India to propose cryptocurrency ban, penalising miners, traders -source | Hacker News Reader

India to propose cryptocurrency ban, penalising miners, traders -source

reuters.com

65 pointspseudolus57 comments

The recent interview with Nirmala Sitharaman, the current Finance Minister of India, claims otherwise in an interview given yesterday.

Here's the interview: https://youtu.be/kHYQ730R-aA?t=1855

So I don't know who's more senior than the FM of India that Reuters is getting their info from.

This is pretty much the argument I always made to crypto evangelists who touted cryptocurrencies as existing "outside the reach of government": governments can pretty much make anything they want to illegal.

Yes, on some level this would be basically impossible to enforce (you could always transfer your currency to a new "brain wallet" where you just memorized the key words), but on the other, it would mean actually buying anything with crypto, or exchanging it to fiat, would put one at great legal jeopardy.

Again, this only really applies if they catch you. I agree with most of what you're saying, but a law like this presupposes that their government can catch you while exchanging it, which is pretty damn hard with most crypto. This is one of those "broken tail-light" laws like piracy, where they basically use it as an excuse to double-charge criminals who get caught transacting with dirty crypto.

Technology rarely wins against policy. The government can and does use force. It’s no skin off their back to lock you up for a few years of they suspect you’ve got money you’re not “sharing” with them.

In America all they have to do is ask you if you have crypto, and you tell the truth or risk going to jail.

I'm not sure what you base "Technology rarely wins against policy" on. There was a huge war on drugs in America, but people figured how to grow pot indoors, and the dark market thrived, you can even buy drugs off the internet and have it delivered to your home.

You mean, gangsters thrived. You'd you want to be a gangster?

I will not be, but some people might. Please consider the history of the world.

In a world where that simply means being able to flee with your assets, yes. I wouldn't want to be anything else.

Did you read the article?

"In India, despite government threats of a ban, transaction volumes are swelling and 8 million investors now hold 100 billion rupees ($1.4 billion) in crypto-investments, according to industry estimates."

All they will end up doing is push crypto into the dark markets. They simply do not have the capacity (or are sophisticated enough) to go after the crypto holders.

Without a fiat off ramp trading crypto becomes less attractive as a speculative investment.

People have always been able to trade illicit products. The biggest example is drug trafficking. Would you like to become a drug trafficker? Similarly, you may be able to buy cryptocurrency, but if the government doesn't want it you'll be a law breaker.

I will not, but some one will and they'll sell it for a premium [1].

1: https://www.nasdaq.com/articles/bitcoin-is-trading-at-a-46-p...

One key difference is drugs are physical products, you can be "caught" with it, whereas cryptocurrency is completely virtual. Unless you're caught at exchange time, you could be walking around with millions of dollars worth of crypto around and no one would know.

You could use the same argument for digital piracy. There’s countless examples of people who have been caught and penalized for piracy.

PC you use to transact is physical too. Your Internet can also be traced. In China, accessing wiki gets you prison time even though the users use VPN. Graphics cards for mining can be taxed very high. Kiddy porn is a better example here instead of drugs. You could be walking around with trillions usd in the form of diamonds. And yet if you're in a desert you are likely not able to use it and die of thirst. In everyday live you need liquidity. Governments ensure liquidity legally. Crypto can't. At best it is like rare baseball cards collections that you need to specifically find buyers that willing to pay for it through specialized locations (which governments can control). Pro cypto arguments are out of touch with realities. They basically banging on government will accept it. It is basically like hoping Myanmar will back off after seeing protestor. In general direct firing to kill should be expected and proven to work. Expecting government to give the ability to print money is very naive.

You could always run your transactions from a VPS in another country. Sure that won't work in China but India hasn't quite reached that level of totalitarianism.

Yeah and the bottom really dropped out on the drug market when the US criminalized it... oh wait, no the opposite happened.

That can't be compared. Drugs are addictive, which makes the decision to stop hard.

Legislation has been shown to work in nations which outlawed weapons for example.

Think of all the Jewish gold the Nazis wouldn't have stolen, or even detected, had it been converted into crypto with a passphrase. You buy it covertly when trouble looms and cash it in once in a safe country.

The big problem is government is trying to block, capital flight, can't be stopped. Hopefully this eliminates some of the governmental excesses as they lose their monopoly powers, even if only slightly.

Haters: It's not my fault if you don't know your history. Jews were an attractive scapegoat because they were rich. If they suddenly didn't have any money they wouldn't have been worth 1/10th the effort. If they could have taken their assets across the border covertly they could have fled sooner and with a guaranteed safe landing spot. I know people whose family didn't flee (and died for it) because of trying to protect the family legacy.

“ The senior official told Reuters, however, that the plan is to ban private crypto-assets while promoting blockchain - a secure database technology that is the backbone for virtual currencies but also a system that experts say could revolutionise international transactions.”

Flashback to a couple years ago when “blockchain experts” proliferated to attempt to apply the technology to seemingly every domain, benefit or no.

Ooh doesn’t this provide a legitimate reason to hold Monero? So maybe this will expedite crypto currencies that are intentionally difficult to track.

This is exactly the perfect use-case for Monero. A transparent ledger (like BTC & ETH) could very well lead to serious legal trouble.

Unfortunately, fiat on-ramp/off-ramp will still be an issue. Not impossible to overcome, but certainly a huge hindrance to crypto adoption in India.

The problem with Monero is the lack of auditability (of token supply), no one knows if there was an accidental bug in the code that is inflating the supply.

We indirectly do know. How does an inflation bug get created? There's either a big in the underlying theory, or there's an implementation bug.

Both of those aspects (theory & implementation) have been audited multiple times by some of the foremost experts in cryptography.

afaik that's zcash not monero. monero works like most other blockchains except it has decoy inputs/outputs, but at the end of the day inputs=outputs so it's trivial to verify no inflation happened.

> Unfortunately, fiat on-ramp/off-ramp will still be an issue.

It's a huge problem but not for the wealthy.

This is the 10th time in 3 years I've read this story. It won't be banned.

https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...

Is a major reason why Indians should trust crypto more. The government can't just make their crypto worthless literally overnight.

That's also an argument for why the government should support btc/blockchain technologies, instead of banning it. Transactions can be open for everyone to see, and therefore easier to audit/account for unaccounted cash and if they're being used or not.

yes, except for when it's fraud to hide illegal government trades.

https://www.wired.co.uk/article/venezuela-petro-cryptocurren...

https://news.ycombinator.com/item?id=25970101

Seems like a sign crypto might actually welcome. “First they call you fools then they call you an enemy” or something like that.

https://astralcodexten.substack.com/p/trapped-priors-as-a-ba...

Elizabeth Holmes, a few weeks before the collapse of her ponzi fraud ?

Comparing bitcoin to Theranos is just silly.

Related is how mining operations are hunted down in Abhasia. Hitting at mining, the backbone of cryptocurrency decentralization and independence, is an interesting approach in taking crypto under control (the PoW I mean as the PoS is much easy for governments to control naturally).

PoS is not as good as you make it seem. It will create an unbalanced system where the "rich" people get to control the system, this is not what bitcoin is about.

And it'll make a currency easier to control by the authorities. With Ethereum if the feds seize someone's coins they can stake them easily, and with a few seizures could easily have a plurality of the power without spending money.

On BTC to control the network they'd actually have to consume more than half as much electricity as Sweden to do so which would be much easier to detect and interfere with.

India's government is due for a reckoning. The reckless behavior of their conservative representatives has crossed several lines, and I'm surprised more people aren't talking about it. If they don't correct course, I think they're going to become even more hermited than they already are, which only gives their government more power to oppress theological, racial and political minorities. Hindu nationalism should be stopped before it causes more harm than it already has.

How is this related to Hindu nationalism?

It's a demonstration of the power that conservative and traditionalist interests hold in India. Just this month they threatened to arrest Twitter and Facebook employees for not censoring their platforms, so hopefully this helps foster a discussion about the political happenings over there.

Being conservative does not mean being a hindu nationalist

I'm not sure why you're trying to refute this.. I don't think Modi & co themselves would deny they're Hindu nationalists

Sure, but being a Hindu nationalist does make you a conservative.

More people aren't talking about it because they don't know or understand what is going on. I only know about the Indian governments corruption because I worked with an Indian programmer who would talk about it. The majority are busy trying to keep up to date with what their own government is doing.

> Hindu nationalism

Bad policies are not Hindu Nationalism. Also, the electricity is very scarce in India, most villages doesn't have 24h power and even big cities sometimes have issues keeping the lights on. With this in mind, banning mining is not a bad idea at all.

Oh, there is unquestionably at least a tinge of Hindu nationalism with Modi and company. As another commenter said, I don’t think they’d even deny it.

fwiw, mining would bring foreign currency where keeping the lights on at night does not. That would then allow spending on - keeping the lights on at night.

> With this in mind, banning mining is not a bad idea at all.

Well, laws you can't enforce are always a bad idea. And laws with a stupidly disproportional effect. Mining is trivial and requires no on-ramp, so you'll never catch the miners - they can decentralize easily, with one mining rig in each house. What you'll do is cripple the little guy who wants to spend $50 of BTC he earned online.

This is huge. India is 6th largest economy in the world and 3rd largest by purchasing parity.

No it's not huge

Indians will keep their crypto, and wait for either 1) the supreme court to strike down this law 2) a new government to repeal this law.

The cat is out the bag. Politicians in every country like money. They will try to appeal to the populace by pretending to fight crypto ("it's bad for the environment!") while knowing its advantages and trying to keep them for themselves

Yeah, I can picture the dude trying to make the national grid something else than a bitcoin input stream...

Crypto isnt bad for the environment, it s more terrible for energy efficiency. I d rather spend what miners spend on an entire justice / police / law system to ensure contracts are trusted and enforced.

The one thing that is sure here is that when people try to collect on their newfoubd wealth, there might be some price pressure making everyone poor again.

How can you convert excess electricity from a hydroelectric power station (which the downstream grid can't handle) into energy for justic/police/law systems? I'm curious.

>”excess electricity from a hydroelectric power station”

Amazing, the excess is the same size as consumption in Sweden.

https://cbeci.org/cbeci/comparisons

power generation is a local phenomena, there are many such stranded/renewable sources of energy.

I recommend reading this article: https://www.coindesk.com/frustrating-maddening-all-consuming...

And to try and control their monetary policy. They mostly fear what can happen to their central banks of crypto takes off and they don’t have a “handle” in it.

Sure it won't change for individuals but if you're a business and want to accept Bitcoin, it will be flat out illegal.

Many businesses are moving to digital only.

A digital-only business accepting only crypto will avoid taxes AND have it hold appreciate.

Personally, I'm waiting for an crypto-based onlyfan: it's the perfect niche: performers will decide if they want to convert to fiat, or keep their hold for purchases the government may dislike (like drugs: dead drop are an ideal use of crypto) or cashing it abroad like in lavish amenities that cater to a lucky few and only take crypto (yes, they already exist, and I can only predict them becoming more accessible)

There is a parallel economy emerging. You can deny it, but it's happening.

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