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Comment by seibelj | Hacker News Reader

Cryptocurrency and blockchain are regulated when a true corporation appears, but there exist many entities that are wholly anonymous and unregulated because they simply don’t exist outside of software and the blockchain.

A prime example would be Bisq[0], which is a decentralized exchange that also has a profit-sharing token. If it were a company it would be violating trillions of regulatory laws, such as security and money laundering as its exchange token is obviously a security and it has no KYC, but there is simply nothing to shut down.

The government likes to believe that they have a handle on cryptocurrency but the truth is there is a thriving and growing suite of tools that exist to explicitly be uncensorable.

[0] https://bisq.network

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I think things like bisq would be pretty easy to shut down of the government wants to, because fiat transfer is always government controlled.

Step 1: make a law declaring it illegal. Step 2: have undercover cop attempt an exchange, then arrest/fine the other party. Step 3: repeat until no one wants to exchange anymore.

Sure, it wouldn’t be fully effective - the illegal drugs are still around, after all - but it will be annoying enough that all legitimate uses will disappear.

Yeah, many cryptographers forget about the XKCD “hit him with this $5 wrench” approach that governments can take.

Wouldn't this approach fail if there becomes a mainstream cryptocurrency, let's say Libra for lack of a better example. Where you can keep converting and switching wallets (laundering) or just buy something that has no ties to you and it would be hard to track?

Like you rightly pointed out, the govt control over fiat, but that control is continually being threatened every day

A hypothetical Libra-like thing will be even easier to control. There is a single developer org - and it can be trivially compelled to add trackers, blacklists, backdoors or whatever government wants.

It looks like bisq is basically a clone for localbitcoins. To do a trade, you still have to send USD back and forth via paypal, ACH, etc. It seems like you'd run into the same money changer law violations that have been used to nail LBC users in the past.

I do however agree with you that cryptocurrency is a genie that the government doesn't quite understand yet. I think that cryptocurrencies are going to do for finance what the internet did for the way people communicate with each other. The entire financial system is going to be replaced.

Major difference is they do anonymous cross-chain swaps using multisig escrow. So you can change bitcoin into Monero (a fully anonymous coin) without any intermediary. This makes it extremely valuable if you operate in an economy that never converts to fiat, or does so as little as possible.

This is interesting. Any recommendations as to what to read to dive deeper into this topic?

I have lots I can recommend, but what are you most interested in learning about? Do you have any prior understanding of blockchain protocols? For example, I can link to interesting papers and documentation on Bitcoin, Monero, etc.

When did they add monero validation? Last time I used it all non btc transactions were using a human arbitrator.

Yea, I generally understand how Bitcoin works. More interested in learning about anonymous cross-chain swaps using multisig escrow.

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