Crypto Currency Thread
Discussion
Guvernator said:
So I am guessing traditional banks ... are going to be fighting tooth and nail to scupper this.
Why? Banks have been out of the payments business for years.I don't see them trying to sabotage Paypal, Worldpay, the card issuers and so on.
Someone needs to provide the balance sheet if you need to tack on a lending business to this - in that case you need banks again (given blockchain people's usual dislike for fractional reserves etc).
Guvernator said:
So I am guessing traditional banks and governments are going to be fighting tooth and nail to scupper this.
FB consulted widely at the highest levels before pushing on with Libra. There may still be regulatory hurdles but I'd be certain they have prepared well & already cleared much of the path.NickCQ said:
booboise blueboys said:
Facebook may make Libra very easy to use but the KYC/AML regulation overhead will make it no more free, (probably even less so) than standard FIAT.
KYC/AML law doesn't cease to apply just because you wave your hands and say 'permissionless decentralised blockchain-based solution'booboise blueboys said:
NickCQ said:
booboise blueboys said:
Facebook may make Libra very easy to use but the KYC/AML regulation overhead will make it no more free, (probably even less so) than standard FIAT.
KYC/AML law doesn't cease to apply just because you wave your hands and say 'permissionless decentralised blockchain-based solution'tertius said:
booboise blueboys said:
NickCQ said:
booboise blueboys said:
Facebook may make Libra very easy to use but the KYC/AML regulation overhead will make it no more free, (probably even less so) than standard FIAT.
KYC/AML law doesn't cease to apply just because you wave your hands and say 'permissionless decentralised blockchain-based solution'Libra has a handful of large corporations running as network nodes. Very easy for the government to get on the phone and tell them to seize/block/reverse a certain person's funds. Impossible to do with Bitcoin.
tertius said:
They go to those mediating the transactions - exchanges and the like - in the same way that for fiat they go to banks and exchanges, they don’t go to the Fed or the Bank of England.
Nobody mediates a bitcoin transaction. It's peer to peer. An exchange is just a place to exchange bitcoin for fiat.
dimots said:
tertius said:
They go to those mediating the transactions - exchanges and the like - in the same way that for fiat they go to banks and exchanges, they don’t go to the Fed or the Bank of England.
Nobody mediates a bitcoin transaction. It's peer to peer. An exchange is just a place to exchange bitcoin for fiat.If you try to sell scrap metal today you have to provide ID and you can’t be paid cash so the “enforcement” is done by requiring it of the mediator, in this case the scrap metal merchant. If they paid in bitcoin then they would (I am fairly sure) have the same requirements - though I suspect the specific legislation may say something like “payment via cheque or bank transfer” - but the principle would apply.
I used exchanges as an example as a place where many transactions happen and it is there that KYC would be enforced (as it is). Cash is also peer to peer and exhibits the same KYC challenges - it having a central authority doesn’t make that any easier.
booboise blueboys said:
tertius said:
booboise blueboys said:
NickCQ said:
booboise blueboys said:
Facebook may make Libra very easy to use but the KYC/AML regulation overhead will make it no more free, (probably even less so) than standard FIAT.
KYC/AML law doesn't cease to apply just because you wave your hands and say 'permissionless decentralised blockchain-based solution'Libra has a handful of large corporations running as network nodes. Very easy for the government to get on the phone and tell them to seize/block/reverse a certain person's funds. Impossible to do with Bitcoin.
My point is that the existence or otherwise of a central issuing authority isn’t really the issue - cash has a central issuing authority but you don’t go to Bank of England you go to individual banks and other money handlers and you set regulations for how transactions must be reported, e.g. the scrap metal example I gave in my other post.
To be clear I am not saying bitcoin doesn’t make it much more difficult, I am just saying that it’s not the lack of an issuing authority that’s the fundamental problem.
tertius said:
But in Bitcoin’s case there are a relative handful of large pools that mine the vast majority of blocks - the number of solo miners is minuscule - the pools is where you would go if necessary.
My point is that the existence or otherwise of a central issuing authority isn’t really the issue - cash has a central issuing authority but you don’t go to Bank of England you go to individual banks and other money handlers and you set regulations for how transactions must be reported, e.g. the scrap metal example I gave in my other post.
To be clear I am not saying bitcoin doesn’t make it much more difficult, I am just saying that it’s not the lack of an issuing authority that’s the fundamental problem.
Mining pools have no control over what miners do. Miners are free to join whatever pool they wish or simply mine alone. Yes, they centralise activity to a degree, but it'd be a mistake to assume regulators could take meaningful action against a pool concerning a transaction. A pool can easily shut up shop & regroup elsewhere.My point is that the existence or otherwise of a central issuing authority isn’t really the issue - cash has a central issuing authority but you don’t go to Bank of England you go to individual banks and other money handlers and you set regulations for how transactions must be reported, e.g. the scrap metal example I gave in my other post.
To be clear I am not saying bitcoin doesn’t make it much more difficult, I am just saying that it’s not the lack of an issuing authority that’s the fundamental problem.
KYC is all well and good where a party that can easily be regulated - like an exchange - is involved in the transaction
If I give you a £20 note, there is no KYC / AML element to that transaction and, just like cash, if you want to send me a bitcoin payment from one your wallets to one of mine, no KYC / AML checks are needed for that transaction to take place
Don't confuse that with either party to the transaction being anonymous, or the transaction being untraceable - quite the contrary in fact
If I give you a £20 note, there is no KYC / AML element to that transaction and, just like cash, if you want to send me a bitcoin payment from one your wallets to one of mine, no KYC / AML checks are needed for that transaction to take place
Don't confuse that with either party to the transaction being anonymous, or the transaction being untraceable - quite the contrary in fact
tertius said:
You are misunderstanding what I am trying to say - when enforcing KYC it is not done by talking to the issuer of a currency but by whoever is handling the specific transactions they are concerned about, whether making a loan or buying scrap metal.
If you try to sell scrap metal today you have to provide ID and you can’t be paid cash so the “enforcement” is done by requiring it of the mediator, in this case the scrap metal merchant. If they paid in bitcoin then they would (I am fairly sure) have the same requirements - though I suspect the specific legislation may say something like “payment via cheque or bank transfer” - but the principle would apply.
I used exchanges as an example as a place where many transactions happen and it is there that KYC would be enforced (as it is). Cash is also peer to peer and exhibits the same KYC challenges - it having a central authority doesn’t make that any easier.
I'm very familiar with KYC and its implications. I don't think I'm misunderstanding anything. There is no requirement to apply KYC to a bitcoin transaction, what happens is when you convert to fiat (e.g. pay into a bank) you may have to prove the source of the funds. If you are trading and paying tax you need to declare all sources of sales/income - including bitcoin payments. It goes without saying that you are likely to attract the unwelcome attention of HMRC unless you can detail where every bitcoin transaction comes from.If you try to sell scrap metal today you have to provide ID and you can’t be paid cash so the “enforcement” is done by requiring it of the mediator, in this case the scrap metal merchant. If they paid in bitcoin then they would (I am fairly sure) have the same requirements - though I suspect the specific legislation may say something like “payment via cheque or bank transfer” - but the principle would apply.
I used exchanges as an example as a place where many transactions happen and it is there that KYC would be enforced (as it is). Cash is also peer to peer and exhibits the same KYC challenges - it having a central authority doesn’t make that any easier.
Edited by dimots on Wednesday 19th June 09:43
dimots said:
I'm very familiar with KYC and its implications. I don't think I'm misunderstanding anything. There is no requirement to apply KYC to a bitcoin transaction, what happens is when you convert to fiat (e.g. pay into a bank) you may have to prove the source of the funds. If you are trading and paying tax you need to declare all sources of sales/income - including bitcoin payments. It goes without saying that you are likely to attract the unwelcome attention of HMRC unless you can detail where every bitcoin transaction comes from.
I think you are misunderstanding what I am saying or, more likely, I am expressing it badly: I was originally answering someone who asked (I paraphrase) “where would they go to enforce it, without a central issuing authority” hence my answer that you don’t need an issuing authority as that’s not where you would go for KYC anyway, and it’s not where KYC is enforced today for fiat transactions.Edited by dimots on Wednesday 19th June 09:43
I am not suggesting this is what they DO do for BTC nor that it would be straightforward.
Simon Dixon talks about it a bit in this video - just a minute 16: 8'16" to 9'32"
https://www.rt.com/shows/to-the-moon/460288-blockc...
https://www.rt.com/shows/to-the-moon/460288-blockc...
tertius said:
dimots said:
I'm very familiar with KYC and its implications. I don't think I'm misunderstanding anything. There is no requirement to apply KYC to a bitcoin transaction, what happens is when you convert to fiat (e.g. pay into a bank) you may have to prove the source of the funds. If you are trading and paying tax you need to declare all sources of sales/income - including bitcoin payments. It goes without saying that you are likely to attract the unwelcome attention of HMRC unless you can detail where every bitcoin transaction comes from.
I think you are misunderstanding what I am saying or, more likely, I am expressing it badly: I was originally answering someone who asked (I paraphrase) “where would they go to enforce it, without a central issuing authority” hence my answer that you don’t need an issuing authority as that’s not where you would go for KYC anyway, and it’s not where KYC is enforced today for fiat transactions.Edited by dimots on Wednesday 19th June 09:43
I am not suggesting this is what they DO do for BTC nor that it would be straightforward.
How will central banks feel about losing their ability to control the value of currency? Since Libra is backed by a collection of currencies and securities it should be a lot more stable. Problems for nation states who like to print money when their population holds a "harder" form of money.
I don't see how this can last very long imo. There were a few cases of digital money being created in the 90's and early 00's which were eventually crushed and their creators arrested by governments. That's what happens without decentralisation. Is Facebook powerful enough to make ZuckBucks government friendly. Time will tell.
booboise blueboys said:
I don't see how this can last very long imo.
I'm getting strong echoes of Paypal's original vision which is vastly more ambitious than what they are now. https://www.cnbc.com/2019/05/08/facebook-crypto-pr...
https://www.wired.com/1999/07/paypal-puts-dough-in...
Real life got in the way of their plans and it will here as well. If it ever does hit the streets it's going to be very watered down.
tertius said:
I think you are misunderstanding what I am saying or, more likely, I am expressing it badly: I was originally answering someone who asked (I paraphrase) “where would they go to enforce it, without a central issuing authority” hence my answer that you don’t need an issuing authority as that’s not where you would go for KYC anyway, and it’s not where KYC is enforced today for fiat transactions.
I am not suggesting this is what they DO do for BTC nor that it would be straightforward.
Ok in context of that I see what you mean.I am not suggesting this is what they DO do for BTC nor that it would be straightforward.
Well, that didn't take long. US Lawmakers are asking Facebook to halt the development of Libra.
https://www.reuters.com/article/us-facebook-crypto...
https://www.reuters.com/article/us-facebook-crypto...
) to look after the privacy aspect of it...booboise blueboys said:
Well, that didn't take long. US Lawmakers are asking Facebook to halt the development of Libra.
https://www.reuters.com/article/us-facebook-crypto...
This was inevitable tbh, not only due to the aforementioned KYC\AML concerns but a huge private company effectively creating it's own currency will have got the world governments\banks quaking in their boots as it could massively upset the status quo.https://www.reuters.com/article/us-facebook-crypto...
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