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The Slow Criminalization of Peer-To-Peer Transfers

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Re: The Slow Criminalization of Peer-To-Peer Transfers

#41

Post by wolco »

cgb223 wrote: post #36
isubkhankulov wrote: post #12

In all of these cases, the bitcoin vendors did not register on FinCEN's website. Registering is simple but by doing so the person/company is required to check ID's of their customers and make sure there is no money laundering involved. Including filing reports with the gov't for any suspicious activity and large cash transactions amongst other things.

How would one launder money with bitcoin? What would that look like?

Buy bitcoin using cash at local bitcoin atm. Put bitcoin in a mixer. Cash out bitcoin and declare the income.

Re: The Slow Criminalization of Peer-To-Peer Transfers

#42

Post by darawk »

dragonwriter wrote: post #14
dhfhduk wrote: post #8

Earlier quoted context omitted.

I don't agree with the idea that the value of bitcoin was always to evade taxes and launder money. Maybe that's a primary motive for many, but I don't think that constitutes the value of bitcoin in toto. I have no skin in the bitcoin game--I've never possessed any bitcoin and don't feel any burning desire to in the near future. As monetary transactions have moved to the electronic sphere, there's been an important sh…

> Bitcoin and other cryptocurrency tries to get back to the idea of peer-to-peer financial exchange without needing that third party No, it doesn't. Because it relies on validation by a number of third-parties (whose identities and degrees of influence are opaque), who must (collectively, if not individually) be trusted and who (again, collectively, though this can end up fairly narrowly concentrated) control the fin…

That's a silly argument. Bitcoin does not rely on validation by 3rd parties. It relies on validation by a large number of independent third parties who can only act in a way inconsistent with the rules of the system if a majority of them collude. And even then what they can do is very narrowly prescribed (a double spend attack, specifically). That is vastly different from trusting a single independent third party like a bank who has literally no restrictions whatsoever on what they can do unilaterally.

Re: The Slow Criminalization of Peer-To-Peer Transfers

#43

Post by darawk »

Analemma_ wrote: post #15
Mendenhall wrote: post #9

Earlier quoted context omitted.

While I am sure those reasons play a part I think thats not even close to all of what makes it valuable. Ease of use is a huge one. I can set up a wallet in less than a minute and someone from across the world can send me bitcoin in the time it takes for it to clear the block, other cryptos even faster. One can post their wallet address and make jokes on social media and receive bitcoin just because people like the c…

> Ease of use is a huge one. Bitcoin is very complicated to use, doubly so to use securely. I've lost count of the number of stories I've read of someone losing everything, and then being chided by the community because "you deserved it, you weren't doing it the ~right way~", and of course there are a thousand mutually incompatible explanations as to what the right way is. This happens so often there's an entire subr…

That is a UX problem, though. The comparable problem in the 'old' financial system is legislative and cultural. I have tremendous faith that the rough UX edges of cryptocurrencies will get smoothed out by designers and coders looking to make a buck on-boarding people. I don't have the same faith regarding the vested interests of the existing financial infrastructure.

Re: The Slow Criminalization of Peer-To-Peer Transfers

#44

Post by mirimir »

abritinthebay wrote: post #38
roguecoder wrote: post #32

If we want to draw the connection to cash, companies that trade in large amounts of cash are also subject to regulation and reporting. For example, U.S. financial institutions are required to file Currency Transaction Reports for deposit, withdrawal, exchange of currency, or other payment or transfer that involves more than $10,000. Any organization that is facilitating those trades is subject to financial regulation…

Agreed. The problem is that Bitcoin wants to be taken seriously as a currency while at the same time not being subject to all the rules and regulations imposed on currencies. This was predicted years ago by most critics but was most often just hand-waved away by advocates, most responding that it was impossible to regulate the system itself. Well.. yeah, so you regulate assets and income of the people and companies i…

Some of us see P2P cryptocurrencies as a way to opt out of government regulation. Governments can't regulate entities that maintain strong anonymity. Most vulnerable are asset movements to and from meatspace. But there are well-known methods for dealing with that.

Re: The Slow Criminalization of Peer-To-Peer Transfers

#45

Post by darawk »

Retra wrote: post #16
Mendenhall wrote: post #9

Earlier quoted context omitted.

While I am sure those reasons play a part I think thats not even close to all of what makes it valuable. Ease of use is a huge one. I can set up a wallet in less than a minute and someone from across the world can send me bitcoin in the time it takes for it to clear the block, other cryptos even faster. One can post their wallet address and make jokes on social media and receive bitcoin just because people like the c…

None of those things necessitate bitcoin, though. If your bank let you setup a public deposit-only account with an anonymized alias, you'd get al the same benefits, except that it would not be viable for criminal enterprises. Electronic payments don't require anonymity to be convenient , which is where all the value you refer to comes from.

Bitcoin does much more than that though. It gives you sovereignty. If you've ever tried to get illegitimate bank fees refunded, you may recognize the value of this. When you and the bank disagree about whether or not a fee was appropriate, you have no recourse. Your account balance is what they say it is, and they may choose to deduct what they like from it. This is not possible in Bitcoin. In Bitcoin, nobody else can originate a transaction from your account. Only the holder of your private key may do that.

The existing money/payment ecosystem is pull. Vendors, merchants, and banks pull money from your account. Bitcoin and other cryptos are push. You push money to others. Push is obviously the right underlying architecture for a financial system. Pull architectures are singularly responsible for basically all credit card fraud, for instance.

Re: The Slow Criminalization of Peer-To-Peer Transfers

#46

Post by mirimir »

wolco wrote: post #41
cgb223 wrote: post #36

Earlier quoted context omitted.

How would one launder money with bitcoin? What would that look like?

Buy bitcoin using cash at local bitcoin atm. Put bitcoin in a mixer. Cash out bitcoin and declare the income.

The last step doesn't work. I mean, you might as well declare the cash as income. You'd be pressed to explain where either came from.

More useful would be to buy Bitcoin with cash, mix, and then invest assets somewhere anonymously. But it's a hard problem, because wherever assets appear in meatspace, there's typically the need to explain their origin. That's where many people get caught. Such as Tomáš Jiříkovský of Sheep Marketplace infamy.

Re: The Slow Criminalization of Peer-To-Peer Transfers

#47

Post by gnu8 »

roguecoder wrote: post #32

If we want to draw the connection to cash, companies that trade in large amounts of cash are also subject to regulation and reporting. For example, U.S. financial institutions are required to file Currency Transaction Reports for deposit, withdrawal, exchange of currency, or other payment or transfer that involves more than $10,000. Any organization that is facilitating those trades is subject to financial regulation…

The whole reason we need bitcoin is to circumvent these unjust and immoral laws. If the united states wants to maintain the predominance of the US Dollar as a medium of exchange and a reserve currency, the best thing it could do is repeal the Bank Secrecy Act and dismantle FinCEN.

Re: The Slow Criminalization of Peer-To-Peer Transfers

#48

Post by Analemma_ »

darawk wrote: post #43
Analemma_ wrote: post #15

Earlier quoted context omitted.

> Ease of use is a huge one. Bitcoin is very complicated to use, doubly so to use securely. I've lost count of the number of stories I've read of someone losing everything, and then being chided by the community because "you deserved it, you weren't doing it the ~right way~", and of course there are a thousand mutually incompatible explanations as to what the right way is. This happens so often there's an entire subr…

That is a UX problem, though. The comparable problem in the 'old' financial system is legislative and cultural. I have tremendous faith that the rough UX edges of cryptocurrencies will get smoothed out by designers and coders looking to make a buck on-boarding people. I don't have the same faith regarding the vested interests of the existing financial infrastructure.

Two things:

1) Bitcoin isn't new, it has been around for years now, and millions in venture capital has been poured into it. It's still a pain in the ass to use at all and basically impossible to use securely. I'm starting to think that if it could be fixed, it would be by now.

2) Not all those problems are UX faults. A lot of us happen to consider transaction irreversibility to be a bug and not a feature, for example.

Re: The Slow Criminalization of Peer-To-Peer Transfers

#50

Post by darawk »

Analemma_ wrote: post #48
darawk wrote: post #43

Earlier quoted context omitted.

That is a UX problem, though. The comparable problem in the 'old' financial system is legislative and cultural. I have tremendous faith that the rough UX edges of cryptocurrencies will get smoothed out by designers and coders looking to make a buck on-boarding people. I don't have the same faith regarding the vested interests of the existing financial infrastructure.

Two things: 1) Bitcoin isn't new, it has been around for years now, and millions in venture capital has been poured into it. It's still a pain in the ass to use at all and basically impossible to use securely. I'm starting to think that if it could be fixed, it would be by now. 2) Not all those problems are UX faults. A lot of us happen to consider transaction irreversibility to be a bug and not a feature, for exampl…

> 1) Bitcoin isn't new, it has been around for years now, and millions in venture capital has been poured into it. It's still a pain in the ass to use at all and basically impossible to use securely. I'm starting to think that if it could be fixed, it would be by now.

I think it's improved quite a bit in that time. Especially so if you consider some of the newer cryptos. Is it there yet? No. But these things take time. Computer interfaces took a long time to get where they are today. It takes a while to find the right abstractions, and people are constantly iterating on these things in the crypto space.

> 2) Not all those problems are UX faults. A lot of us happen to consider transaction irreversibility to be a bug and not a feature, for example.

Well, I respectfully disagree. You may want to build reversibility as a layer on top of Bitcoin. Perhaps something mediated by trusted third parties. But that should be opt in. You want the underlying financial infrastructure to have immutable, irreversible transactions. On top of that base, you can and likely should build support for reversibility in certain contexts.

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