> might be useful in financial transactions

This is likely to satisfy regulators. I highly doubt that this change has anything to do with practical usefulness

? Hmm ... and why might 'regulations' be in place such that when large sums of money change hands, there's some way to know who's involved, or at least to attribute the transaction to some legal entity ?

We can turn this to a semantic argument over the meaning of "practical usefulness", but in my opinion collecting such information provides no additional benefit to Coinbase other than keeping regulators at bay and avoiding future fines and restrictions.

> why might 'regulations' be in place such that when large sums of money change hands

I have done some work in the financial compliance space. You would be surprised how small some of these "large sums" are and they keep getting smaller even while inflation weakens the value of the currency involved. In some locations, the limit is as low as ~$1000 USD.

Yes the motivation is anti-terrorism, protect the children, national security etc... but in practice it is just a vehicle for governments to collect data on its people. In this case, good actors will behave the same while their data is collected and shared. Bad actors who are aware of these restrictions can just pay the $0.25 to transfer through a newly created wallet and then send without these restrictions while regulators pat themselves on the back for stopping money laundering.

What can end up happening with policies like this? Well if governments, regulators, or monopolies get out of hand all of a sudden you cannot send money to a political party. Maybe all your bank accounts are frozen for supporting a protest or all of a sudden you have no way to purchase a flight to leave. Maybe Mastercard/Visa ban donations to entities like Wikileaks for "moral reasons" while allowing donations to the KKK and other similar organizations. These changes don't typically happen all at once. Freedoms are salami sliced away at a rate that doesn't upset the majority and the norm slowly moves to believe that these restrictions are for our own good. (sorry I went a bit off topic here)

Also, why was "regulations" in quotes? Sorry if I missed something or misinterpreted your tone here. Hopefully I answered your question.

It's not 'semantics', it's the opposite of 'semantics'.

It's not mostly 'terrorism and protect the children' - it's tax evasion, wire fraud, bribery, insider trading, financial fraud, scams etc.

Without fairly consistent regulations up and down the financial spectrum, civil society basically would not exist.

We mostly derive our protections from 'government overreach' via the constitution, not anonymity.

> It's not 'semantics', it's the opposite of 'semantics'.

Is there an opposite of "semantics"? Isn't semantics just the topic around the meaning of words and communication? Is the opposite just everything else?

Anyways the point was that Coinbase is likely acting not because it extends the "practical usefulness" of their products, i.e. it adds no new features or functionality. They are likely acting out of regulatory necessity.

The semantic argument is whether regulatory necessity falls under "practical usefulness". I'd argue no, as the usefulness of their product as it applies to users either doesn't change or actually goes down as a result of this, but one can similarly argue that not satisfying regulators likely results in the loss of the product altogether.

> It's not mostly 'terrorism and protect the children' - it's tax evasion, wire fraud, bribery, insider trading, financial fraud, scams etc.

Can you elaborate on this a bit? Collecting beneficiary data is useful for things like redundant checks against sanction lists such as OFAC (terrorism, organized crime, and human trafficking falls under here). I don't see how tax evasion, insider trading, and bribery even apply here.

- Tax evasion would likely deal with the exchange reporting both trades and received funds for a user, neither of which applies to beneficiary data on outgoing funds afaik

- How is insider trading relevant here? Would that not be dependent on trading and not the transferring of assets. Does providing beneficiary data do anything to shed light on trading with privileged data?

- Bribery? Maybe, but seeing as this still happens fairly regularly with traditional finance, I doubt that this will curb much behavior.

> We mostly derive our protections from 'government overreach' via the constitution, not anonymity.

I assume you are talking about the US constitution which doesn't much apply to non-US persons. The US Constitution doesn't provide much context or protection around the financial system either.

In Section 8 we have

> "Congress shall have Power [...] to coin Money, regulate the Value thereof, and of foreign Coin."

And in Section 10,

> "no state [...] shall make any Thing but gold and silver Coin a Tender in Payment of Debts."

These are just the application of normal anti money laundering regulations which are useful only to regulators.

I don't care if someone is not paying taxes, good for them if they can avoid having the government steal their profits and stay out of jail. I don't even care if they're doing something the government deems illegal, especially if it's a victimless crime.

Regardless, I'd rather have the victims pursue the offenders through legal means (which, in a world without a government with monopoly on violence, will likely take the shape of multiple competing protection agencies) and victimless crimes not to be considered crimes at all.

I agree for some transactions you may want to exchange data and legal jurisdictions or setup a contract so that goods / services (+ future support) and money are exchanged safely and without scams - but that's irrespective from the means of payment.

"I don't care if someone is not paying taxes"

... that's you're right but 'we' don't care if you don't care.

We know that without decent regulation, tax evasion on a massive scale, money laundering, criminal activities, insider trading, bribery, extortion, illegal political influence etc. etc. will seriously degrade civil society.

So 'we' put some regulations in there for those reasons.

And without attributing financial transactions to specific legal entities, there's no way to facilitate commercial or litigation otherwise, thereby destroying trust in even regular business transactions, which makes commerce impossible.

'The Means of Payment' is the mechanism by which the transaction is effective, so we'd rather have that in place or not.

For small sums, under $500, it's unlikely we need to worry, but beyond that it gets tricky.

>We know that without decent regulation, tax evasion on a massive scale, money laundering, criminal activities, insider trading, bribery, extortion, illegal political influence etc. etc. will seriously degrade civil society.

You don't know that.

When has it ever been tried?

We didn't explore societies where transactions are voluntarily (eg. no taxes) and we don't persecute victimless crimes (eg. drugs)

I argue my interests are aligned with the majority of non political people.

That said I'm not a proponent of crypto, I think private banks without government regulations are a more efficient alternative than a blockchain.

I don't understand who it is who has to supply the address. Like, if I want to run an anonymous youtube channel and accept crypto donations, I have to report the income and I guess my bank and the IRS need my physical address, but I wouldn't want my viewers to be able to show up at my doorstep that easily.

Chaum's original digicash worked something like that. It could only be transferred anonymously once. It could only be converted to and from regular cash at regulated entities like banks. So you'd buy some coins at the bank. You could then use the one anonymous transfer to send them to some youtuber. Neither the youtuber nor the government would have any way to learn who sent these coins. But, the youtuber would have no way to send them to a third random person. The only thing he or she could do with them would be bring them to a bank and convert them back to normal currency--along with doing any required tax reporting that is required when you bring cash to a bank. All this was mathematically enforced by the crypto protocol (blinded RSA signatures). It wasn't that great for libertarian madness like Bitcoin supposedly was, but we've since seen how that turned out.

Maybe it's time to revisit Digicash, especially since the patents have expired.

> But, the youtuber would have no way to send them to a third random person.

Nothing in the Digicash blinded RSA signature scheme would prevent the tokens from being traded person-to-person any number of times before being presented back to the issuer. It requires some trust in the previous token holders, much like exchanging BTC by trading private keys in place of on-chain transactions, but it's perfectly doable given some other means of discouraging defection. And of course the blinding system itself ensures that the tokens being deposited can't be linked to any particular withdrawals.

It would reveal your private key, which might be bound to your identity in other ways. The other person could then forge your signature on whatever they wanted.

You're thinking of Bitcoin. In the RSA blinded signature scheme the token holder doesn't need a private key, so there's nothing to reveal. The tokens are signed by the issuer (i.e. the bank), using the issuer's private key, and the blinding ensures that the issuer can't see the actual tokens at the time they're signed—that's revealed only when they're redeemed. The tokens themselves are just unique random numbers and not associated with anyone's identity. The issuer keeps track of which ones have been redeemed so that they can't be claimed twice. That's the risk you take by not turning them in immediately: anyone who had the token before you could claim it first, and then your copy of the token would be worthless.

Edit: In the case of off-chain exchange of Bitcoin wallets it would reveal the private key (naturally, since that's what you're exchanging) but for that reason you would only trade a wallet with a unique private key not used anywhere else. The only thing that key is useful for is spending the funds in that wallet. It's not linked to your identity. This is exactly like the "physical bitcoin" model (BitBills, Cascascius coins, etc.) except there is no tamper-evident hologram to prove that the private key hasn't been accessed—you're taking that on trust until you empty the wallet or hand it off to someone else.

> I don't care if someone is not paying taxes, good for them if they can avoid having the government steal their profits and stay out of jail.

Out of curiosity, what percentage of the population could skip paying taxes before you would care?

Are you okay with the government having no funds whatsoever?

And: Would they be ok with their government having no funds but other governments being still funded by taxes.

Publicly funded armies replaced hired mercenary forces for a reason.

This is heavily dependent, probably even correlated, with the way the government currently uses taxes. For developed nations this is a no-brainer, of course they need the taxes to supply services to the population.

For developing nations? I know a few countries were the government having little to no funding would make very little material difference to daily life, since they already steal so much public funding that private services have long since filled the gap. In this case the percentage for caring about tax payment is zero, or close to it

Governments (with monetary sovereignty) are not funded by taxes they are currency issuers, this is a fallacy.

Yes, I hope they wouldn't exist and that people would setup new companies to replace governmental service (for a voluntary fee).

Read about agorism (konkin) and anarchocapitalism (rothbard, friedman).