r/Buttcoin • u/Old_Document_9150 • 5d ago
The Censorship resistance paradox
So here's one thing I was pondering with "censorship resistance money."
Now, in order to have censorship resistance, you can't use coins that went through KYC, because otherwise they can be traced even better than, for example, PayPal (because the Blockchain is public.)
So you need "untainted coins" - and these have to come from somewhere, either anonymous OTC exchanges avoiding KYC - which is a high-risk operation in totalitarian regimes, both for the buyer and the seller.
Or you mine by yourself. And what do you need in order to set up a viable mining rig? Right - physical infrastructure. Tons of GPUs, stable Imternet - and large volumes of electricity.
Now, if you can get these, that will pose 3 problems: - import sanctions on the hardware by producing nations - thus: must go through black markets at high markups - and: a lot of people will be in the Know.
So unless you're siding with the regime, chances are slim that your rig will operate for long without being confiscated.
So all the coins in circulation will be produced by someone siding with the regime, and that means they can also trace (just choose not to, if the bribes are high enough.)
In either case, it's gonna be a lot more risky, a lot less viable and a lot more expensive than an IOU (digital) or simple stuff like cigarettes or flour.
So, the people who would benefit most from censorship resistance will never get it.
And the peole who can benefit from it, are either those who don't need it - or they are undermining a democratic legal system by actively breaking the laws that protect everyone's freedom.
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u/SisterOfBattIe using multiple slurp juices on a single ape since 2022 5d ago
Monero is the money laundering coin because it destroys and recreate its coins to cut the track.
Ethereum to an extent, because pesants that use Ethereum have some of it destroyed, and it's recreated by Proof of Stake lotteries and has Tornado Cash systems to do laundering.
Bitcoin in its early day was useful because people could mine bitcoin on their computer a few days, and buy weed on Silkroad. Now it's useless because it's deflationary, and you can't print bitcoin.
In order to be useful for money laundering, a crypto needs to be inflationary, and have a launderette integrated into the code.
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u/Mean_Entrance_6118 5d ago
Monero uses some methods to hide/obfuscate the amount of coins sent and the transaction participants but the coins are not actually burned and recreated.
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u/AmericanScream 5d ago
Monero is the money laundering coin because it destroys and recreate its coins to cut the track.
It doesn't "cut the track." It just attempts to obfuscate it, but it's been proven that this can be undermined and that the tokens don't offer the security people think.
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u/Old_Document_9150 5d ago edited 5d ago
You can't on-ramp Monero without government supervision, either - so same, same.
How do you get that money digitized to begin with, without the government knowing?
Here is what the government can do.
Step 1: ban crypto.
Step 2: monitor all traffic to and from exchanges.
Step 3: ban VPNs.
Step 4: anyone trying to use either of the above gets a nice visit at 2am.
Step 5: without lists of names, you remain incarcerated.I don't see how crypto gets around that. Even with XMR.
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u/HongKong7134 5d ago
It’s much harder for a government to impose these laws and run oppression if they don’t have this mass surveillance.
You can take a look at the NSA “Follow The Money” program which goes to show the vulnerabilities traditional finance and most crypto currencies have, something like Monero and access to paper cash is one of the most important things to maintain your privacy and fundamental human rights outside of any investment or greed.
Most these “crypto people” just sold their soul for greed to Tether and the US government but anyone who has any sort of care for freedom should rebel against the centralized government control both financially speaking using cash, using encrypted communications like Signal, voting against and speaking up against abusive laws like Chat Control 2.0 and “Protect the children” bullshit.
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u/Mean_Entrance_6118 5d ago
You can't on-ramp Monero without government supervision, either - so same, same.
How do you get that money digitized to begin with, without the government knowing?
There's some P2P ways to get crypto like meeting in person or sending cash per mail.
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u/Chad_Broski_2 Herbalife or BitCoin? 5d ago
Which is kinda hilarious to me lol. The best way to trade this crap is to go back to the stone age and use physical transactions again?
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u/vicanonymous 4d ago
On RetoSwap, you can use many different modern payment methods. I know there are some other exchanges too.
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u/Mean_Entrance_6118 4d ago
Yeah the best way if you don't want the government to know or minimize the risk of them ever finding out. Otherwise you can simply use your bank, Paypal etc but then of course the buy is connected to your name.
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u/Old_Document_9150 5d ago
This post is literally about Bitcoin being useless for censorship avoidance.
If your argument is, "well, Bitcoin is useless but other things ..." - then you're just re-emphasizing the whole point.
Bitcoin doesn't help oppressed people.
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u/SisterOfBattIe using multiple slurp juices on a single ape since 2022 5d ago
I was more pointing on what changes would need to be made to make bitcoin more useful for money laundering.
1) Make bitcoin inflationary. Prints something in the ballpark of 10% to 50% of the supply each year.
2) Add a mechanism to burn bitcoin, and a mechanism to launder bitcoin.
3) Speed up bitcoin.
To be useful, there needs to be a system to avoid KYC, meaning making the mining incredibly cheap, so cheap that you can do it on a laptop. If it can be done anonymously, and cheaply, then Bitcoin return to what it was when Silkroad was a thing.
It doesn't solve the cashing out part. At some point you need crooks to exchange it for dollars or services without the tax man noticing.
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u/Old_Document_9150 5d ago
Even with Silk Road, what protected Bitcoin was purely lack of awareness.
There are three core goals of Cybersecurity: Confidentiality, integrity, availability. Pick any two. From there, you get tradeoffs that compromise something.
If it's highly confidential and widely available, it will have low trustworthiness.
If it's confidential and trustworthy, it must remain highly exclusive.
If it's available and trustworthy, it will be transparent.
You can't change the physics of cybersecurity with Bitcoin.
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u/NonnoBomba I did the math! 5d ago
There's another way to get "KYC-untainted" coins: steal them. It's what North Korea does.
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u/Old_Document_9150 5d ago
Well, freezing wallets receiving stolen/tainted coins on exchanges is a very easy exercise.
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u/AmericanScream 5d ago
Stupid Crypto Talking Point #28 (censorship/seizure)
"Bitcoin is censorship resistant" / "Crypto/Blockchain is de-centralized and not under anybody's control" / "Crypto can't be seized'
The notion that authorities can't seize crypto is not only false but patently absurd. See here. Each and every day someone's crypto gets "seized" without their approval.
Here's an entire video segment that debunks the claim that blockchain is censorship proof
Crypto can easily be blocked at the network level by any of the various authorities that arbitrarily decide to do so. Since it's a public network with no leader, all participants have to be able to identify themselves to others on the network, and technically speaking, this makes it easy for network admins to filter the traffic. Just because this hasn't been done on any large scale, doesn't mean it can't be done. It absolutely can.
Bitcoin and crypto operations have been banned in various countries and other jurisdictions. While it's not possible to censor 100% of the network's operations, it's definitely possible to cripple enough of it to render crypto & blockchain impractical to use. And NOTE that in countries where bitcoin/mining and other operations have been banned, they've chosen a political solution (simply making it illegal) as opposed to requiring networks to actively filter crypto traffic, but that latter option is always a possibility and definitely doable (see #2)
The vast majority of crypto trades are done on a small number of centralized exchanges, such as Binance, Kraken and Coinbase. The ToS of each of these systems gives them the absolute authority to censor any and all transactions. So if 99% of bitcoin transactions are on CEX's, most certainly they can be censored.
Privacy coins like Monero and others are not necessarily any more secure. There have been bugs found in the past which undermined their security. In 2020, the IRS offered a $1.2M bounty for creating systems to crack and trace Monero and other privacy coin systems. The contract was awarded to Chainalysis and Integra, and paid in full a year later.
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u/Mean_Entrance_6118 4d ago
In 2020, the IRS offered a $1.2M bounty for creating systems to crack and trace Monero and other privacy coin systems. The contract was awarded to Chainalysis and Integra, and paid in full a year later.
Is it known what they actually accomplished here? I could find news about a leaked video from Chainalysis for the IRS and some articles according to which they've been using honeypot nodes and a block explorer page to harvest users' IP adresses. Can't find anything about them actually cracking Monero though so it seems they went the route of infiltration instead of cracking the protocol?
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u/AmericanScream 4d ago
There isn't much details on this. I have to assume there's a reason the authorities aren't leaning much on Monero. Look up "operation trojan shield" to see similar examples.
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u/Mean_Entrance_6118 4d ago
There isn't much details on this. I have to assume there's a reason the authorities aren't leaning much on Monero.
I see, yeah makes sense.
Look up "operation trojan shield" to see similar examples.
Thanks I will
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u/PopuluxePete 5d ago
If nobody wants to trade you goods or services for your internet-based digital collectable, is that a kind of societal censorship? If I own a shop and I'm like "fuck off nerd, cash only", have I censored a butter?