Well I don't understand why I'm being downvoted then.
I very much agree with you, although for some amounts it isn't too hard to get a wallet funded without resorting to block mining. For example, meet up in person and buy with cash. Not tenable for hundreds of thousands or millions of dollars in a hurry, but certainly possible for tens of thousands, which is what most unaffiliated low level drug dealers want (so they can buy drugs via Tor and resell them in person for cash).
The thing is, most people fail to appreciate that security and privacy is a continuum. Just because the NSA could figure out who you are if they were highly motivated to do so, doesn't mean that Immigration Germany can, and when you have prostitutes getting human trafficked through employment visa programs, Bitcoin is a whole lot more private than banking. And if you know you are on the other side of an NSA level attacker, then it is still possible to maintain privacy, it's just exceptionally unpleasant and slow.
But once you have the private nodes set up, it's the easiest way of moving hundreds of millions of dollars across boarders. This is why I think it's going to be made illegal. Big gangs have some smart enough cyber guys and they'll use Bitcoin as a shadow banking system. But right now what gives Bitcoin its intrinsic value is greed: People think it might be the currency of the future and they rightly deduce that it will dramatically increase in value if it is. If governments uniformly ban transactions with cryptocurrencies this will collapse like beanie babies.
This is what I think will probably happen, although it is possible that governments try to get in and semi-regulate it enough to stop its usefulness by organized crime.
> I personally choose not to take the offer because I don't do anything illegal
Seems to be implying that those who do choose to "take the offer" and pay for things anonymously _are_ doing something illegal. (E.g. The "nothing to hide" argument.)
Obviously that statement wasn't central to your point, but it likely rubbed a few people the wrong way regardless.
(I did not downvote, you raised a valid point that I responed too. Though your postsounded a bit like the "I have nothing to hide" argument, which has been debunked many times before.)
Currently the easiest way to regulate is at the entry and exit points, i.e. the exchanges. Taxes need to be payed in fiat and you will need to explain where that fiat came from. No need for governments to do anything on the blockchain.
In my limited experience with regulators (mostly in Europe), I found that they actually rather like the idea of a more democratic financial system. Their primary concerns are human trafficking, protecting citizens from scammers and collecting taxes. I was honestly pleasantly surprised by their progressive attitude.
I wrote a blog post about wanting privacy back in 2008 that went hyper viral, I'm familiar with the arguments and used to believe in them fully.
I don't anymore. Not to the libertarian extreme that most people associated with Bitcoin mean. Maybe in the European context (right to be forgotten) where you functionally have privacy, but law enforcement can issue court ordered warrants to stop crime.
I've seen too many evil people do evil things with their money. I'm not allowed to talk about the specifics, but I've advised some organizations on how to deal with organized crime and when you're on the other side of it you really see how weak most of our law enforcement really is against real crime and how the only thing slowing these guys down is that they can't access our banking / investment systems and that they are generally pretty unsophisticated with technology. If all of that changes I don't know how we stop them.
Privacy will always be an arms race, but I don't think that unregulated crytpocurrencies are going to be a force for good consequences in the world. Maybe blockchains for international settlements between banks, where a newly multipolar world makes a unified global order harder, but I'm not even sure we need them there either.
To me the best thing to come out of cryptocurrencies is that there is now a profit motive for companies to prioritize cybersecurity. I'm already seeing it make a huge difference. Giving that up would be a tough pill to swallow for FVEY because we're the most vulnerable to cyber attack.
But once politicians start getting assassinated or ransomed for BTC, I doubt that cryptocurrencies will survive. It might be the very flaws in the usability of Bitcoin that allow us enough privacy for normal actions, without the extreme privacy that would enable cyber criminals to operate with impunity.
I very much agree with you, although for some amounts it isn't too hard to get a wallet funded without resorting to block mining. For example, meet up in person and buy with cash. Not tenable for hundreds of thousands or millions of dollars in a hurry, but certainly possible for tens of thousands, which is what most unaffiliated low level drug dealers want (so they can buy drugs via Tor and resell them in person for cash).
The thing is, most people fail to appreciate that security and privacy is a continuum. Just because the NSA could figure out who you are if they were highly motivated to do so, doesn't mean that Immigration Germany can, and when you have prostitutes getting human trafficked through employment visa programs, Bitcoin is a whole lot more private than banking. And if you know you are on the other side of an NSA level attacker, then it is still possible to maintain privacy, it's just exceptionally unpleasant and slow.
But once you have the private nodes set up, it's the easiest way of moving hundreds of millions of dollars across boarders. This is why I think it's going to be made illegal. Big gangs have some smart enough cyber guys and they'll use Bitcoin as a shadow banking system. But right now what gives Bitcoin its intrinsic value is greed: People think it might be the currency of the future and they rightly deduce that it will dramatically increase in value if it is. If governments uniformly ban transactions with cryptocurrencies this will collapse like beanie babies.
This is what I think will probably happen, although it is possible that governments try to get in and semi-regulate it enough to stop its usefulness by organized crime.