congress with a straight face and argue for crazy regulatory exemptions, this is what it feels like from the other side. I like crypto devs a lot more than I like, say, Exxon, but I still don't think we should have carveouts just to protect their business model.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#136

Post by nine_k » Mon, Aug 09, 2021, 3:24 PM UTC

JumpCrisscross wrote: post #102

woah wrote: post #95

Earlier quoted context omitted.

Your comment is completely unrelated to the matter at hand, and the article. The controversy here is about this law potentially placing reporting obligations on software developers who never have any custody of client funds. Sort of like requiring the developers of Excel to report on users of Excel using it to manage their money. > I've also been struck by the proliferation of bank-like services without bank-like obl…

> reporting obligations on software developers who never have any custody of client funds Custody doesn't haven an agreed-upon definition when it comes to crypto. That's the nut of the challenge. If we want reporting, someone who, in a traditional setting, would not have had to report, will when it comes to cryptocurrencies. > these centralized services that have some involvement with crypto already comply with a lar…

Could you please share an example or two where custody of funds is not clearly defined?

I'm not in finance, and to me this sounds weird. Unclear custody looks to me as an obvious opportunity to plainly steal someone's funds.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#137

Post by NateEag » Mon, Aug 09, 2021, 3:30 PM UTC

mcherm wrote: post #49

NateEag wrote: post #32

Earlier quoted context omitted.

How does being required to track data about taxation challenge the existence of the builders you mention? I can see how it might for the companies - people who use crypto for tax and authority avoidance seem likely to stop using any service that complies with this law. I don't see how this bill threatens any human's existence.

> I don't see how this bill threatens any human's existence. It doesn't. > How does being required to track data about taxation challenge the existence of the builders you mention? Suppose US law says that it is illegal to "mine" a block of bitcoin unless you keep records of the true name, address, and social security number of every person whose transaction occurs within that block and provide that information to US…

Thanks for explaining your perspective.

I guess I was too elliptical, because I mostly already understood what you've explained here - I thought the OP was making way too strong a claim.

Instead of just saying that, I asked why he thought the builders in question had their existence threatened.

The builders in question may not be able to legally build the systems they want to in the US, but that's really not threatening their existence.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#138

Post by dcolkitt » Mon, Aug 09, 2021, 3:34 PM UTC

frankbreetz wrote: post #109

dcolkitt wrote: post #85

Earlier quoted context omitted.

Cryptocurrency is extremely resilient to government action. Regardless of what happens with this legislation, I can virtually guarantee you that crypto will still exist in a decade. Obviously the market agrees, as the major coins and tokens have reached 3 month highs while this legislation was unfolding. The reason I oppose hamfisted laws in crypto is the same reason I oppose the War on Drugs. Is the government even…

Drug laws caused the average person to be terrified of drugs. If the average person becomes as scared of crypto as they are of drugs, crypto may exist, it won't be a mainstream product. There are no vc funded cocaine or heroine companies.

Except crypto is global, and even easier to move across borders than drugs. Despite the government's sincerest hopes, American laws don't extend to foreign countries.

So, yes there will still be tons of VC funded crypto startups, they'll just be based in Malta or Israel or Singapore. And even in the most draconian enforcement regime, the US government will be incapable of stopping even 1% of American citizens who choose to interact with these protocols. VPNs are ubiquitous, highly secure and dirt cheap.

It is possible to nearly completely stamp out crypto usage in a single country, just as it is possible to nearly completely stamp out drug usage in a single country. But it requires CCP-level authoritarianism. Neither US voters nor the US judiciary has the stomach for that. You'd have to be extremely anti-crypto to think it justifies the creation of a Chinese-style great firewall and the associated surveillance state.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#139

Post by verdverm » Mon, Aug 09, 2021, 3:34 PM UTC

frankbreetz wrote: post #109

dcolkitt wrote: post #85

Earlier quoted context omitted.

Cryptocurrency is extremely resilient to government action. Regardless of what happens with this legislation, I can virtually guarantee you that crypto will still exist in a decade. Obviously the market agrees, as the major coins and tokens have reached 3 month highs while this legislation was unfolding. The reason I oppose hamfisted laws in crypto is the same reason I oppose the War on Drugs. Is the government even…

Drug laws caused the average person to be terrified of drugs. If the average person becomes as scared of crypto as they are of drugs, crypto may exist, it won't be a mainstream product. There are no vc funded cocaine or heroine companies.

In jest, I'd point out Purdue and the Sacklers

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#140

Post by SpicyLemonZest » Mon, Aug 09, 2021, 3:37 PM UTC

nine_k wrote: post #136

JumpCrisscross wrote: post #102

Earlier quoted context omitted.

> reporting obligations on software developers who never have any custody of client funds Custody doesn't haven an agreed-upon definition when it comes to crypto. That's the nut of the challenge. If we want reporting, someone who, in a traditional setting, would not have had to report, will when it comes to cryptocurrencies. > these centralized services that have some involvement with crypto already comply with a lar…

Could you please share an example or two where custody of funds is not clearly defined? I'm not in finance, and to me this sounds weird. Unclear custody looks to me as an obvious opportunity to plainly steal someone's funds.

The basic example most others are built on is a locked smart contract, where none of the participants can control the funds until the smart contract is programmed to release them. Most crypto developers conceptualize this scenario as the smart contract having custody (you can only steal the money if you trick the smart contract into giving it to you), but the smart contract can't exactly report things to the IRS.