[pcthrowaway]

In 2015 I moved to a different country. I needed to arrange to pay my security deposit for my place before I had moved. Guess what? After talking about it for a bit, it turned out bitcoin was the easiest way to do it. There was nothing illegal about this, and it saved us a giant hassle.

Cryptocurrency users aren't any more complicit in others using it for illicit activities than people who use cash. And you seem to be equating cryptocurrency with proof of work and bitcoin, which, again, are ignoring the majority of the real-world use cases.

[knorker]

I'm not ignoring non-PoW or non-BTC. The topic is big, and the case and data against cryptocurrencies literally have filled books.

But just to establish what you're saying, do you agree that PoW and BTC in particular is absolutely terrible for the world? Can we establish that?

I just want to make sure you're not selecting the parts I have not addressed in these comments and from there you're dismissing the things I have said.

If you can agree that PoW and BTC are awful, then there's no point in staying on that topic, but we can instead look at other parts. Otherwise it seems like a dishonest rhetorical device.

I don't know what countries you moved between, but what you did could be illegal. Or if not, the law may have not caught up yet, because the laws tend to be on the financial institutions, not the payer and payee. But probably the intention of the law is that it should be illegal.

Maybe. It depends how exactly the bitcoin was transferred.

I'm not a lawyer, but have a look at this: https://www.gov.uk/guidance/how-to-comply-with-eu-payments-r... https://www.gov.uk/guidance/money-laundering-regulations-hig...

That's requirements on payment service providers, so (maybe?) not on you. With a decentralized payment service provider, a case could be made that you are the payment service provider of this transaction, but let's assume not, to not make it simple. Still, it is the intention of this EU law that somebody is, right? That's the world in which the law was written.

If you agree with this, that the intention was that somebody has KYC (Know Your Customer) requirements on your transaction, then as I see it the only remaining argument is that you think KYC laws should not exist.

I hope I've not misrepresented you so far. I honestly want to build a trail from your truly legit and moral transaction to what it means in the larger picture.

If you're against KYC I don't quite know what your argument is (it could be a good one), but they were in fact put in place for a reason. Your honest transfer "under the radar" has the same technical means as the ISIS sympathizer's, and the money laundering mob boss's, or the tax dodging wall street CEO's.

I'll assume that you're not an anarchist-libertarian who considers all government action to be theft, and "money laundering" to be a non-crime.

So… the real question is how do we allow transactions like yours, but not make crime like this be trivial under the same technical means?

So far it's by KYC. And KYC laws and enforcement are not perfect. But baby and bathwater. If your argument is that KYC is inherently bad, then I disagree, but don't make it a distraction while actually making a different point.

And if cryptocurrency is "just like cash", that means that, just like with cash, you legally have to report international money transfers: https://www.mybanktracker.com/money-tips/money/travel-intern...

Do you think anyone has ever done this with bitcoin, or any other cryptocurrency? I assume not, because cryptocurrency people will pick and choose when it's "just like cash" and when it's not. Or they'll claim "it's not in a country, it's in cyberspace". But that's all clearly rationalizing to the point of trolling.

To summarize my point: The reason we can't have nice things, the reason there are fees and taxes on international money transfers, is that this is exactly the place where an uncountable amount of fraud and crime happens. It's not "clever" to go around KYC, it's illegal. (or if not technically illegal, the intent clearly was that it would be)

(I have more points against cryptocurrencies, but bringing up every topic at the same time will just be a big distracted mess. If we've agreed on PoW, and if you agree on KYC, then maybe we can do other arguments too)

[pcthrowaway]

Neither of these were EU countries, but both of our exchanges had KYC. I don't believe there was anything illegal about what we did.

And I'm not libertarian (I'm far too socialist), but I do believe that there are problems with the extent to which we are being tracked by governments, especially because I have a lot of issue with various laws around the world (see: criminalizing homosexuality, drugs, sex toys, women driving) I do believe controlling the methods by which people pay for things extends government control, and having more freedom there allows more personal freedom in general. Perhaps surprisingly, I do support paying due taxes (when it's often what funds social services and social programs).

Actually, speaking of money laundering, I learned recently that you can pay taxes on illicit income and the IRS won't have any issue with you. However, I don't trust that this isn't used to track down criminals by criminal agencies. Money laundering allows people to pay their taxes without implicating themselves, so in many ways it's something I support.

I'm not in any way suggesting cryptocurrency is a good way to get around government tracking. Cash might often be better. I don't particularly support KYC, so I'm excited to see the development around decentralized exchanges. And I think painting all "crime" with the same brush is quite reductive. Yesterday's crime is too often tomorrow's activism: Breaking an NDA to expose human right's abuses, using a VPN to browse wikipedia, the list goes on.

But yes, I 100% agree about PoW being problematic, and have frequently posted on HN about how the only way it will be solved is through government intervention. I guess I'm not much of an anarchist either.

[knorker]

More countries than those in the EU have KYC laws. But no, I'm not saying illegal means immoral, nor that there aren't degrees of illegality. I mean that if what you did was legal, then you probably used a loophole. And that same loophole can be used by organized crime to launder money from human trafficking.

And that the trade-off between allowing your transaction and preventing organized crime is why KYC and money laundering laws were created.

I recently did a 6 figure international transfer, and I had to talk to people at the bank, who had to sign off that the source of my funds were fine and I wasn't doing anything shady (nor being defrauded). Just a 15min phone call.

For someone who regularly does this I assume it's streamlined, but it does make sense for the bank to be suspicious on multiple levels when I do the biggest transfer of my life.

They also checked with me to make sure I did basic security precautions like "Did someone contact you and tell you to make this transfer, or did you come up with it yourself? Did someone send you the account number, or did you look it up on a trusted source?".

Sure, part of that was "cover your ass" for the bank's liability to a mistake, but some of it is legally mandated for KYC/ML.

Again, don't take my comments as saying governments or these laws in particular are perfect. I'm saying they are deliberate because something like them is really really a good idea, both for the individual and society as a whole.

But I think it's a red herring to say "some governments criminalize homosexuality, therefore KYC/ML laws are bad or overreaching".

> I don't particularly support KYC

So what's your alternative proposal for preventing / detecting the crime it really does catch?

What's your proposal for forcing banks to not look the other way when drug cartels bank their profits?

Again, I'm not saying it's perfect, but without KYC/ML banks wouldn't even have an obligation to look, and would have no liability when they aid organized crime. Clearly we need to do something? KYC/ML is not flawless, but it also works. So this is not a "We have to do something, this is something" case.

If you take away KYC/ML you have to replace it with something better. Otherwise you're just saying "defund the police" with no plan to replace the police.

So that's KYC/ML.

Taxes.

I guess I brought up taxes a little bit, but it's another chapter in the book on cryptocurrencies.

Right now there is huge tax evasion happening in industries that deal with cash. Taxi drivers are a prime example, but also plumbers, carpenters, etc...

Not everyone, of course, but it's so easy for them. E.g. it's common practice among people felling trees for people that they charge a lot because they need to pay insurance in case the tree falls on something expensive. But when the tree doesn't, they just pocket the whole thing and don't tell the tax man or insurance company.

What if we had the cryptocurrency dystopia, where everyone who wants to can get paid in some ideal cryptocurrency? I bet you HUGE parts of salaries will suddenly go dark, and be tax free.

People earning 6-7 digit salaries would just not declare that at all. It would take a lot of sense of civic duty to hand off 5-6 digits per year if you know you can get away with not doing that. Most people don't have that, and I can admit I'd be super tempted too, if I knew math would protect me perfectly.

The reason people actually pay income tax today is because double entry accounting and the paper trail actually makes it hard to hide salary payments. And paying people in cash is also logistically hard, and even harder if you have to do it fraudulently.

You can do it with low wage workers, but I sure as hell wouldn't want to have to deal with thousands of dollars in my hand every week.

But even then, in many countries it's illegal to pay salaries in cash. Because of the rampant fraud that happens when salaries are in cash.

And why would you want to be paid in cash to hide it from the government? You say you believe in taxes, so the tax man will know your income eventually anyway. So there's no point in hiding it.

Interesting about IRS and theoretically not reporting you. Sounds similar to some places where robbing a bank with a fake gun carries a lighter sentence, so that robbers are incentivized to bring the fake gun instead of the real one, thus reducing harm to innocent bystanders and police.

They got Capone for tax evasion, so it's a charge you don't want. But I suspect if you just declare you bank robbery gains, that's not going to work well for you.