It is possible to store short messages on the public Bitcoin blockchain. If somebody were to publish extremely sensitive official secrets on the blockchain, would the government be forced to attack the whole network?
How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
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Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
#22In practice, it appears this approach would make most BTC transaction validation illegal in the US in the common case (exceptional cases would still be authorized; specific users could have their public key allow-listed and some due-diligence would then occur).
This wouldn't end BTC; it would simply constrain how much American citizens could be involved in the mining process (and, practically, basically cede ownership of the network mostly to Chinese nationals IIUC current distribution of mining hardware ownership).
Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
#23> All cryptocurrency assets, not just Bitcoin, are zero sum. So every dollar “made” in cryptocurrency was simply provided by someone else. Can't you say that about any other asset? If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. But that's not how we determine value. It's positive sum because the buyer attributes a value higher than he had paid for it, otherw…
> If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. No transaction between rational individuals is ever zero-sum. If Bob values a house at $300,000 and Alice values the house at $300,000, the house will __never__ be sold. Because by the time transaction fees come about, Bob would have lost money in the transaction. In reality, Bob values the house at $250,000,…
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Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
#24How would this prevent scenarios such as refurbishing a nuclear powered Russian icebreaker to sit in international waters mining Bitcoin?
If a rogue actor beyond the control of state governments gets its hand on nuclear-powered ships, we have bigger problems than Bitcoin mining.
Mine was an example. There are other examples. The long arms of governments don't reach everywhere.
Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
#25> All cryptocurrency assets, not just Bitcoin, are zero sum. So every dollar “made” in cryptocurrency was simply provided by someone else. Can't you say that about any other asset? If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. But that's not how we determine value. It's positive sum because the buyer attributes a value higher than he had paid for it, otherw…
> If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. No transaction between rational individuals is ever zero-sum. If Bob values a house at $300,000 and Alice values the house at $300,000, the house will __never__ be sold. Because by the time transaction fees come about, Bob would have lost money in the transaction. In reality, Bob values the house at $250,000,…
I do not think home buying is exactly this. It's much emotional and sometimes both parties involved are green - this may describe a transaction between two veteran RE investors.
Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
#26The reason why I believe mining isn't being labeled as money transmission is because the miners never take custody of any bitcoin, they collect/handle transactions themselves, but these transactions are p2p, the bitcoin do not go into the hands or control of a money transmitter.
Where the author is correct is that the miners are the chosen ones for writing to the central ledger of bitcoin, but writing to a ledger including transactions, is not the definition of money transmission- the miner would have to take custody - which they do not.
Now where money transmission I believe is running rampant is any smart contract built on ethereum, like uniswap, that is taking custody of any token and holding that token- all of them are violating money transmission laws.
Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
#27This is an interesting exercise in legal argumentation, but it assumes that the US Government wants to push miners out of the US. It's not that they can't, it's that they don't want to.
Outlawing mining in the US would not disable cryptocurrency networks, because miners could still operate in other jurisdictions (and covertly in the US). It might cause a panic and disrupt some American-based crypto companies, but cryptocurrencies have already been shown to withstand panics and business upheavals. Crashing the price of Bitcoin doesn't actually reduce its usefulness to cybercriminals, as long as the market is still liquid.
Worse, banning US mining would ensure that no mining rewards can be taxed by the IRS, excluding the US from the growing cash stream coming from blockchain rewards.
Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
#28> All cryptocurrency assets, not just Bitcoin, are zero sum. So every dollar “made” in cryptocurrency was simply provided by someone else. Can't you say that about any other asset? If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. But that's not how we determine value. It's positive sum because the buyer attributes a value higher than he had paid for it, otherw…
Funny, how is money put into circulation? A big portion is being paid directly from the government to their employees. They need houses, food etc, so they spend it. That gets distributed to all the people from those companies and so on. Through taxes we return a bit to the government. So that they don't need to keep printing new money ALL the time.
And that is exactly the same for crypto, except there is no country/government behind but only a ledger. The money is being transferred for doing work, mining. And that is distributed again.
Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
#29Of course bitcoin is about transmitting money, almost by definition. I can't believe it has gone this far without regulation. If the argument is that is just an asset (which I believe was strongly argued against by bitcoin proponents, at least in early days), then what kind of asset is it? It has absolutely no value beyond it's monetary value.
Maybe it’s a new kind of asset. A consensus asset, in which the value lies in the consensus itself and does not require any other utility?
(I’m speculating but this is how I interpret a lot of the defenses of Bitcoin I have heard.)
Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
#30> All cryptocurrency assets, not just Bitcoin, are zero sum. So every dollar “made” in cryptocurrency was simply provided by someone else. Can't you say that about any other asset? If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. But that's not how we determine value. It's positive sum because the buyer attributes a value higher than he had paid for it, otherw…
> If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. No transaction between rational individuals is ever zero-sum. If Bob values a house at $300,000 and Alice values the house at $300,000, the house will __never__ be sold. Because by the time transaction fees come about, Bob would have lost money in the transaction. In reality, Bob values the house at $250,000,…
How do you distinguish between true value creation and simple asset inflation? Low interest rates cause soaring asset prices, which can create an illusion of "value creation", but I don't see it actually increasing the value much.