[toomuchtodo]

> If you trust the rule of law and the financial system, then you are free to continue to use it and ignore cryptocurrency in your life. But what's the problem with having an alternative for those that don't share your view and wish to develop a system free from the encumberances of trust in third parties?

Nothing, as long as you adhere to financial regulations and related laws where the systems and its users operate. Novel technologies don’t absolve you of adhering to the law.

If that means unnecessary abstractions and overhead, or a handicapping of capabilities, then them the breaks of selecting a technology not fit for purpose. Consider regulations and laws as requirements when building systems that store or transmit value.

[v64]

> Nothing, as long as you adhere to financial regulations and related laws where the systems and its users operate. Novel technologies don’t absolve you of adhering to the law. [...] Consider regulations and laws as requirements when building systems that store or transmit value.

This assumes that one lives in a jurisdiction where the law is just and financial institutions are trustworthy. As another example, if the United States were to make end to end encryption illegal [1], are you willing to say, well that's the law of the land, why do we need to keep developing Wireguard or OpenVPN? There would be other jurisdictions that don't disallow it, so the existence of jurisdictions that do disallow it isn't a reason not to continue to develop the technology.

Technologists can be picky about when it's okay to flaunt regulation. I won't speak for you, but many who denounce cryptocurrency for its dubious legal status will in the same breath praise companies like Uber for improving the transportation status quo by "disrupting" the outdated regulations that existed. I see cryptocurrency the same way. I hope that its disruptive nature will cause jurisdictions to reevaluate their financial laws. In the United States, the aforementioned announcement from the OCC today [2] giving guidance to banks on how to use cryptocurrency is a step in the right direction, whether or not you think it's a genuine opinion or opportunism. Certainly there is a place for centralized systems, but centralization should be optional, not a requirement. If one doesn't trust the person/company/government running the centralized service, there should be alternatives.

[1] https://protonmail.com/blog/usa-laed-act-anti-encryption/

[2] https://www.forbes.com/sites/haileylennon/2021/01/04/occ-reg...

[seibelj]

You are 100% right that the regulators have (and will continue) to come down hard on entities that violate these laws.

But crime is endemic, even in the developed world, and has been long before crypto existed. On the internet itself, TOR allows all manner of illegal IP packets to be transferred, but we have not banned the internet itself.

I know this is a tired argument that is oft repeated, but this is because it's true! We can't ban cryptocurrency simply because it can be used for crime. Society accepts that technology can be used for good or evil.

[schoen]

A conceptual difficulty is that cryptocurrencies often intend to make financial technology truly private and permissionless. That goal itself is at odds with lots of existing regulatory systems, and many cryptocurrency developers have emphasized that they want to help people transact outside of those systems.

If you don't want to help people have more privacy, autonomy, jurisdiction-independence, etc., than existing financial systems, but just want to be faster and more programmable, then you don't need cryptocurrency. Instead, you could create a centralized intermediary that implements a system with the properties you want, and simply prepares to help governments {track,seize,freeze,blacklist,reverse} {users,assets,transactions} to the extent that regulators would like. This centralized intermediary will probably be faster, more resource-efficient, less prone to exotic attacks on consensus mechanisms, and more scalable than a decentralized cryptocurrency. It could also be moderately innovative compared to some previous financial intermediaries.

What are the properties that, say, Bitcoin has tried to purchase at the (expensive!) cost of completely decentralized proof-of-work consensus? They include the inability for a centralized authority to shut down the system, or exclude particular participants, or block or reverse particular transactions, or override or violate the predetermined rules for what constitutes a valid transaction, or condition participation on compliance with any particular bureaucratic formality. They include letting miners be anonymous. If you don't want those things, you could more efficiently replace all of Bitcoin or Ethereum with any of several of multi-writer append-only distributed data structures with, for example, a publicly enumerated set of identified, trusted consensus verifiers.