If you're going to use proof of ID, doesn't that kind of remove any need for a blockchain? How do you suppose you can have a censorship resistant currency if all a bad state actor has to do is punish anyone who mines a transaction they don't like.

I like crypto, but the greatest danger of it seems to be the potential for economic enslavement(we don't like you, therefore you can't buy bread anymore) through censorship and oppression.

Centralized government only provide means for a person to ID themselves, possibly through pseudonymous means.

If you are worried about targeted censorship, I seem to recall from the first days of BTC that there are ways to "shuffle" IDs: participate in a pool P, get a new ID that is untraceable to the original one but that is traceable to pool P and offers the guarantee that there are no duplicates.

But note that no cryptocurrency is "censorship-resistant" (I am of the opinion that financial transactions are not free speech, so calling it censorship is not the appropriate word and confuses issues). BTC can be (and has, in China) be forbidden. Forbid mining, jail people who do it. Easy in a country that bans also VPNs and Tor.

BTC is only as strong as Tor is and Tor is dependent on the governmental goodwill to let people use strong crypto. Keep in mind that until 2000 US companies were banned from exporting crypto tools that the NSA could not break [1] and even to this date, restrictions exist for some material and countries. USA is just one executive order away from making Tor, VPNs, and thus, anonymous BTC mining, illegal.

And I think that many countries will ban BTC. China is more energy-constrained than most of us, but the energy needs of the BTC netword is gargantuan. I think they have a year to solve that issue (I think they will use proof-of-stake) before states starts pulling the plug.

And always remember that as cool as crypto is as a tech, it does not exist in the vacuum. While it allows to navigate against an incompetent but permissive state, it does not fare well against a competent hostile one.

A part of the problem of maintaining cryptocurrencies (or anonymous networks) is political, not just technical. I too, as a geek, love the prospect of being able to solve political problems with technical solutions, but it only works up to a certain point.

[1] https://en.wikipedia.org/wiki/Export_of_cryptography_from_th...

Something like proof of ID would be amazing, but like you said it requires a secure digital id system to exist first, which few countries have. Is there anyone building something like this?

E-estonia will provide a certificate to anyone presenting themselves to an Estonian embassy with a valid passport (and, IIRC, $300). They thought many other nations would provide this service but to my knowledge they are still alone.

Estonian citizenship is not required. May crypto-geeks have an estonian ID certificate. If I were still into crypto I would have made one for myself I think.

That is about as far from a decentralised system as I can imagine, we now all have to trust the Estonian government (everyone part of the e-ID chain).

For ID systems, I have yet to find a way to do registration in a decentralized way. Until we get cheap unspoofable genome sequencing devices (which may never be a thing), we will have to trust some authorities.

Once registered, you don't need to trust the Estonian government at all: you get an IC card and a reader (all open source IIRC) and you can autonomously authenticate. If memory serves, you can even authenticate pseudonymously.

Note that you don't have to trust everyone, you have to trust the e-ID registration system as a whole. That is, a single flawed individual won't be enough to corrupt the whole thing.

> we will have to trust some authorities

Which is fine, but than don't talk about cryptocurrencies. These are supposed to be trustless, not trustless-except-we-all-have-to-trust-the-government. Just talk about some new state system that uses some cryptography somewhere.