[acdha]

That’s a rather incongruous jumble of ideas and, as usual, Bitcoin doesn’t actually solve any of the mentioned problems. If you’re concerned about asset forfeiture laws, vote better to change them – your Bitcoin will be seized and liquidated like everything else, and if you think you can hide a wallet ask how that’ll work out better than burying money or storing it offshore.

[DennisP]

Yes, you can store wealth in place by burying money. What you can't always do so easily is move it. But you can transfer bitcoins anywhere in the world without anyone blocking the transfer, and you can carry them in your car in a hardware wallet without fear that a cop will confiscate them.

Countries like Russia are looking for a way to move beyond the world dollar standard because the U.S. is able to shut down international dollar transfers for particular countries and banks, and uses that capability somewhat liberally. The U.S. probably can't do that to cryptocurrency, so I'd say it does in fact solve a problem for Russia.

A lot of us vote to change things. I've also gone to protests, gotten involved in party politics, all that stuff. It's not that effective anymore. 80% of the country wants net neutrality and a couple million people took the trouble to file comments with FCC; it made no difference at all. At some point you have to stop begging and start inventing things. As Buckminster Fuller said, "To change something, build a new model that makes the existing model obsolete."

[acdha]

> But you can transfer bitcoins anywhere in the world without anyone blocking the transfer, and you can carry them in your car in a hardware wallet without fear that a cop will confiscate them.

As soon as they’re converted to/from real money, they fall under the same restrictions as everything else, and most of the places you’d want want to live share restrictions on unregulated financial transactions. Similarly, while there’s egregious abuse of cash seizures it’s not like the cops haven’t heard of other stores of value. If they suspect you’re doing something serious, following the money in is what already leads to headlines about police selling large quantities of Bitcoin — and that hidden hardware wallet is going to be seen as proof that you’re hiding something.

That latter point is the key one: there are a lot of people in jail because they thought they could hide money. I would not bet on having the opsec necessary to remove money from your accounts without leaving a trace, and with Bitcoin any mistake means you’ve left an irrevocable evidence trail behind.

[DennisP]

I'm not talking about hiding money. Plenty of people have had large amounts of perfectly legal and reported cash confiscated from their vehicles. They're often able to get it back eventually but only by suing. With a hardware wallet the cop can take it, but it won't make any difference.

All of which is beside the point of the actual article, which is about Russia using crypto to get past sanctions.

[acdha]

I agree that forfeiture is a huge problem but I’m missing what Bitcoin adds to this versus, say, just not keeping large quantities of cash. I don’t hear about cops running charges on people’s cards, for example.

[Frogolocalypse]

I'm actually confident that America will eventually get it right. I expect that America, when backed into it, will legislate your rights to protect the fruits of your labour. And then they'll have the moral authority again. They're just going to have to work harder in diplomacy. Which they are quite capable of doing at times. Underrated? Treaty with Iran. Iran ain't really in the news of late? That is better.

But to your question, keeping $1 million in cash, all legitimately acquired, in your house, which could be seized under the flimiest of pretenses, is madness. Bank? Gold? No thanks.

It's going to happen eventually. You might as well figure out how to get used to it. In spite of how the US sometimes is, they have inevitably come down on the right side of history.

[abecedarius]

> your Bitcoin will be seized and liquidated like everything else

I suspect there's a difference. Old-style, the Man says to the bank, "Hey, until further notice, acdha's money isn't theirs anymore." The bank says "Yes, sir." Then you try to contest this using a lawyer on contingency or something, I don't know.

New-style, they say to you, "Hand over your private keys, you don't own them anymore." You say, "I'm calling my lawyer." Maybe the process ends in the same place, maybe it doesn't, but if possession is really whatever percentage of the law, outcomes will change on the margin accordingly.

To the extent this helps the likes of Putin, it's bad. (see https://en.wikipedia.org/wiki/Magnitsky_Act)

[acdha]

New style seems more like they hold your devices until someone can crack them and/or keep you in jail without access until you hand over the keys, which a judge agrees to because there’s no other way to freeze your accounts. Meanwhile, the prosecutor is going to use not following existing financial disclosure/access laws as proof that you must be doing something really bad – and since those assets are off limits, you’re relying on an overworked public defender.

[abecedarius]

I'm thinking this is mainly an issue for the kind of people who store offshore wealth already (like the Russians this topic started with). Apparently there are trillions of dollars kept that way. They're generally not the sort who get stuck with public defenders, and my point is that cryptocurrencies could make that wealth of the wealthy even harder to confiscate.

(Yes, I did use you in the example instead -- a distracting choice, sorry.)

[htormey]

Devils advocate: That assumes they know about all of your wallets? It would be relatively easy to hand over one but keep another they don't know about right?

[acdha]

How did anything get into those wallets in the first place? If it involved any legitimate business or a known address, they know you had something and will follow up.

If it’s totally off the books, you need to flee to a few countries with lax banking laws before accessing it because you’ll have to explain either the income or non-trivial purchases (“how does a guy reporting $100k salary buy a $500k house in cash?” is the kind of thing which routinely catches small scale crooks).

Do any of that wrong, well, you probably lied to a federal agent and can face severe penalties for that alone.

[htormey]

Again, playing devils advocate, but plenty of cash heavy small businesses (bars, restaurants, laundry services) keep things off the books to avoid taxes and get away with it. So why would this be any different with crypto?

Instead of a shoebox or an off-site safe you would just use a wallet and deposit crypto into that. The crypto could be purchased using something like localmonero or anonymously deposited by a friend who you give cash to.

Crypto currencies like monero have built in privacy so it’s possible to have anonymous transactions where it’s hard for police to trace the origins:

https://www.monero.how/why-monero-vs-bitcoin

It’s also possible to obtain monero without going through a bank or showing identification (as mentioned above):

https://localmonero.co

Now I’m sure some people will be caught doing stuff like this in the same way that some people get caught today avoiding paying taxes. My point is that it’s possible to do and it’s likely going to get easier to do.

The big change with crypto is that it makes it much easier to do the above and move it across borders. It will be interesting to see how governments try to restrict this.

[Frogolocalypse]

> How did anything get into those wallets in the first place?

I think you misunderstand the nature of freedom and rights. I don't have to explain what I did with my money. I have the presumption of innocence. You don't get to trawl through my financial records looking for a crime. You have to have probable cause that I have committed a crime, and then seek supporting evidence for it.

I think it's funny that the country with the first and second amendment is the one that has, for decades, pushed the restriction of rights in money. Americans seem to have forgotten what a right even is. With the first amendment, people aren't legally 'allowed' to say what they want. The government doesn't have the right to stop you saying what you want. With the second amendment, people aren't legally 'allowed' to have guns. The government doesn't have the right to take them away from you. For too long the surveillance state has crept in, and now there are people that believe that you have to prove your innocence. Incorrect. You have to prove I have a case to answer, and I get to protect myself from self-incrimination, and you have to prove that case beyond reasonable doubt.

That is what is so insidious about civil asset forfeiture. It is civil. Instead of proving beyond reasonable doubt that you have committed a crime, all they have to prove is the balance of probabilities. You are treated like a criminal, but it isn't you who is the criminal, it is your assets. When they don't know your assets, nor have access to your assets, because they can't just confiscate the cash out of your car, your house, or your bank, you are protecting yourself.

Law, meet bitcoin.

[acdha]

> I don't have to explain what I did with my money. I have the presumption of innocence. You don't get to trawl through my financial records looking for a crime

Do you think you have to pay taxes? If so, the government needs the authority to confirm that transactions are properly accounted for.

[IIAOPSW]

You still don't get it.

To bust sanctions is to go against the Washington consensus. But why did bitcoin become popular with American's in the first place?

The answer is that the Washington consensus has evolved to be just as opposed to the interest of every day American's as it is to the interests of states like Russia and Iran. Civil liberties have been eroded in the name of terrorism and pedophiles for a long time now. No amount of voting seems to fix these problems.

The founding fathers put gun rights in the constitution under the belief that the final protection of personal freedoms is the ability to defend it for yourself. Cryptography is the guns of the 21st century.

If bitcoin is being used to bust sanctions, its a problem that could have been avoided if the plutocrats in Washington hadn't prosecuted the endless drug war, engaged in civil forfeiture, used taxes to pursue unpopular bailouts, and just generally gave people a reason to want to exit their financial system.

[acdha]

Again, my point isn’t that the state of executive powers is great but rather that magical thinking about technology won’t solve them.

Moving real money into Bitcoin will leave a paper trail, as does moving it out. If you don’t disclose that or surrender control when required by law, they’re not going to just give up — that’s more like jail time until you cooperate (money laundering is an obvious lever), and most other countries will go along with that. Similarly, companies which are trying to be legit aren’t going to touch tainted bitcoins since they don’t want to be pulled in as accomplices.

[IIAOPSW]

>If you don’t disclose that or surrender control when required by law, they’re not going to just give up.

But its trivial to manage several separate financial persona's (wallets) and generally amortize yourself against losing/revealing everything.

>and most other countries will go along with that.

Countries within the Western sphere of influence sure. Just look at how the US got that BTC-E Russian on holiday in Greece. But consider the fact that some countries have more to gain by destroying US financial hegemony than they stand to lose by their own citizens petty crime. Russia makes bitcoin completely unregulated. So you try to contain the problem by blocking Ruble/USD exchange. Then China follows Russia's lead. Now you contain the problem by blocking RMB/USD exchange? Pretty soon you've locked so much of the world out that really all you've done is lock yourself in.

In the near future there will be so many leaks that the US and the West in general doesn't have enough fingers to plug every hole.

>aren’t going to touch tainted bitcoins

Monero

[acdha]

> But its trivial to manage several separate financial persona's (wallets) and generally amortize yourself against losing/revealing everything.

How does money enter or leave those accounts? If you started with real money, converting it into Bitcoin leaves a paper trail and it’s on you to show where it went for any non-trivial amount.

If you received Bitcoin, attempting to spend it has the same problem – if you didn’t disclose it, that alone has hefty penalties.

The other point to remember is that everything people describe looks really bad if there’s any hint to clue an investigator in. Most people are going to have some slip and this will all be used as proof of intent.

[mycall]

> Moving real money into Bitcoin will leave a paper trail, as does moving it out.

That will change with the Lighting Network.

[acdha]

If I have $50k in USD, how can anything avoid leaving a paper trail when you convert that to something else?

[vageli]

In person transactions have no paper trail if you don't want them to.

[acdha]

At that point, why not use cash? You’re already restricting yourself to small amounts and avoiding major purchases, so what does adding a cryptocurrency give you?

[Kadin]

> But why did bitcoin become popular with American's in the first place?

Because it looked like a get-rich-quick scheme, and Americans like those as much as anyone else. More, in some cases, because there is a lot of cultural baggage in the US around the idea of becoming not just comfortable, but fantastically, fuck-you wealthy, from nothing, by getting in on the ground floor of some expanding industry or company.

People went crazy for canal stocks in the 1790s, railroads in the 1840s, industrials and utilities in the 1920s, Nifty Fifty in the 70s... and more recently, of course, dot-com stocks and then real estate. Lot of people out there looking for the Next Big Thing.

Most people in the market don't give a shit about Bitcoin as anything other than a vehicle for speculation.