I spent 2012 and 2013 vigorously parrying journalists who only wanted to write about Bitcoin and the four horsemen. I was wrong to do that. Most Bitcoin transactions of substance in 2012 were related to one of the four.
While I'm pissed off that I spent time taking shots in the public limelight on behalf of asshole drug dealers, that was not actually the point I was raising above. I presume that the zcash folks are aware their inventions will be used for bad things, and have weighed the moral calculus, and are fine with the outcome. And, I wouldn't necessarily disagree with that calculus.
What I was saying is that a clear-headed individual needs to go into launching a cryptocurrency like this with the certain knowledge that their tool will be used, very rapidly, and perhaps very aggressively, to forward the agendas of the four horsemen. In fact, those will likely be the earliest adopters, or the earliest adopters with real money.
That has some implications for how you design your own responsibility / rights / powers in a cryptocurrency. To think otherwise is terribly avoidant behavior.
- They already have anonymous, secure payment systems (cash, drugs, jewels, shell companies, etc)
- The cat is out of the bag, so they're going to have it anyway
- These proverbial Horsement do more than just move money around; there's still plenty of room for detective work.
Splitting the atom gave us nuclear power, viable cancer treatment, smoke detectors, and also Hiroshima, Nagasaki, and the threat of radiological terrorism. The proverbial sword is always double-edged.
To make an actual point: I think we'd do well as a community to acknowledge the degree of truth these moral panics hold, because I suspect we frustrate a lot of people by being dismissive of what they perceive to be an apocalyptic problem.
This is binary thinking but crime isn't binary. There are varying levels of crime. New technologies can make criminal behavior easier or more difficult. Just giving up on money laundering isn't something most people are willing to think about, particular for an experimental payment system that they don't care about and probably won't use.
For someone who doesn't understand the benefits of a new technology and is rounding it to zero, the cost/benefit tradeoff isn't hard to decide, and making an analogy to splitting the atom is unlikely to be persuasive.
But nobody is actually advocating this, least of all me. The argument is that tracking every financial transaction is no longer viable, whether we like it or not.
Moreover, digging your heels into the sand and saying "but it's not right to give up on money-laundering" doesn't change the reality: there exists technology that makes arbitrary, anonymous payments trivial to perform. What do you propose we do?
This. Taking away everyone's privacy because somebody might use privacy to break the law is dumb. You want to bust drug dealers? Bust them for selling drugs.
- We have driver's licenses, passports and all manner of ID's
- The IRS can audit banking records to ensure there's no tax fraud, sans warrant.
- You can be filmed and photographed in public places for security purposes
The list goes on, and the argument will be that new technologies require new compromises. Yours is hardly a constructive (or even correct) approach to the problem, because it (a) dismisses valid concerns and (b) implies a warped interpretation of privacy law. There is no absolute right to privacy; there cannot be!
That said, we're largely in agreement -- restricting privacy is probably the wrong approach in this particular case, but I think the counter argument should instead be made as I previously described, rather than by a knee-jerk opposition to restricted privacy.
Cash transactions carry substantial risk: both parties must be physically present in some place to make the deal. They can be tailed, the meeting place can be under surveillance, they can be raided, they can murder each other and run, etc. It's also impractical to deal with large amounts of cash due to the risk of robbery/theft (including civil forfeiture), and legitimate entities won't take suitcases full of cash for large purchases. Infiltrating and exfiltrating large amounts of money from the legitimate banking system is also very likely to leave traces that can be understood by sufficiently skilled/motivated forensic accountants.
Whereas flipping some bytes in the firehose of cryptographically secure bytes already coming in and out of every home is undetectable and basically risk-free.
Some much more concrete human rights are ensured through taxation: food, shelter, water, health care, police, education, national defense, etc. If you make taxation effectively optional by running a perfect, free money-laundering system, some of them may have to go.
Doing a significant volume of cash transactions with any financial institution also causes it to send a Suspicious Activity Report [0] to the federal government, which greatly increases your chance of being selected for an audit.
It's true that you don't need records to explain your personal spending, but you will need to produce records justifying any deductions/benefits claimed, and if your lifestyle appears to be large for your reported taxable income, you'll need to account for that too. Recently the IRS has started using public social media posts indicating lavish spending against people who are only paying taxes on meagre incomes.
Laundromats are actually classic tax fraud vehicles. There was an article on HN recently about how the government will pull their water/electric bills to see if the volume of business they claim their doing is in line with their actual resource usage.
In reality we sorted a lot of the problems out as we went along. We have muddled through somehow. The process I think was hardly linear or deterministic. And I think it never will be. Look at InfoSec where it is a constant game of catching up. Yet somehow our ancient technology stacks (DNS, SMTP, HTTP, ...) still seem to work and our world has not yet imploded. Society not yet collapsed. Our children who grew up with the Internet have turned out pretty well (people today seem a lot smarter than most of the guys I grew up with in the 70ies/80ies mainly because of the Internet)
Seems that every time we're on the verge to discovering something totally radical (crypto currencies, big-data, IoT, ...) fear is strong. The only place (people) I have seen where the mainstream approaches technologies with an open mind is Japan. There even old people think robots are cute and innovation is ultimately good. In the rest of the world technology is something potentially evil that must be regulated at all cost before it is even invented.
What if we succeed in creating a decentralized autonomous organizations (DAO)[0] or an economy that doesn't answer to the state. We are pretty close to having the tools for it, and I'm sure this is scary as hell for a lot of nation states. See also the latest news about UK government creating their own version of a blockchain by removing the best feature (decentralization [1]). I doubt though that any of this will lead to anarchy (unless our system/society is already so broken that it was due to be replaced with a healthier model anyway).
[0] https://en.wikipedia.org/wiki/Decentralized_autonomous_organ...
[1] http://www.newsbtc.com/2016/01/19/uk-government-to-develop-a...
People profiting off the illegality of drugs who are drawn to high-risk/high-reward work.
> money-launderers
People who want to keep ANY of their income sources private. Also see: Anyone who uses cash.
> terrorists
"There is neither an academic nor an accurate legal consensus regarding the definition of terrorism." https://en.wikipedia.org/wiki/Definitions_of_terrorism This makes it a "weasel word" (or "appeal to anonymous authority" fallacy) pure and simple, like "treason" from back in the day.
> pedophiles
Most aren't active and suffer in silence. The rest can be managed. As the grain of truth of Louis CK's infamous "Most Offensive Joke Ever," if pedophilia wasn't as demonized as it is now, then most people would get their kids back after being abused, instead of them ending up dead in a ditch. The former being arguably not as bad as the latter.
> People who want to keep ANY of their income sources private. Also see: Anyone who uses cash.
That's not what money laundering is, I really wish people would stop perpetuating this misinformation. Money laundering is when somebody takes illegal income and "cleans" it by creating fake clients that pay a front business. You obviously have to pay taxes, etc but at the end of the day you have a completely clean cut of your illegal income.
Anonymous payment methods only solve one (very small part) of the money-laundring problem: getting the money to someone who will clean it. After that, you still need to create fake clients and do your tax returns (which require believable income figures). So you're still stuck with trying to convince the IRS (or tax office of your choice) that the money you gained was legitimate.
I found the problem. I don't think money has an intrinsic morality. It might be the result of (what some may deem) immoral action, but the money itself should not be illegal. There is nothing about "suddenly" having a lot of money which should be automatically illegal or prevented, and people should not have to explain every detail about how they obtained the money they did.
This kind of thinking leads to things like asset forfeiture abuse, where merely having a bunch of money on your person is apparently grounds for confiscation.
You may disagree, but I'm entitled to my opinion.
8.3.4. "How will privacy and anonymity be attacked?" [...] like so many other "computer hacker" items, as a tool for the "Four Horsemen": drug-dealers, money-launderers, terrorists, and pedophiles.
https://en.wikipedia.org/wiki/Four_Horsemen_of_the_Infocalyp...