Ban Cryptocurrency to Fight Ransomware
wsj.com
wsj.com
Ransomware doesn't magically disappears because your specific country decided to ban access to cryptocurrencies. Bad actors don't care where victims get their coins from as long as they are paid. Pushing exchanges and cryptocurrencies in general to the black market doesn't kill the system, that makes it just less visible and difficult to monitor and oversee.
Instead of this you can decide to keep exchanges around and heavily regulate them. From this point of view they are very important asset as they are the entry and exit points, you can easily define new regulatory rules, such as blacklisting addresses associated with coin mixers/tumblers and other shady tool, any address associated with criminal activity, etc.
- Environmental Reasons: Bitcoin alone is using as much power as a small country. "Bitcoin production is estimated to generate between 22 and 22.9 million metric tons of carbon dioxide emissions a year" (in 2019). A typical car emits 4.6 tons of Co2 per year. So immediately not using Bitcoin would save as much CO2 as 4.5 million cars of the road. The effort to remove that amount of CO2 through innovation or legislation is steep and faces backlash.
- Monetary Control: The US have fought hard to become the reserve currency of the world and they will not give this up without a fight. As well as monetary easing and restrictions are one of the few ways to control economic cycles, to flatten a boom or bust curve. No country will give up this power without a fight, as has been seen in Turkey, which already declared Bitcoin illegal.
- Crime and Money Laundering: I do not have hard numbers on this, but clearly cryptocurrency is being used in criminal activities and money laundering. It's like the perfect match for Columbian drug gangs who now can move money anonymously around the world without having to transport it in suit cases. The same is true for ransomware attacks. Those unmarked bills will be replaced with cryptocurrency for any competent criminal.
For any of these reasons I would already expect states to make certain cryptocurrency illegal. Bitcoin being the most important one here. I see the future of cryptocurrency in coins that are: - Locked to a currency (as in notated in US dollars) - Reasonably environmentally friendly - Traceable, with basically the same tracking as any banking transaction today.
I fully expect states will set these requirements at some point in law, once alternative coins exist that fulfill these conditions. I believe that Bitcoin will be illegal or irrelevant at some point and be replaced with better coins.
I might be wrong on this. I'm not invested in the cryptocurrency space at all and I'd love to hear why I'm wrong.
I think your points were valid when cryptocurrency first started, but now it's now a bit too entrenched to be easily squashed.
1) Many miners use renewable energy. China uses a bit of coal for mining, but recent news (or FUD) has most miners scrambling for "greener" energy. Bitcoin's energy usage is talked about quite a bit, but doesn't seem to really dissuade.
2) If Bitcoin had been started by a large organization versus grassroots - this likely would have been squashed. Instead, considering now how widespread it is, and how many politicians own crypto, along with Coinbase being affluent enough to lobby against this - this scenario now seems unlikely. However, I do agree, there will be a fight for monetary control and it may be ugly, but ultimately cryptocurrency will survive in some way or another.
3) Yes - in the beginning, the vast majority of crypto in was used for illegal reasons. Monero is probably a better use case as it's untraceable. Bitcoin has a public ledger making it much easier to track. However, the percentage of overall transactions (crypto) for illegal activities has decreased over time.
USDC is probably the best bet of what you're imagining of a crypto pegged to the US Dollar. It also allows for a blacklist of addresses known in illegal activities.
With all that being said, DeFi may prove to be a larger use case, as it's now possible to create "virtual" banks that run on code and no humans, etc.
And for example Bitcoin can very much be squashed in my opinion. Enforce all transactions to be declared above a certain limit. Already the norm for banking that will likely become a necessity for cryptocurrency transfers. I just literally can see no way that this wouldn't happen. Exchanges will need to report it. I feel this would remove a lot of speculation from the market and illegal usage and leave the mature coins. Like some of those that you mentioned.
So when I was saying cryptocurrency I meant the large amount of unregulated coins, chief among them Bitcoin. I agree that there will be coins in the future especially government backed coins or coins that are linked to those coins. But I wouldn't expect Bitcoin to be relevant in a few years.
IMO it's inevitable Bitcoin will face increasing pressure to plan a transition to PoS. Especially if Ethereum's PoS transition goes well and the network is running successfully for at least a year afterwards. (And at that time, Bitcoin's total electricity usage might be much higher than it is now, also.)
But I also predict the community and devs won't even consider the idea, and that this'll manifest as mutually escalating tension and hostility between the different cryptocurrency communities, news media, social media, etc. It's already pretty polarized, but I think it could get much worse. Especially if Bitcoin's price starts to rise more slowly or drop and Ethereum's starts to grow more quickly or surpass it.
Which would have zero net effect on climate change (total number of cars in the world is 1.4 billion). Conversely, transition all cars to electric, renewable sources and dirty bitcoin emissions still won't be a problem (assuming they can be capped at some value instead of growing indefinitely).
In other words, current bitcoin contribution to climate change is the last of our problems- for now. But I understand that the idea of such an amazing amount of energy being wasted is something that immediately triggers an innate sense of abhorrence.
Many times in climate change policy decisions has symbolism been more important than actual impact otherwise all cows would've transitioned to low methane producing food a while ago. Instead big western countries are making short flights illegal. These flights are producing no significant impact and yet they are made illegal for symbolism.
Though for Bitcoin I does trigger my own sense of wastefulness. Maybe it's jealousy.
When you make too broad arguments like this you risk losing all the benefits associated with the technology you want to ban.
Bitcoin mining is in the process of becoming greener, but it has a long way to go. Some other cryptocurrencies are moving to proof of stake or algorithms instead of proof of work, but these moves are still early stage. The environmental reason is a matter of time - given enough time and public push, all of the cryptocurrencies will be forced to be green.
Any technology will be used by criminals if it's beneficial. I do not subscribe to the 'if you are not guilty then you have nothing to hide, so give me access to all your data' policy. One of the biggest benefits of Bitcoin in my mind is that it is a currency not tied to any given world power.
Cryptocurrency is almost, but not quite, at the alcohol level. Prohibition made alcohol go underground and secret, and not much of a secret. Criminalizing Bitcoin will do the same. Also, what about legitimate people who have invested in what was a legal thing, do you tell them 'Sorry, you are now out all that money?'. That seems a great way to ensure you lose the next election, if there are enough people who have invested (and in my surroundings there are more and more traditional middle-class families investing in cryptocurrency).
Disclaimer: I own a fair bit of cryptocurrency.
A lot of things are banned because its negative externalities outweigh its benefits, regardless of how the public uses it (ex. drugs, money laundering, human trafficking, pedophilia, etc). As a call to your conscience, even if you don't directly participate in those activities (in for the money), would you be ok knowing that you are complicit?
The evidence is pretty clear on the direct link of cryptocurrencies to organized crime, no matter how the tech industry (which controls the media) slices it.
Don't underestimate the Fed, they usually move slow to gather evidence against any case.
As for the invested, once corpses pile up, they will flee: https://news.ycombinator.com/item?id=27275189
There is no more a direct link between cryptocurrencies and organized crime than there is between matches and arsonists. The fact that one can be used as a tool by the other is not an indictment of the technology.
*Carefully examine the bias and incentives behind these comments, oppositions in this thread seem to be from people invested in cryptos.
People also censor information that run against its views (this will be downvoted)
Is there something I said that you would claim to be untrue? If so please present your counter-evidence instead of making baseless ad hominem attacks.
It doesn't matter how biased someone is if they're still correct.
But that all being said, the ability to trustlessly transmit value is, in my opinion, already more beneficial than any negative externality associated with any cryptocurrency. Indeed, the very reason that criminal enterprise has adopted cryptocurrency rather than just bartering illicit materials is specifically because the technology is useful for so much more. I for one would much prefer two consenting adults to exchange drugs directly rather than going through an organization with advanced money laundering operations which undoubtedly begets more frequent and more violent crime. All those complaints crypto-fanatics have about legitimate financial institutions apply just as much if not significantly more to illegitimate ones.
But while I believe that to be true, that's not a hill I'm willing to die on. Getting back to the conversation at hand, my point was that, unlike human trafficking or pedophilia which are evils unto themselves and should be banned even if they produce the occasional beneficial byproduct, technologies like cryptocurrencies or the internet are tools which are not inherently bad and which we all use despite the capacity for abuse. Using a baseball bat to break kneecaps does not make baseball bats evil, and the idea that baseball should be banned to prevent the misuse of baseball bats ought to be considered absurd. Trying to regulate something which is at most a loose proxy for the problem you actually want solved leads to numerous problems in practice [0], but it is also wrong in principle to freedom and prosperity to the many because you are incapable of dealing with the abuses of the few.
By that reasoning anyone that uses paper money is complicit in cocaine use, because a 2009 study showed that between 85% and 95% of all US paper bills have cocaine on them, in some states averaging as high as 20 nanograms on individual low-denomination bills (it takes 150 nanograms in your system to test positive for cocaine).
Almost any technology, including Tide Pods, can be used in the argument anyone that uses and supports a technology for legal uses is complicit in illegal uses of that technology, rendering the argument meaningless. You may use Peer-to-Peer technology, does that mean you support piracy?
Many seem to me to be attacking BitCoin and other cryptocurrencies in total rather than attacking the aspects they hate. For example, anonymity is not innately tied to cryptocurrency, just tied to most of the current implementations.
I guess the author might also want to propose just banning breaking the law while we're at it.