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Comment by jaredtn | Hacker News Reader

If your coin can be sued by the SEC, then it's probably not decentralized.

If it thought there were grounds to do so, the SEC could take on the major BTC exchanges.

Losing a means to convert to/from fiat currencies would drive away the vast majority of BTC traders, and possibly cause something of a bank run upon the announcement of SEC action against them.

I mean, let's be real here, the vast majority of BTC transactions aren't for goods or services.

SEC deals with securities, bitcoin is not a security according to them. Ripple(XRP) is.

It's a thought exercise, not a serious suggestion that it might occur, hence "if it thought there were grounds to do so." I'm imagining how a Government with sufficient power might go about crippling the value of BTC.

A single government can’t do it, which is why bitcoin still exists.

The US could cripple bitcoins value quite easily by sanctioning exchanges. The main power it would have to enforce those sanctions would be to cut off any institutions that violate them from handling USD. This is how the US manages to do stuff like force French banks to uphold US sanction on Iran.

https://www.wsj.com/articles/bnp-plans-to-slash-dividend-sel...

That wouldn’t eradicate Bitcoin or anything, but it would make it far less useful than it is currently, and have a significant impact on its value. It would also be a pretty bad idea, because the power of US sanctions is largely derived from demand for USD, and political volatility puts downward pressure on that demand, so you generally don’t want to waste it on frivolous sanctions.

A single government can easily block it in country — nobody needs or wants Bitcoin, they want to buy things and that can be attacked by targeting whoever participates in the network. Bitcoin is designed to make this extremely easy since that public ledger means they can go after ever transaction you’ve ever made at any point in the future, not just at the time of transaction. Unless the government is incredibly corrupt and powerless nobody is basing a black market on a system which giftwraps your transaction logs for prosecutors.

A government which participates in international banking coalitions or treaty groups can use those relationships to go after transactions internationally, too. Think about how drug cartels have secret bank accounts frozen, and then about how Bitcoin is designed to make that easier by giving the authorities a full list of your activities which is trivially extended to every partner. Once you’re on that list, everyone you know will be getting pressure to turn on you.

Now think about a major government: they can not only use normal law enforcement but also control the exchanges themselves with things like anti-money laundering laws. Someone might choose to blow off demands from a small country or a pariah state like Iran but if the US or EU decided to act everyone involved is now facing things like not being able to fly internationally or do business with most major companies. Since they have no upside to resisting and it’s trivial to block Bitcoin transactions, anyone in those jurisdictions is unlikely to risk that protecting a stranger in a different country.

Until they are. Mining equipment for BTC is already effectively monopolized by one vendor and they are likely doing significant mining behind the scenes controlling much of the market.

>and they are likely doing significant mining behind the scenes controlling much of the market.

I don't get it, how does "controlling much of mining" allow them to control the market? It does give a bunch of bitcoin to play around with, but it costs money (electricity, manufacturing costs) for them to mine them, so depending on their margins they'll be less impactful than a whale who loaded up on cheap coins a few years ago.

the SEC shutting down centralized exchanges would be a short term shock to the value of BTC but long-term would be a disaster for regulators.

Decentralized P2P exchanges exist(bisq/hodlhodl), and shutting down centralized exchanges would force people to use those as the on/off ramps.

The best way for regulators to fight bitcoin imo is to slowly assimilate it into the legacy finance infrastructure to the point that it becomes similar to gold reserves, something only central banks and large institutions hold, while the public might only hold IOUs. Similar to what paypal is already doing.

You can walk into any major bank in the US with tens of thousands in USD cash, deposit it via deposit ticket with no ID, and have anonymous bitcoin/ether/monero in your account within minutes.

Is this actually true? I find it very hard to believe you can do anything at a bank with tens of thousands of dollars in cash without presenting ID.

The scenario isn't a problem I've ever had, but it doesn't make any sense. Unless you say, I want to deposit this money into account 12345.

I still maintain that if the government truly wanted to regulate cryptocurrency they would go after average citizens and add onerous reporting requirements. Even with decentralized exchanges, the government can still find a way to clamp down on citizens using cryptocurrency. Sure, it would be impossible to prevent someone from using a decentralized exchange, but would you personally risk being prosecuted for doing so?

They are blatantly claiming centralization is a feature in their defense.

https://twitter.com/VitalikButerin/status/134121951954555699...

You can't have it both ways. If you're centralized, you must be regulated as such.

They aren't suing XRP

Ripple is the central operator of XRP.

They absolutely are suing XRP.

It's hard to agree or disagree as decentralization doesn't have a clear definition. It is decentralized, but not to the point of making it censorship-resistant.

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