Comment by throwanem | Hacker News Reader

Comment by throwanem | Hacker News Reader

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For a reason which, standing on a train station platform as I was, I failed to note in my prior comment: anonymous, untraceable money transfer not only makes it easier to conceal crime, but acts as a uniquely powerful inducement to same. Making it possible to contract a murder, for example, in perfect forward secrecy, removes a significant deterrent against doing so at all. One may hasten to argue that such things are already possible today. They are. They are also quite difficult to achieve, which need not be the case with effectively anonymized cryptocurrencies.

Further, that which facilitates the contravention of a nation's laws, in a way which renders detection and prosecution of the crime effectively impossible, is of its nature a direct attack on that nation's sovereignty. No government which wishes to maintain its power intact can long suffer such an infraction. I suspect that's why the toplevel commenter who started this thread spoke in such fashion. Bitcoin dodged one bullet already in the fallout from the Silk Road debacle. This looks like it might be another.

> Making it possible to contract a murder

Paying criminals was possible before cash was invented, and it will continue to be possible into the future. We even have movies that have hitmen being paid in gold, diamonds, favors, and other exchangeable assets as major plot devices.

> difficult to achieve

Our ancestors successfully exchanged goods and debt thousands of years ago. I doubt modern humans will have any difficulty inventing new non-cash methods of paying for services.

This isn't theoretical, because we already see soap and other easy to fence goods used as exchangeable assets.

https://priceonomics.com/why-thieves-steal-soap/

    Products like cigarettes and soap are appealing because they can
    perform some of the major functions of money. Since there is a
    consistent demand and market for them [...] they retain their value.
    [...] Since they have standard sizes, they can also be used as a
    unit of account. [...]
    
    In areas where fences or other buyers are always willing to purchase
    stolen products, soap is just as good as money.

This concern about the anonymity of cash is propaganda. While everyone is concerned that a few poor or middle class people might get away with laundering petty amounts of money, the real thieves move far larger amounts of non-cash, very trackable money to corrupt politicians and offshore havens.

>>This isn't theoretical, because we already see soap and other easy to fence goods used as exchangeable assets.

How about scaling it? Do you wanna carry a lorryful of soap/cigarettes to buy an iPhone or how? One odd person may still choose to do so and one odd seller may accept such a payment. But it is sufficient just to imagine millions of people doing it tens/hundreds of times a day/week to understand how it becomes not only weird but also almost foolish.

e.g. going to on a picnic, carry a truckload of soap/cigarette packs to pay at airport, hotels, restos and so on and hope that there are enough people out there to accept payment using such goods.

Anonymity or not, the other important properties of cash are flexibility, versatility, convenience and unparalleled liquidity. Economics 101.

Hey, I'm not asking you to like or agree with what I'm saying. I'm just pointing out that, if I were a Bitcoin guy, something like this would make me super nervous.

That's because something like this makes it super easy for any government that wants to to say something like "Look. We've already seen that Bitcoin is heavily used in criminal activity, everything from drug deals to contract murder to traffic in child pornography. Now we have people building technology around Bitcoin to make it impossible for law enforcement to tell when it's used in those crimes and others, and also impossible to use Bitcoin transfer records as evidence in prosecuting the people who commit them. It's time to acknowledge the truth about Bitcoin. It's not a currency. It's not a new form of money. It has no legitimate purpose. It's just a tool for criminals to get away with their crimes."

Please don't waste your time and mine by arguing with me that this is deeply tendentious, inaccurate, unfair, unjust, against privacy, immoral, and fattening. For the sake of us all getting on with our lives, I freely concede that it is all those things. Does it matter? As I've already pointed out, what we're talking about here is something that will get right up the nose of pretty much any government in the world. Few governments are notably sympathetic to the rhetoric of privacy absolutism. I think it would behoove those with an interest in Bitcoin to consider how they might respond, more persuasively and usefully than such rhetoric can manage, in the event the US government (for example) proves not yet too spavined to muster some backbone in reacting to the idea of untraceable Bitcoin transfers.

(As an aside, it's things like this that are a big part of why I keep my money safely away from Bitcoin. It's technologically impressive, to be sure, and someone is going to do something amazing with a blockchain someday. But Bitcoin also shows a very strong tendency to attract people who are comfortable addressing a wide range of subjects, from the way governments work to the way money works to the way information security works, purely on the basis of wishful thinking. This makes things exciting! SpaceX's static test yesterday got exciting, too. Such events often strongly reward observation - ideally from a long way upwind.)

> For a reason which, standing on a train station platform as I was, I failed to note in my prior comment: anonymous, untraceable money transfer not only makes it easier to conceal crime, but acts as a uniquely powerful inducement to same. Making it possible to contract a murder, for example, in perfect forward secrecy, removes a significant deterrent against doing so at all. One may hasten to argue that such things are already possible today. They are. They are also quite difficult to achieve, which need not be the case with effectively anonymized cryptocurrencies.

There's overwhelming evidence at this point that deterrents have little-to-no effect in crime prevention, so this argument falls flat before it can begin.

> Further, that which facilitates the contravention of a nation's laws, in a way which renders detection and prosecution of the crime effectively impossible, is of its nature a direct attack on that nation's sovereignty. No government which wishes to maintain its power intact can long suffer such an infraction.

This is a ridiculous assertion. Anonymous money doesn't defeat armies, or redraw borders, or overturn laws. Cash has existed for literally thousands of years and many sovereign nations have risen and fallen during those times.

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