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Comment by JumpCrisscross | Hacker News Reader

> If we're going to Patriot Act the crud out of ransomware, Bitcoin is gonna be illegal

Terrorist financing is illegal. Cash is not.

Sure. But running an exchange where USD goes to terrorists - or, indeed, where you can’t show that USD does not go to terrorists - is highly illegal.

If ransomware gangs are directly or indirectly targeted by OFAC, that would have massive ramifications.

> running an exchange where USD goes to terrorists - or, indeed, where you can’t show that USD does not go to terrorists - is highly illegal

Doesn't existing anti-terrorist financing (ATF) law cover this?

AML, SDN lists - yes, all that is in scope. But enforcement has been uneven: it’s so far been about making US exchanges comply with KYC laws. Nobody has really gone further.

What happens when a company is a victim of a ransomware attack and OFAC puts the extortion wallet on an exclusion list?

> What happens when a company is a victim of a ransomware attack and OFAC puts a wallet on an exclusion list?

That wallets gets tainted? Its coins become less valuable? Marked wallets have been an obvious thing coming down the pipes.

The risk isn’t just to the person holding the wallet: it’s the risk of OFAC sanctions hitting the exchanges that takes dirty BTC and pays USD.

So now, know your customer turns from “be sure I don’t send USD to a specially designated national” to “be sure I never accept crypto from a burnt wallet.”

Except you can't choose whether you accept or not - the transactions sending BTC into your wallet are not at your discretion, you can't 'reject' them.

Cash is a solution to the problem of portable assets. Bitcoin is a problem in search of a solution.

> Cash is a solution to the problem of portable assets.

Barely. The portability usually ends at country borders.

> Bitcoin is a problem in search of a solution.

Don't you mean "a solution in search of a problem?" Nice Freudian slip, though :)

I thought being a solution in search of problem was perhaps too charitable. Every joule we waste on hashes is another gram of carbon in the air. And it is all waste — the only problem cryptocoins solve better than other solutions is illicit transactions. It’s not even close to as anonymous as cash.

Coinage used to be more portable in the days of precious metal coins. But honestly I’ve had very little barriers in converting cash. It’s a solved problem.

bitcoin and related systems are a solution to the double spending problem. Perhaps a flawed solution based on the information we know now, but it is a solution nonetheless. some related systems such as monero, zcash, and GNU taler make attempts at ensuring spender privacy, like cash.

but the computational power is nessisary for the network to function in a manner that is provable to new nodes. Because you can use a digital signature to confirm a transaction happened after some time, but not before some time.

I don't think cash is a solved problem within the context of computer networks. If I could transfer money using a program by using a digital signature, I would be satisfied, but anyone who can get access to my credit card numbers (and name, billing address and other open source info) can make purchases in my name. And you of course must rely on the fractional reserves of some central entity.

Try taking $10,001 in cash into the US and tell me that again

or take that and deposit $5000 of it today and $5001 in a week ;)

> Try taking $10,001 in cash into the US and tell me that again

You have to declare it. You’ll probably get follow up questions on how you got it and why a wire doesn’t work. But otherwise, large quantities of cash transit the U.S. border all the time.

The majority of the uses of cash are legal. The majority of uses of Bitcoin are criminal. And bear in mind, Bitcoin hasn't just been a boon to ransomware, it's been a strategy to evade financial sanctions by countries like Iran: https://www.reuters.com/technology/iran-uses-crypto-mining-l...

So there's a lot of reasons the US government just may find themselves happier without it.

There's a difference between a proposition one can pull out of an orifice and a proposition one can defend in court.

>the majority of uses of Bitcoin are criminal Citation badly needed.

Do you have a source for your claim that the majority of Bitcoin uses are criminal? Research by blockchain analysis companies show that only a small percentage of Bitcoin usage is illicit [1][2][3].

[1] https://www.elliptic.co/resources/typologies-concise-guide-c...

[2] https://ciphertrace.com/2020-year-end-cryptocurrency-crime-a...

[3] https://blog.chainalysis.com/reports/2021-crypto-crime-repor...

Criminal? Maybe in 2013 Silk Road days.

There's a ridiculous amount of volume on Bitcoin and it's mostly moving to and from exchanges. There's no way a majority of those are illegal.

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