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Defending Privacy in Crypto

blog.coinbase.com

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Re: Defending Privacy in Crypto

#51

Post by manholio »

EdwardDiego wrote: post #47
manholio wrote: post #39

What I would like to see is reversible and auditable privacy in crypto: to participate I need to disclose my real identity to a broker I trust that follows all KYC compliance rules in the jurisdiction it operates, and my financial identity and transactions are private until law enforcement performs an unblinding transaction that is auditable on the blockchain, (in the vein of Chaum blind signatures), yielding my brok…

No way in hell is law enforcement going to participate in your Merkle Tree to, you know, enforce laws.

Law enforcement needs to have an entity to subpoena and which can produce transaction and identifying information when the legal case might be.

Law enforcement is subject to laws too, there is no problem with having laws and enforcing them, unless you live in North Korea. What we should object to is extra-legal surveillance, not court orders.

Re: Defending Privacy in Crypto

#52

Post by [deleted] »

EdwardDiego wrote: post #48
jim_kreggis wrote: post #45

Earlier quoted context omitted.

The point is crypto has potential to be used whether regulators like it or not. Regulators will do everything they can to prevent this of course, but it at least means we have the potential to transact privately vs. not having any chance at all.

Sure, just like you have the potential to import heroin in your GI tract.

[deleted]

Re: Defending Privacy in Crypto

#53

Post by jim_kreggis »

EdwardDiego wrote: post #48
jim_kreggis wrote: post #45

Earlier quoted context omitted.

The point is crypto has potential to be used whether regulators like it or not. Regulators will do everything they can to prevent this of course, but it at least means we have the potential to transact privately vs. not having any chance at all.

Sure, just like you have the potential to import heroin in your GI tract.

Do you want to actually reply or just be snarky?

Re: Defending Privacy in Crypto

#54

Post by TimeBearingDown »

Loic wrote: post #23
ssklash wrote: post #17

Earlier quoted context omitted.

I think the point of this case is far less about privacy and crypto, but the fact that the US government sanctioned an entire piece of software. People use the software for privacy, and the government sanctioned it because it was being used for illegal things, but the fact that they can unilaterally sanction a piece of software is scary. Imagine if they sanctioned Tor Browser or Signal, both of which are used for pri…

The government has to balance stuff. Cash can and is used to buy/sell on the black market and also to buy/sell privately without leaving traces. But it is very difficult to move large amounts of money with cash. It means, it provides privacy with an acceptable level of freedom to do illegal stuff. Privacy in crypto enables the same but it also allows bad actors to move extreme large amounts of money. The risks for th…

I largely agree - to this comment, not your parent post - but the technology is here. Governments couldn’t accept citizens with easy access to strong encryption either, but they have had to make do ever since. Not all of the code can be sanctioned. The Monero project continues to mature, can be used as a “mixer” for other coins, and can be bought or sold using networks like Bisq.

Re: Defending Privacy in Crypto

#55

Post by smithcoin »

I think we should sanction using cash, it can be used untraceably and anonymously. Tornado Cash did $7 Billion in transactions. According to the US Treasury $300 Billion was laundered in US dollars last year. I think we are going after the wrong target.

Re: Defending Privacy in Crypto

#56

Post by ricochet11 »

pudo wrote: post #35
ricochet11 wrote: post #20

Earlier quoted context omitted.

We should not have our rights removed because other people who break the law might also benefit from. We cannot have a free society if every decision is "Wont somebody think of the children" or "but the terrorists". Liberty or death: it is not death of the individual but death of society. The resilience of our social structure is dependent on our freedoms. I cant say how saddening it is to have lived through the cryp…

When you say "might" - you're aware Tornado was actually used for these things to the tune of at least half a billion dollars? Basically, the case you're making is: they might have actively aided and abetted nuclear proliferation - but they're technologists, so their actions are sacrosanct and cannot be subject to the usual penalities because we've been ultra smart and managed to create an industry where free speech…

I am saying the rights of my sister and brothers, friends and colleagues are far more important to me than clamping down on north korean hackers. I would much rather live in a world where we are free to use tornado cash and maintain our privacy in these networks, than live in a world where code can be overnight made suddenly illegal, everyones accounts historically associated with that code blacklisted, the developers then sit in jail for a month with 0 charges against them.

The large majority users of tornado weren't criminals. Tornado devs had worked on compliance tools to aid governments, doesnt matter they get locked up anyway. The treasury has historically only sanctioned people, doesnt matter apparently they can make themselves new powers and sanction the use of code too.

Re: Defending Privacy in Crypto

#57

Post by cycomanic »

ricochet11 wrote: post #20
nappy wrote: post #11

Nowhere in this blog post: any discussion of money laundering, sending funds to terrorist groups, rogue states. Without mention of any of the legitimate reasons the US government is sanctioning Tornado Cash, this is merely propaganda from a financially interested party.

We should not have our rights removed because other people who break the law might also benefit from. We cannot have a free society if every decision is "Wont somebody think of the children" or "but the terrorists". Liberty or death: it is not death of the individual but death of society. The resilience of our social structure is dependent on our freedoms. I cant say how saddening it is to have lived through the cryp…

We remove rights all the time, because bad people do bad things. You have to follow road rules for example, you are not allowed to buy components which could be used to build a nuclear bomb, all countries restrict access to weapons (they just draw the line at different places).

So the argument that we should never use "the terrorists" or "the children" to make policy decisions is overly simplistic. I believe the sort of reasoning is actually counterproductive. Even here on HN many believe a restriction on crypto currencies is justified if it curbs tax evasion, in other words they believe the trade-off between right restriction and societal benefit is worth it. So arguing that we should never use "the terrorists" to argue for restricting rights is very obviously contradicting how we are implementing laws, so it is not convincing. Instead we should argue why the trade-off is such that the argument does not hold in this case.

Re: Defending Privacy in Crypto

#58

Post by TimeBearingDown »

nappy wrote: post #14
FabHK wrote: post #12

I strongly support the right to privacy in messaging, ie encrypted communication. However, I am much more hesitant with privacy in money transfers. It is not obvious to me at all that we should have unlimited unregulated money transfers. In fact, I fear that unreflected support for the latter might erode the (already tenuous) support for the former: Currently, we might still be in a position to regulate and disrupt c…

Pure privacy, without limitation, in money transfers would be catastrophic. Despite the consternation of hyperextreme libertarians sitting in their armchairs, the ability for the government to collect tax revenue is a pretty good thing and has broad societal benefits. Also allowing free flow of funds to terrorist groups is bad.

Extremely private monetary transactions may be a net negative, and yet it may be the world we must adapt to, if the ability to do so now exists.

There is always room for “good honest police work”, though.

There are many roadblocks governments could use to slow progress, but I’m not sure this is truly preventable any more than PGP or BitTorrent could have been.

If income tax becomes logistically problematic, there are many other types of taxes that may then need to fill the void.

Re: Defending Privacy in Crypto

#59

Post by anon9001 »

nl wrote: post #32
can16358p wrote: post #4

Good (and TBH unexpected) move by Coinbase. If we lose the foundations of privacy at this stage, the future of crypto would be severely affected. Crypto and digital assets should be free from regulation, even if it brings side effects (e.g. laundering). The moment we centralize crypto by state, we lose the war against corrupted states and centralization. While I don't support bad actors that use crypto in any way, I…

> Crypto and digital assets should be free from regulation, even if it brings side effects (e.g. laundering). It's far from clear to me why on earth crypto should be free from regulation at all.

I think this case is a pretty clear example of why.

The regulators are supposed to be protecting who from what exactly? And at whose expense?

So far I've seen two lines of reasoning:

1) Regulators are needed to protect me from myself. I can't assess if these dog-coins have long-term investment potential or not, so I want the government in the loop somehow. If I can purchase something on the internet, I assume it's safe, or the government wouldn't let it be sold.

2) Regulators need to protect the government from the effects of money laundering. I must give up privacy for the greater good, as the money laundered by North Korean hackers will be used against my country. Giving up all privacy in exchange for a small reduction in the funding of our enemies is always a good trade.

Even if I buy one of these arguments wholeheartedly, the practical matter is that we're trying to prevent math from being done here, and it's just not going to work. It's sort of like preventing piracy.

But public sentiment has become very anti-crypto, so I suspect we'll land in a war-on-drugs type situation where the crypto never really goes away and you can still transact it anonymously, but we mostly just don't talk about it except for the occasional bust to ensure more enforcement budget next year.

Re: Defending Privacy in Crypto

#60

Post by anon9001 »

jim_kreggis wrote: post #42
can16358p wrote: post #4

Good (and TBH unexpected) move by Coinbase. If we lose the foundations of privacy at this stage, the future of crypto would be severely affected. Crypto and digital assets should be free from regulation, even if it brings side effects (e.g. laundering). The moment we centralize crypto by state, we lose the war against corrupted states and centralization. While I don't support bad actors that use crypto in any way, I…

The only way for crypto to win is to implement privacy and anonymity in a way regulators cannot prevent, such as privacy coins. Btc and Eth relying on mixers is a flaw which regulators will exploit to their advantage.

Crypto can technically implement privacy and anonymity in a way that regulators cannot prevent. Now what do we do about it?

Also, Ethereum could adopt privacy by default some day, via their proposal process.

It's fascinating to watch regulators talk about "bitcoin" and "ethereum" as if they're "gold" and "oil", unchanging commodities that just need to be categorized and dealt with appropriately.

Ethereum is totally publicly visible today, but it does not need to be that way tomorrow. These are living projects.

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