The treasury is expanding the Patriot Act to attack Bitcoin self custody
(tftc.io)634 points by bilsbie 16 hours ago
634 points by bilsbie 16 hours ago
Not saying anything new here, but at the core there are only a few key reasons for using bitcoin: investment, hiding your finances, and the idealism of de-centralization.
The intrinsic value of decentralization is the ability to operate outside any fiat system of laws or government. So that one lines up a lot with the criminal side of hiding your finances. The investment aspect sure is enticing to lots of folks, but without a real core underlying value it's just bubbles and rug-pulls. So all this has the effect, wittingly or not, of lining up the incentives of all BTC users with money launderers.
Sure there are TONS of perfectly legal reasons not to want people to track your finances. Many of them are even moral. But obviously many are neither moral nor legal. (The edge case of moral but illegal sure gets people fired up, but it's a vanishing minority of actual use.) So when the regulators come looking for criminals, we unsurprisingly get lots of sound and fury about how there are lots of perfectly valid reasons why good people will want to act in ways that make them look like criminals. Uh huh. Yes, there sure are.
Yeah. I understand the excitement over the past two decades about the possibility of cryptocurrencies, but it came with a lot of naivete. After the fight to create sovereign central banks, did anyone seriously think that they were just going to give it up? Sure, maybe they can't stop you technologically, but it's very easy to simply make it unlawful, and then the men (and robots) with guns call.
Very true. In my opinion, and strictly from an American-centric view, privacy should only extend to transactions within borders between citizens. As soon as it involves transactions from outside our borders, then it is a national security concern. We know, right now, that both Russia and China are fueling internal political tension via massive and sophisticated disinformation/influence campaigns, a certain part of which involves paying influencers, extremists, shady media outlets, maybe a Representative or three in America to push their agendas, foment discontent aiming to destabilize and control the United States. Monero is definitely being used in this information warfare. I am pro-privacy, pro- individual rights, but we have to resolve this central tension of these things and the very real hyper connected world we live in which very real nation-state enemies. I am at the point where I think restricting the internet to allied countries might actually be a good idea, as currently we are leaving citizens unprotected from every nation-state actor who wishes to manipulate us with targeted, data-analytic, bot- and ai-empowered campaign against us. It is out of control, and as long as a monetary instrument like crypto enables that attack surface, it will be hard for me to support crypto-maxamialism.
> a certain part of which involves paying influencers, extremists, shady media outlets, maybe a Representative or three in America to push their agendas, foment discontent aiming to destabilize and control the United States.
Doesn't this describe every political party and megacorp in the US too...?
One of the biggest platforms this happens through is Reddit, and they intentionally leave it wide open. You don’t even have to have an email address to register and start posting. Bots make these platforms a fortune, and they’re happy to sell out their country to foreign influence for a dime.
So yes, and I’ve been saying this since it started really getting bad in 2020, we need to completely cut enemies of the US off from our internet. There will obviously be attempts to proxy through western countries, so it needs to be strictly enforced, possibly with an identity requirement for participants.
For those against this, imagine a physical country where anyone can spawn thousands of faceless, nameless drones disguised as real people which are free to do whatever they want in society with zero risk of consequences. What would happen to that country? It would fall. As digital societies have now become larger than countries themselves, this is the very situation we’re dealing with. It’s not the utopia we hoped for, but it will be a dystopia unless action is taken.
I used to be against the real ID moves of early social media platforms, and now I wonder. How would information spread if social media users on X, for example, were clearly identified as 1 to 1 associated with a named person? Sore they might spread something, but unless that guy in Russia has an American ID, then he's not posting.
The current, put as many bots as you want on, approach is pure war.
Exactly. The basis of the problem is an unlinking of actions and real world consequences. People wil do whatever they want when consequences no longer exist.
If Monero ever came close to Bitcoin's popularity, it would be outlawed. Plain as that. You can't get freedom through technology.
Monero has already been delisted from relevant exchanges last year because "reasons".
The main website that matched people to trade fiat for monero (localmonero) got closed recently because "reasons".
It is pretty popular and outlawed since a while. Basically the only relevant crypto currency used for purchases on the street since several years now. You can look up the number of daily on-chain transactions and tends to be on top every day.
You likely would only notice this if you need to donate money for someone with the wrong opinions or live at a non-aligned country.
Freedom here means transacting without:
--
anti-money laundering safeguards
sanctions enforcement
consumer protection
tax enforcement
fraud prevention systems
--
It is very true that technology won't get you this freedom from sensible legal requirements we impose on financial transactions.
That's obviously a good thing, but I guess people who are in crypto would disagree.
Conversely, property rights are also a good thing. I don't agree that it is as simple as you present it. Even if you believe that the state has a right to confiscate, regulate or inflate away value for a "greater collective good", reasonable people might also recognize the potential for abuse.
So no, it isn't obviously a "good thing", unless you reject these nuances in favor of an all powerful state.
It's not so black and white. Obviously social and political change is the goal. But in the meantime technology can help if you're living under repression.
Take VPNs and Tor helping people jump the Great Firewall of China for example. Obviously, yes, this is a political problem; the GFW shouldn't exist. But it would be foolish to dismiss the technology as a vital part of fighting back against the state.
You are being downvoted, but you are correct. I am east european and I know how hard the fist of the State hits. Sometimes I think westerners see technology like some special moves that you can quickly combo so you can defeat the evil boss at the end. No, there are no special moves, just a boot stamping on a human face -- forever.
> You can't get freedom through technology
I'd argue the opposite - if Bitcoin had been created with secure private transactions (untraceability) it would be in the same popular position it is today, but the attacks on it (chain analysis etc) would be failing instead of inevitably marching forward.
Your argument seems to rely on an assumption that the insecurity of Bitcoin has been legible and apparent to the [greater] government for most of Bitcoin's life, and so the government allowed it to gain popularity knowing those insecurities would eventually make it succumb to government control. But in general government sees any lack of identification/data as a problem to be rectified, and the popular wisdom for quite some time has been that Bitcoin is "anonymous". so I'd say the government acted as quick as it would have regardless of the actual security properties. It feels like any holding off had more to do with financial lucrativeness rather than an understanding of its long term security flaws.
Now that we're here though, Bitcoin does seem like a very strong inoculation against financial privacy technology. Government is now well aware that software/cryptography can be used for money, and the first question asked is why isn't your new niche system grokkable to chain analysis?
A lot of people keep looking for technology solutions to political problems. The fact is that privacy, especially of financial transactions, is becoming illegal. Any technology that allows you to send or spend money anonymously will be attacked by our governments. They won't be allowed.
You can argue about whether you can get away with it due to difficulty of enforcement, but all that does is turn us all into criminals. They won't put ALL of in jail, but they can put ANY of us in jail - the ones they don't like.
This is a very narrow way to see it. Technological advancements can and did massively affect politics and other parts of life.
Today you get away with it, they make it harder but it would still be better than the old one.
People manage to corrupt and hack things inevitably as long as it is static, changing systems can obviously be good just for this reason only. It also brings questions about why the current system is the way it is.
> The fact is that privacy, especially of financial transactions, is becoming illegal. Any technology that allows you to send or spend money anonymously will be attacked by our governments. They won't be allowed.
It's probably a bit worse than that. It's not specific to transactions or spending.
Eventually any IP talking to another IP without the mandatory metadata to link it to a physical identity will be illegal.
Right now there is a hodge-podge of solutions that piggy-back on the phone networks, wires, etc. that used to give LEO enough actionable information to track some criminals. But most of that has been obsoleted by modern cryptography.
Don’t understand this pessimism. There are a large number of countries in the world. You can migrate out of a country if they start doing insane things like this.
I would consider leaving UK very seriously if I was building a life there now, as an example.
Spot on.
Some think we need financial freedom, but in reality it's the freedom to fund scams and malware, launder money, dodge taxes, and buy stuff that’s illegal.
That won't become legal just because you use "Monero" or whatever. Obviously we can't have privacy for financial transactions.
You forgot a few things on that list that people would like freedom for:
advocating for (or against) trans rights, protesting against the deportation of migrants, advocate against gun-control, and donating to (anti) palestinian causes
Are just a few things that people would like the freedom to do.
The point being, financial privacy is an important part of having a functioning democracy. But at the same time, financial control and limits are also an important part of a functioning democracy, for e.g. the 'freedoms' you mention. In the end, neither perfect privacy, not perfect surveilance are what we need. The best solution will be somewhere in the middle, with nuance.
There's a conflict between Bitcoin as a public ledger, privacy, and money laundering.
With a bank you can have anti-money laundering and bank secrecy. Transaction are known by the bank, can be subject to subpoena or automatic reporting, but are non-public.
If you want privacy on Bitcoin you need to do things that look a lot like money laundering. Governments banning money laundering isn't a surprise. The value of Bitcoin, if transactions are fully public and attributable to pseudonyms, is questionable.
In some ways, the problem Bitcoin has is that it is inflexible. Governments want to change the rules in finance from time to time, traditional finance adapts.
> There's a conflict between Bitcoin as a public ledger, privacy, and money laundering
There is, to be fair, a legitimate debate to be had about dismantling our anti-money laundering infrastructure.
No, there really isn't. Money laundering has been a huge problem enabling all sorts of crimes and issues. There is no debate to be had on the benefits of prohibiting it, and you have to be very deep in the Silicon Valley rabbit hole to think even 5% of the population of any nation would support doing away with those rules.
> there really isn't. Money laundering has been a huge problem enabling all sorts of crimes and issues
To be clear, I think there should be limits. I also think a lot of AML is theatrical.
Where it’s not is where large volumes can be moved. Less emphasis on cash. More on offshore accounts, tumblers and high-volume wallets.
Except that money laundering is allowable for some, but not all.
Don't pretend the AML rules are enforced fairly and evenly.
Essentially decentralisation sounds nice, but doesnt work in practice.
Most governments aren't decentralized in their structure, which causes the "problem". If you have private entities that coordinate with each other it works quite well, but the world is very used to big centralized governments that "solve" all their problems.
It's a pretty direct response to your claim that "decentralisation sounds nice, but doesn't work in practice". Decentralization has worked in practice many times in many ways.
Also, you can have reputability AND decentralization, that's actually a fundamental component of how any Blockchain system works. When you mine a block you sign it to ensure nobody else can resubmit your work and take credit.
The internet for the average person has converged to a handful of products and services.
Your point being?
People prefer centralised stuff since it takes care a lot of stuff for them. They dont actually care all that much about technology that yield decentralised outcomes. I know that may be difficult for many here to comperehend.
It's been terrible that BitTorrent doesn't work anymore. I can only download 10TB of all the movies and TV shows our family has ever wanted spanning 60 years. It has to run off this massive server in the closest as big as our cat! Sucks our grandma can't access it from across the country via Tailscale and a bit of DNS abuse.
I can't tell if you are being sarcastic. Obviously Bitcoin doesn't "work" for any purpose. But in contrast, Tor obviously works. Here are constantly updating HTTP response dumps from the Tor hidden service ecosystem: https://rnsaffn.com/zg4/ (NSFW) There is a lot happening inside the Tor network.
I'm confused how the connection was made between "here are our guidelines for suspicious activity" and "self custody is outlawed"
It can be hard to figure out exactly what is outlawed with banking interactions. It seems a lot of the KYC/AML stuff is based on industry best practices and guidelines. There's no law you need a state ID with address to open a bank account, but when I tried to open up a bank account without an address I found it basically impossible. The bank will then cite that these practices are what they're held to as law, because the law itself is vague and relies on more nebulous customs.
So what is called "guidelines" one day becomes legally binding later with no act of congress.
Unfortunately there's a massive swath of mere guidelines and regulation that end up having legal binding. For instance, a Navy sailor was recently sent to jail for 20 years for having gun parts that were cut up the wrong way, the "wrong way" being the right way with previous mere guidance and the wrong way apparently being the fact that some time since then the guidance changed but not the law.
That's the whole point. They can't overtly outlaw things because aggrieved parties would sue and win. So they soft outlaw them with expensive record keeping requirements and ambiguity because no business big enough to win but smaller than a giant mega-corp will intentionally risk going toe to toe with the government in court as doing so would likely be financially ruinous.
And even if the government doesn't look like it's disposed to do that in your situation you're still sticking your neck out by deviating from the herd because then you can't screech "standard business practice" when some contrived chain of facts results in you fending off a civil suit for whatever reason.
This isn't just a banking thing or a guns thing, you see examples in every industry once you know the pattern.
As long as the government only tazes your dogs and ruins your business, you can't even sue against the law even on constitutional grounds.
See Knife Rights V Garland. []
No one had been convicted in the past 10 years for violating the switchblade act, so the state ruled the law couldn't be challenged ("no standing"), even though it was actively being used to ruin people's businesses and raid their homes (the government would just give everything back a few years after doing so and not go through with charges).
[] https://kniferights.org/legislative-update/court-opines-feds...
Yeah, the .gov does that all the time. See every "basically Bruen v NYC" type case prior to Bruen.
See this very nice blog-post: https://www.bitsaboutmoney.com/archive/kyc-and-aml-beyond-th...
It explains how KYC and AML law function as a stochastic control on crime. How that is difficult to do through actual laws, and what the downsides of this system are.
> creating and using single-use wallets, addresses, or accounts, and sending [cryptocurrency] through such wallets, addresses, or accounts through a series of independent transactions
One could argue that's how normal Bitcoin wallets work. The addresses are deterministic based on your passphrase (or derived private key). The addresses don't need to get reused because there's no real value in doing so, and no real cost of just using a new address each time.
Though yes--even if that's the exact meaning and design, presumably one could still use the simpler wallets that DO just reuse the same address over and over. And obviously that'd reduce privacy quite a bit.
Yes. Single-use addresses protect me. If you store your entire balance under a single address then anybody you transact with can see your entire balance by lookup up the transaction. Single-use addresses protects you from people snooping around looking for worth while $5 wrench attacks.
The quote is "single-use wallets, addresses, or accounts." If you download any normal Bitcoin wallet today, it'll use a series of words to derive a series of private keys that are used by the wallet. Each one gets a different address.
Then your wallet software is smart enough to treat all the addresses derived as a single wallet. When you go to make a payment, it makes it from the various addresses owned by the wallet. When you want to accept money, you can generate the next address in the series and give a fresh address to someone new.
The net result is that it's not clear from someone looking at the blockchain which addresses actually belong to YOUR wallet and which transactions are you sending money to someone else or yourself.
AFAIK this is how basically all Bitcoin wallets have worked for years. Electrum and Base (formerly bread wallet) as well as Ledger's wallet are the main ones I've used.
EDIT: Just to address this:
> What is the "normal Bitcoin" use case for funneling money through a chain of throwaway wallets?
It makes it so that someone publicly looking at the blockchain can't provably tell how much Bitcoin you have.
We still have to give addresses to people to receive money, so if we were only allowed to have a few, it wouldn't be hard to trace which people own which wallets. And then now you've got a big physical security risk because the world can see how much money you are able to give if they invade your home, kidnap a family member, etc. It'd be like having to put a sign out in front of your house that says, "$600,000 in cash is in here." And they could see the cash.
Because just about all those practices are what reasonable users of the protocol would do, and making your transactions 'suspicious' is synonymous with all the big players refusing to deal with you. It's a way of prohibiting behaviour outside the force of law, which is even more insidious.
This would come as no surprise, since all the original promises of Bitcoin circa 15-ish years ago are long dead. The turning point occurred when all exchanges agreed to report transactions directly to the IRS. I say this as someone who had an interest prior to that but lost all interest when the Crypto community sold out its ideals and consented to certain regulations in the interest of mass marketing cryptocurrency for the purpose of speculative profit.
Wait until you find out about the TRUST program and all the exchanges reporting PII to another.
This is pure click bait that relies on a deliberate misreading of a 2023 notice [1] that tries to imply that "self custody" is being attacked in any form.
All that this is saying is that the government will try to track money movement to pursue criminal activity, including, unfortunately the criminal activity of moving money in a way that looks sketchy. This is something that we have decided we have to live with.
[1] https://www.federalregister.gov/documents/2023/10/23/2023-23...
It's not "pure click bait" for anyone that has followed along with the crypto community since the early days. This is basically an official stake in the heart for anyone that even loosely held on to the original ideals behind crypto.
Crypto is increasingly no different than traditional banking in anyways that are beneficial, and remains different in ways that can only be harmful to the individual (market manipulation, wild speculation, lack of institutional regulation) etc.
I don't know how anyway remotely interested in decentralized crytpocurrencies can see this as "click bait".
On the other hand you get to vote who is in the gang. So choose wisely.
Most of the people on the planet don't get to vote.
I recognized it in the opposite direction, after observing that gangs inevitably end up being quasi-states within their turf. They demonstrate almost everything I associate with statehood except for issuing their own currency. From there, the reverse (that governments are just big gangs) also flows naturally.
>Loading up a single address with too many UTXOs degrades the entropy of a public-private key pair and makes it easier to brute force a user's private key.
Is there a realistic risk there? If I use an address a million times, how much weaker is it? And how feasible would it be for an attacker to brute for it?
Strictly speaking, loading an address with many UTXOs has no effect on security of the receiving address at all (beyond increasing its public profile).
The security concerns start happening after an address spends a UTXO. Before a P2WPKH (segwit) address is used, only the public key hash is known. In order to spend from it, the full public key needs to be revealed. That's why it's recommended to use single-use addresses, because a quantum computing attack or elliptic curve vulnerability could be used against an address where the attacker knows the public key, but would not work against an address where the pubkey has not yet been revealed.
So, the main security change happens after you spend from an address the first time. Subsequently, there are theoretical vulnerabilities that could occur after an address is spent from many times, but really only if the signer is malicious like dark skippy, or faulty and doesn't properly follow RFC 6979 deterministic signatures, leaking some signature entropy which could be used to crack the private key. The latter has happened with some bad custom wallet implementations, but these attacks are even further in the realm of theoretical, not super realistic, require faulty software/firmware to be implanted into signing devices.
so the risk to the wallet holder is the exact same risk that exists for every single HTTPS connection right now?
Post quantum algorithms have been available. You can do it today. Why not for bitcoin?
In reality, there are very few current real world implementations. This article makes it seem that RSA is under active exploitation. If it is, bitcoin is not the first target IMO
Yes, TLS encryption has similar potential risks, quantum and other elliptic curve vulnerabilities.
Quantum resistant algorithms are under heavy discussion in bitcoin dev mailing list, and have been for awhile. I think the signature sizes for leading algorithms are still too large to be practical within existing block size limits, but of course lots of things would probably have to change in a quantum emergency. Bitcoin devs tend to be extremely conservative with making new changes (in part because it attracts a lot of contrarians) so it's going to take a long time for people to agree on the right architecture for a quantum resistant scheme in bitcoin, but it will happen, BIPs are in the works like BIP-360 which outlines some potential structure for it.
Inevitable. Remember Roosevelt's gold confiscation.
https://en.m.wikipedia.org/wiki/Executive_Order_6102
It was forbidden to have more than 5 ounces of gold.
Bitcoin is more a rug pull then ever, it's just that the "right" people are in charge of when and how the rug is pulled so it's becoming legitimized in all the ways that benefit those people and de-legitimized in all ways that benefit the individual.
This is inaccurate and in a hilarious way. Treasury is not coming after Bitcoin. There's an update in an ongoing rulemaking process that got reported here[0] as banning mixing and privacy tools. It may have been blown out of proportion[1], but I am not a lawyer, and certainly banning these tools would be bad. The thing is, Bitcoin's not private—every transaction is public for everyone to download. It's Twitter for your bank account. And that comes with serious privacy, safety, and boring commercial counterparty risks that should be addressed. These kinds of tools exist to mitigate that problem. The irony is that Bitcoin has largely refused to address this obvious issue, so no, Treasury isn't coming for Bitcoin. Indeed, there been years of people arguing Bitcoin would be just fine with no privacy protections. [0] https://www.therage.co/us-government-to-bring-patriot-act-to... [1] https://x.com/valkenburgh/status/1966174324701778071"
LOL, the BTC people who thought "Digital Gold" was a good slogan are going to learn what happened to self custody of gold and the gold standard.
BTC is in a much worse situation than gold was in 1970. The government has the technology to follow transactions and require BTC transactions to be done on their chain with their BTC equivalent GBTCs. That is until the government decides to issue print more BTC equivalents
M question was on what legal/Constitutional basis does the Treasury have for expanding the Patriot Act? Is it because the law provides powers to the Treasury department to define areas that the law should apply? Or is it a case where the administration (once again) is assuming it can do something, the Constitution be damned?
Loading up a single address with too many UTXOs degrades the entropy of a public-private key pair
does bitcoin or UTXO's somehow for some reason generate multiple PUBLIC keys for the same private key?
If there would have been better policing of digital currency by its users against criminal actors, perhaps digital assets would be spared the attention and now regulation. Sadly, increasing adoption and privacy guarantees lure criminals same as legitimate users.
Original aim was that people don't deposit Bitcoins into a bank, Coinbase etc, but use it to freely transact between themselves, outside of gov control.
> How long before its seperated from it original aim and just turned into a gambling token
Always has been.
I mean it was useful for online gaming related transactions, like 15 years ago.
Ever since it has become a more obvious scam with every passing year.
Today you can barely post about it on most major platforms without immediately spawning multiple spam comments trying to part you from your money.
Real value crypto adds to the economy: ~0.
Once this scam inevitable comes crashing down, it will probably take the stock market with it. And all for nothing but the enrichment of early crypto adopters.
They didn't care when he personally rugpulled them for billions, why would this disrupt their sycophancy?
> Loading up a single address with too many UTXOs degrades the entropy of a public-private key pair and makes it easier to brute force a user's private key.
Well that's not true... The key doesn't change because you added more bitcoin
Overton window. There is a lot of funding for youtube influencers to play with casino coins that are transparent and traceable. Those are basically looking for "money goes up" and don't really care about the crypto part.
Monero is only on the news for negative reasons when someone tries to bring it down or delists from yet another exchange. There isn't funding to make it popular, which I guess in the end it is really up to Monero users from pushing it up.
That's a long-winded explanation of the fact that most people don't care about Monero's privacy benefits, so the only way Monero will be more popular is if someone funds a marketing campaign for it.
On- and off- ramps suck. And there isn't much speculative value. So it misses the main 'use case' of crypto.
Its by far the best crypto-currency for making payments. But people care very little about making payments with crypto, and exchanging between Fiat and Monero is very difficult, so its not an easy payment system either.
As someone who hasn't read the article, is holding bitcoin in your own wallet going to become illegal? Also, which wallet do you guys recommend, I use Coinbase but it sucks.
It doesn't look like that explicitly will become illegal, but this part undermines a lot of the value of it:
> creating and using single-use wallets, addresses, or accounts, and sending [cryptocurrency] through such wallets, addresses, or accounts through a series of independent transactions
That's the default way Bitcoin wallets work, and it helps a ton to improve privacy. If we were limited to always reusing the same few addresses, it'll be very easy for not just law enforcement but ANYONE to see just how much Bitcoin you have.
If that's a small amount, it's not a risk. If it's a big amount, now you've got a target on your back. For me to accept Bitcoin payments, I need to publish my address, and from that address, you'll be able to see how much Bitcoin I have (and trace other transactions) over time.
Imagine everyone in town knowing that you've got six figures (or more) of money that can undoubtedly be extracted from you by invading your home, taking family members hostage, etc. At that point, you may think it's safer to keep it in an exchange, and you may be right.
Yes, and for even higher security, use a bitcoin-only airgapped hardware wallet like Coinkite's Coldcard or Foundation's Passport Core.
Good luck with that. If you are on a 'real' OS like Linux or BSD and have *coins there, I doubt anyone would know. Especially if you have disk encryption and using a trusted VPN or tor or something like that. Remember to enable MAC spoofing too.
If you have your wallet on a Cell Phone, you might as well post a sign outside of your house stating "I am a bitcoin user and trying to keep that use secret" :)
No it's not in my control but I use it because it is convenient to buy and sell.
Maybe it solves one problem, but it has many other: https://coinpaper.com/10812/qubic-vs-monero-pr-stunt-or-proo...
Also, always remember native coinjoin.
Assuming this is true, how would this be enforced and tracked?
Self-Custody is problematic for any government as it allows any citizens to accumulate any kind of wealth they have and simply "transfer" it overseas without any oversight and in a ridiculously short amount of time. Some countries (rich/developed countries) allow free capital transfer but these transfers are regulated and also some jurisdictions are sanctioned. Transferring money abroad, from the perspective of the origin country, just moves the money inside the origin country system from one party to another. So it is well within the visibility and control of the state, especially for large amounts of money.
Today, you can brain-memorize $1bn in Bitcoin and move yourself from one country to another; and depending on the country; might be able to exercise different amounts of that purchasing power. Control moves from the origin country to the reception country.
Russia and China were always hostile because of this. The Chinese authorities regarded Bitcoin as some sort of capital flight scheme. Now both Europe and the USA are too. I think Bitcoin only chance for survival, in its current form, is if these two poles do use it as a mechanism to attack one another. Mining is already balanced between East and West.
The tweet says "could be labled suspicious" the article says could be made illegal.
I've never heard of this website but if your only source is a tweet and you misrepresent it, I don't believe it.
I'll take bets: By EOY 2026 it will be legal in the US to use single use addresses
It is a nuisance to the state.
I do not see how it is an existential threat.
Nation states existed for centuries in which money was frequently held as cash and even large transactions were often done in cash. its still common (or was until very recently) in a lot of (mostly poor) countries
> With financial privacy and real freedom, you can hire a competing army.
Having the money to pay an army is a long way from hiring one. Recruitment and buying military equipment at any scale would be obvious.
Bitcoin is a perfect microcosm for the tech sector in what happens when people who don't know how something works and refuse to understand it, try to replace it.
Every aspect of the modern financial system exists for a reason. It evolved over time to deal with problems. Things like reversible transactions are a feature not a bug.
Bitcoin is where all the gold bugs went who lamented the end of the gold standard. Most of these people didn't understand that at no point in history was the US dollar 100% backed by gold (or silver, originally). Never.
What backs the US dollar isn't gold or oil or anythihng else we dig up out of the ground. It's long schlong of the US military.
I've also said that crypt currency exists only because the government hasn't shut it down. All it would take is a policy change from the US government to say banks who have access to the US financial system cannot trade in Bitcoin and it would be over. Yes you could still have wallets (at least until the government starts going after Bitcoin farms, which again it could do) but what would you do with those coins?
Bitcoin is not, never has been and never will be an escape from the perils (some real, many imagined) of fiat currencies.
Rethink your ideas, you are very wrong here.
It is a fantastic escape from debasement of fiat, and always has been an escape from the perils of fiat currencies. It was created for this very purpose in 2009, and has absolutely achieved this goal. A 2019 $ vs a 2025 $ are significantly different purchasing power. Yet a 2019 BTC vs a 2025 BTC shows remarkable capital appreciation. You can pick any time scale you like, and except for very specific edge cases, it has in general been a great hedge against debasement of fiat, and will continue to be.
I have been able to preserve the purchasing power of my savings for over a decade now, and still keep buying every week.
Why would this be any different the next decade? (beyond the attenuation effect from more capital flowing into the space?).
That changes nothing. And you can use it as a currency. Declaring it an asset is irrelevant. You can call Bitcoin a cryptocurrency, an asset, a currency, a scam, it doesn't effect Bitcoin in any way. Bitcoin doesn't care. Its sole purpose is as an incorruptible, debasement and censorship resistant ledger native to the public internet.
Of course this all redefines exactly what a currency or an asset IS. Is Gold a currency? Is it an asset? is it both? Its semantics. Both gold and bitcoin can be exchanged for goods and services.
Most assets will not keep going up forever in Bitcoin terms. Maybe no asset will, on long enough time scales. Most assets are plummeting in price considerably in Bitcoin terms. Today it takes 6-figure units of dollars to buy one unit of Bitcoin. On to 7 and 8, and more. Eventually, you will not be able to exchange ANY amount of fiat for Bitcoin.
You are free to ignore Bitcoin for then next 10 years, like most folks on HN have done for the past 10.
This article is nonsense.
The guidance doesn't mention anything similar to self custody and the Patriot Act itself has expired: https://en.m.wikipedia.org/wiki/Patriot_Act
It's the worst kind of clickbait, and is actual, real fake news.
Only section 215 related to FISA surveillance expired.
Your comment is nonsense.
This is not terribly surprising. Control of the monetary system is a key responsibility of the US federal government; it was always going to be the case that if Bitcoin became a meaningfully-sized part of the financial system the government would impose regulation.
Now we get to see how enforceable it is (and I suspect it's more enforceable than people wanted to assume... They can jail you indefinitely for refusing to divulge a password if the court finds it is not a violation of your Fifth Amendment rights to divulge it. https://xkcd.com/538/).
It will be interesting to see how the pro-Trump crypto bros react to this. Likely by now the whole group has had a chance to invest heavily in various altcoins or whatever will be the beneficiary of government largesse, so these proposed (and difficult to enforce) restrictions are likely intended just to pump those for quick profits.
I'd argue that Bitcoin has been effectively immune to attacks like this by governments for nearly a decade.
Does no one else find it weird seeing anything from this administration "anti-Bitcoin" at all? I wouldn't be surprised by this headline during a previous administration, but generally speaking, this administration has been very Bitcoin-friendly (and Bitcoin institutions friendly right back). To be clear, the simplest answer is "sure but that doesn't mean they have to agree on everything". But I would like to propose that if you ask the simple question of "who does this benefit?" it may suggest we are witnessing a different phenomenon here.
I think this might be the first indication that what we currently call "institutional Bitcoin supporters" are not "Bitcoin supporters" at all, or rather, what they call "Bitcoin" is not what you and I call "Bitcoin". Services like Coinbase and BTC ETFs don't really suffer from this development at all. In fact, I think it's quite obvious that obviously benefit from something like this (at least from the first-order effects). What's the alternative to self custody? Well... third-party custody. Especially since they are already bound up by KYC rules, right? Their is a cynical reading that there's nothing inconsistent with this development if you consider "institutional Bitcoin's" goals to primarily be replacing existing financial power structures with themselves. "Bitcoin" is just a means to an end. Their goals were only incidentally aligned with individual BTC holders since they were previously in similar circumstances as the "out group". Previous administrations were as suspicious of "Bitcoin companies" as any individual Bitcoin holder, perhaps even more so. But that's not the case anymore. Bitcoin companies have successfully been brought into the fold, so it's not even that they're necessarily "betraying" the values of Bitcoin true believers, you might argue that interpretation of shared values was entirely inferred to begin with.
Critically though, I think an important consequence of this is that Bitcoin purists and skeptics should realize that they arguably now have more in common than not, at least in the immediate term, and may be each other's best allies. In my experience, for most the existence of Bitcoin, its skeptics haven't really seen Bitcoin as a "threat." Instead, to admittedly generalize, their critiques have been mostly about Bitcoin being "broken" or "silly" or "misunderstanding the point of centralized systems", etc. These aren't really "oppositional" positions in the traditional "adversarial sense," more dismissive. In fact, the closest thing to an "active moral opposition" to Bitcoin that I've seen is an environmental one. IOW, Bitcoin true believers think about Bitcoin way more than Bitcoin skeptics do. Similarly, Bitcoin true believers really have nothing against skeptics other than... the fact that they occasionally talk shit about Bitcoin? IOW, Bitcoin skeptics are not "the natural enemy Bitcoin was designed to defeat".
But if you think about it, "institutional Bitcoin" sort of embodies something both these camps generally have hated since before Bitcoin. Whether you believe Bitcoin to be a viable answer or not, it is undeniable that the "idea" of Bitcoin is rooted in the distrust of these elitist financial institutions, that evade accountability, benefit from special treatment, and largely get to rig the larger system in their favor. Similarly, I don't think Bitcoin skeptics like these institutions or are "on their side". In fact, perhaps they'd argue that they predicted that Bitcoin wouldn't solve any of this and would just be another means of creating them. But IMO what they should both realize is that the most important threat right now is these institutional players. They are in fact, only "nominally" Bitcoin in a deep sense. From the perspective of true believers, their interests are actually in now way "essentially" aligned with any "original Bitcoin values," and from the perspective of skeptics, the threat they pose has very little to do with their use of "the Bitcoin blockchain".
They are arguably just another instantiation of the "late stage capitalist" playbook of displacing an existing government service in order to privatize its rewards. Coinbase could be argued to have more in common with Uber than Ledger wallets. Instead of consolidating and squeezing all the value from taxis though, the play is to do the same with currency itself. It is incidental that Uber happened to be so seemingly "government averse". In this context, it's actually helpful to cozy up to the government and provide the things government departments want that make no difference to fintech's bottom line (such as KYP). In fact, that might be their true value proposition. Bitcoin only enters the conversation because in order to replace a currency, you do... need a currency. Bitcoin was convenient. It was already there, it had a built-in (fervent) user base that was happy to do your proselytizing for you, and even saw you as a good "first step" for normies that couldn't figure out to manage their own wallet. The Bitcoin bubble was already there, why fight it when you can ride it?
Again, I think this is highly likely to be against the values of Bitcoin true believers and skeptics alike, and I also think that if the above is true, it represents an actual danger to us all. Recent events with credit card processors have already demonstrated that payment systems have proven to be incredibly efficient tools at stifling speech. In other words, this is arguably an "S-tier threat", on par with or perhaps worse than any sort of internet censorship or net neutrality. If so, we should treat it as such and work together.
Ahem those are #2 and #3 behind "talking to disinterested people about it".
On the other hand, doesn't all "wouldn't it be nice if it was like this?" look naive and wild before they were implemented/fought through?
Things like "Womens right to vote", "Civil rights" or even democracy was seen as completely backwards and naive at one point in history (and still is in some places), but today we kind of see it as something good to strive for, most of the times.
I'm not saying it's 100% the same for cryptocurrencies, but isn't there a chance it's something similar at least?
> nation is going to give up their self-determination because someone thinks countries having self-control
Nations do not have selves. That's taking the analogy too far. I do agree that they will definitely continue trying to exert control, though. It's kinda their thing.
I believe you, but do you have any evidence of how the prostitution kick backs work? Interesting articles?
A more egregious case than most [https://archives.fbi.gov/archives/springfield/press-releases...].
Usually it’s as simple as the cops looking the other way in exchange for ‘freebies’.
It would also be delusional to think crypto-bros will give up their self-determination to the nation-state.
It's really not. 100% of the time the nation state is winning that battle, as evidence by literally all of human history. Crypto-bros make up a fraction of a fraction of the population and most people don't have sympathy for any of them when the primary use cases of crypto today are extortion and black markets in the western world.
I don't think there's any shortage of history of people fighting the impossible, mostly getting crucified, and occasionally winning, and occasionally just existing as someone that would take the state more money than it's worth to go after.
You're expecting crypt-bros to act rationally based on utility of outcome. If they're acting ideologically there's no guarantee that will be the case.
I don’t mind seeing the crypto bros hoisted by their own orange-tinted petard.
They supported an authoritarian because they thought they could buy him off with shitcoin corruption billions. Turns out he’s still an authoritarian after he’s taken the money and done the rug pull.
They supported both candidates, and Harris kept talking about crypto in the face of everybody screaming at her that it was losing her votes. She thought being able to afford Beyoncé concerts with crypto bro cash would offset that.
Sure but now you need a $5 wrench to essentially force a guy to tell you where he buried the gold, rather than just walking to the bank and taking it. I don't see that as some kind of win for the guy with a wrench, especially when you realize the bank manager is way less likely to be a violent nutter sov-cit.
The solution is to store your money on a wallet where you do not have the private key. This way if you cannot access your funds nobody will be able to coerce you.
Their solution to that is "rot in jail for a long time, then".
Well, hopefully this will help prevent Bitcoin's biggest use case, which is criminal finance and money laundering. Why wouldn’t we want that?
For very similar reasons why the US has the 5th amendment, why blanket surveillance is not considered a good thing by functioning democracies, and why most people want their porn-viewing habits to remain private.
There are plenty of bad things that need to be prevented, but a functioning democracy requires the ability to act outside the surveillance of both your peers, and the currently sitting government.
I'm going to take a different tack on this one.
--- Point 1
Crime is real. Can we agree on that?
If you were in charge of identifying and locating criminals based on on-chain transaction data, what are the list of guidelines you'd put together to use PUBLIC DATA to determine suspicious behavior?
If you're competent, at all, the list would look like this. Let's not immediately jump to "self custody is gonna be outlawed"
----
Point 2
Bitcoin was designed this way. This data is public. This is HOW THE DAMN THING WORKS.
This article is written by a "Seasoned Bitcoiner", which is a term that reveals just how cooked they are. They haven't come to terms with the fact that the Bitcoin price is predicated on being the first, but certainly not the best public blockchain for realizing the goals of a global decentralized currency, whether you agree that's even a possibility or not.
Some people adopt ignorance -- Others were born in it, molded by it.
Following the money is important to investigating all sorts of crimes, as most crimes are done for money.
Arresting someone selling guns on the street doesn't stop much - they're quickly replaceable, you need to identify and determine where the guns are coming from. Same with human trafficking, drug trafficking, selling fake goods, and nearly every crime.
Bitcoin maximalists are learning that having a non-fungible and fully traceable ledger might be a problem. Even Satoshi called this out! As is, BTC is somewhat of a privacy nightmare. All of your transactions are on the public ledger for anyone with basic knowledge of statistics to correlate and see all of your transactions. Blockchain Analytics is big business!
All the things the Treasury is considering to be "suspicious activity" simply can't be tracked with something that's non-fungible and untracable like Monero. This suspicious activity - aka privacy - is just how all monero transactions are done.