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Comment by theseatoms | Hacker News Reader

The long-term value will be in the ability to send censorship-proof funds anywhere there's an internet connection. The Lightning Network (yet to be deployed in production) is supposedly going to reduce transaction fees and confirmation times.

>but isn't centralized wallets/exchanges like coinbase defeating the entire purpose of crypto currency

This is true. This is my biggest problem with the current ecosystem. If history is any guide, they'll eventually suffer from some sort of scandal and/or run that drives customers to a superior competitor. This only kicks the can, I realize, and is far from the original vision. But at least each centralized service learns from the costly mistakes of previous ones.

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I don't understand how this holds true though, because to actually send someone money you need to actually... get them the money. A great counter-example of this is that the exchanges in Zimbabwe were trading at a 100% premium when you actually wanted to settle a transaction in cash.

So whilst you can transfer money censorship free, you and the recipient need to then handle the transfer into and out of crypto which seems to be in many cases more difficult than actually transferring money other ways.

Not to mention the fact that that purpose is an astonishingly niche thing to want to do - at least in first world countries.

Are you suggesting crypto has no long-term value in the west?

Does purchasing goods or services directly with bitcoin count as "handl[ing] the transfer into and out of crypto"? Doesn't "crypto" then simply become "money"?

Don't get me wrong. That vision of the future isn't here yet. Far too few vendors accept bitcoin today for it to be a viable closed loop system.

Nobody's going to be using crypto for direct purchases when you still have to pay taxes in local currency and the friction to get cash from crypto is just as high as today's friction in interbanking transfers or worse.

I see this argument about censorship resistance a lot but I don't really understand it. If the main purpose of the technology is to evade law enforcement is this not a massive reason for governments to ban cryptocurrencies? The user of the technology is presumably committing a crime.

I'm certainly not an expert in this domain, but how exactly would a government ban bitcoin? Is it possible to do without banning the Internet? Governments can eliminate centralized services like Coinbase. But that only makes Bitcoin stronger as OP indicated.

You can't 100% eliminate speeding or child poverty or drugs or car accidents or corruption or gambling or unsafe working conditions or prostitution - but that doesn't stop governments trying for a reduction.

Oh, I'm pretty sure that governments will try to ban bitcoin, given that it gets more traction as an actual medium of exchange. I'm trying to assess if they'll succeed, and if so, "how?"

Ban Bitcoin, but leave the futures exchange and taxes. OK.

Step 1: eliminate centralized services. This would only make Bitcoin stronger if it's already a functioning economy that doesn't depend on connections to the existing financial system. If you can't buy and sell Bitcoin with traditional currency, it becomes far less practical.

Step 2: make use of Bitcoin illegal. You know, "ban" it. It's a plaintext P2P protocol, not exactly magic. If you control the network, you can identify Bitcoin nodes and charge their owners, exactly how law enforcement can enforce laws against other illicit P2P traffic. This would drive any remaining die-hard users to services like Tor.

Step 3: if Bitcoin is somehow still popular enough to be considered a problem, block Tor.

Helpful. Thanks.

In this scenario where your Government is doing this do you leave? Subvert? Comply? If your answer is comply, congratulations for your obedience.

Would love to understand the rationale for the down voting here. It would seem to be that the suggesting of disobedience to Government is immediately wrong.

“One has a moral responsibility to disobey unjust laws.” ― Martin Luther King Jr.

You may misunderstand how laws work. The government can make anything illegal. (Within the constraints of the various checks and balances, but those mechanisms do not turn quickly.)

The most obvious way is to make it a crime to exchange bitcoin for USD, goods, or services. (Doesn't even have to be bitcoin specifically; they can say "blockchain-backed digital resources" or whatever.) Scope it under interstate commerce, in the US; who's going to stop them? Obviously that wouldn't kill BTC overnight, but it would kill any legitimate market. If they're really worked up they can compel financial entities to disclose or block payments to/from known BTC exchanges, or compel telcos to do the same for blockchain mining traffic. They could even ban owning bitcoin; delete your keys or you're committing a felony.

How wouldn't they ban bitcoin, really?

Well when you put it that way...

In that scenario I suppose bitcoin's only hope would be that the countries of the world wouldn't coordinate to enforce a global ban. Seems unlikely that they would. But, back to your point, a total US ban might be enough to eventually kill the ecosystem.

Not necessarily. Online payment is currently mediated by a few large companies, the largest of them having their headquarters in a single country. There have been cases where these companies made things difficult for certain classes of sellers (for instance, erotica/pornography), or where pressure from that country's government made these companies block all payments to a specific recipient. In these cases I have read about, the person making the payment (and the person receiving the payment) would be breaking no laws.

There are 100 lightning nodes running in production currently.

I stand corrected.

"The long-term value will be in the ability to send censorship-proof funds anywhere there's an internet connection."

So, how does this work if I'm, say, trying to support the protests in Iran, who just shuts the internet off?

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