RT @monero: The long-awaited Perkins Coie whitepaper is now available!
"Anti-Money Laundering Regulation of Privacy-Enabling Cryptocurrencies"
This 40 page report is the most comprehensive to-date on compliance and Monero and will greatly assist adoption of XMR!
Don't lose the forest for the trees. Did anyone even read the paper?
Most of their suggestions, regarding Monero, if implemented by exchanges and payment service providers would mean a nightmare for everyone in this community except for those select few that are already well connected, have fancy lawyers and "optimal" legal structures.
We as a community shouldn't condone or incentivize this type of discourse, even if it means financial "gains" in the short term. Most of their suggestions if put in practice would be a direct attack on Monero users, and yet here we are, celebrating. As /u/geonic_correctly pointed out this paper feels like a missed opportunity more than anything else.
We as a community need to remain vigilant and not fall for the same traps that have plagued some other projects in this space, code can change, communities consensus can change, be mindful of playing the state apparatus game and hoping that somehow you'll "win" by playing by their rules. You'll lose, badly.
Even if some people would be financially better off in the short term. That was never Monero's goal, keep that in mind.
> playing the state apparatus game and hoping that somehow you'll "win" by playing by their rules. You'll lose, badly.
Get a moral gold medal. I'm happy to see there are still people in this community who refuse this kind of regulatory bullshit. I hate to see many acting like Monero will survive only if it will fit state regulations. Too many seem to see Monero as simply a product that needs to fit as many regulations as possible to become mainstream. I don't care of Monero becoming mainstream and worth 1 bajillion a coin.
People who actually need Monero will never go through KYC or other regulatory bullshit. They will use an half-broken smartphone found in the streets of a city in Rwanda to send money to the rebels who are trying to overthrow the dictatorship.
How did this whitepaper change the community from cypherpunk to regulatory bootlickers? The tech hasnt changed, the people neither: chill man!
EDIT: ErCiccione pointed out to me he didnt write anything like this, I must have read it elsewhere. Anyhow, my apologies to him
EDIT2: I see I mixed up two replies, but that doesnt change the fact I was wrong 😅
Also it's worth keeping in mind that loose community agreements shift, new people join the community, etc
BTC community was mostly cypherpunk at some point, it's far from it these days, sometimes those things change fast.
Monero can still be used outside of regulatory requirements, just like physical cash can. If Monero was made only to fit in such requirements (become neutered to the point it's basically Bitcoin), then I would have a problem with it.
> I'm happy to see there are still people in this community who refuse this kind of regulatory bullshit. I hate to see many acting like Monero will survive only if it will fit state regulations. Too many seem to see Monero as simply a product that needs to fit as many regulations as possible to become mainstream. I don't care of Monero becoming mainstream and worth 1 bajillion a coin.
I think we can close this thread now :)
> They will use an half-broken smartphone found in the streets of a city in Rwanda to send money to the rebels who are trying to overthrow the dictatorship.
Woah, you lean pretty far out of the window here :)
But yeah, has something.
I could have made a softer example about rural asian communities receiving fundings for their farm in XMR directly to their phone from a random guy in australia, but the rwanda rebels thing was a more powerful example :P
On another note, another high-level concern I have is that we as a community will change our culture and start focusing on these "compliance questions" too much, foregoing possible protocol improvements/research because that would potentially mean "delisting". Being not compliant with policies as draconian as the FAFT or AMLD5, would in other periods in this community, not that long ago, been seen as a badge of honor.
Or that we'll become gradually more like the Bitcoin community, more and more focused on "number go up", "institutional investors" and similar crap like that.
This is probably my biggest fear. Luckily that's not the case yet, but i cannot hide that seeing so many in the community being so focused about compliance (not talking about the average guy who only wants to see numbers going up, talking about actual contributors) worries me. Luckily i don't see key developers like moneromooo becoming regulatory bootlickers, so as long as things stay as they are, we are good. On a personal note, i wouldn't really want to be part of a project focused on pleasing institutions and regulations. That's not the reason i'm here.
"To target and lessen the anonymity-related risks of privacy coins, appropriate enhanced due diligence would likely include measures to prove a customer’s source of funds, place of residence, and profession. Other measures may include a requirement that customers describe in detail their purpose for transacting privacy coins (e.g., the holder is a cryptocurrency trader or operates a business in which cryptocurrency is accepted as payment), along with anticipated privacy coin transaction volumes and anticipated privacy coin transaction counterparties."
"Although it would be a blunter instrument for risk mitigation than per-customer analysis, a VASP could reasonably and effectively lessen the overall AML risk of a privacy coin offering by categorically prohibiting customers who are in higher risk categories or geographies from accessing the privacy coin offering"
" a VASP could require supplemental information from a customer before processing a privacy coin transaction (e.g., details regarding the purpose of a transaction, the name and address of the recipient, and contact information for the recipient)."
"Users can reveal an XMR transaction’s details that are specific to their account via key-based functionality that is built into the Monero protocol. Specific view keys can be shared with any third party to grant insight into the account associated with the view keys. This enables users and VASPs to disclose certain transaction details associated with a given account to a third party without publicly disclosing that user’s transactional information. In addition, VASPs can require up-front disclosures as part of their registration process and on an ongoing basis to meet their obligations."
Imagine if all (or a combination of the above) becomes the standard of the industry, is this (as a community) what we are really rooting/lobbying for?
Yes, those are concerns, and I'd rather not have those requirements. However it doesn't stop Monero from being a useful tool. This would prevent people from *not* 'being their own bank'. People can still use Monero to transact and secure their wealth and pay for things without going through a bank or other financial institution.
I don't like discrimination, and this could prevent someone like a cam performer from getting a crypto bank account (even though their services are legal, places like PayPal already refuse to have them as customers). This hypothetical cam performer may not be able to get a traditional mortgage, but they could still rent-to-own. I'm sure other products/services would pop up in the future that would allow for people to more safely 'be their own bank'.
> Imagine if all (or a combination of the above) becomes the standard of the industry, is this (as a community) what we are really rooting/lobbying for?
Eh, maybe. I mean, even if that becomes the industry standard... This community would develop alternatives, as some of them already exist.
The goal of the paper was to prove that Monero can be completely aligned with KYC/AML practices and there's no need to ban it, which would be a lot, really a lot worse than just forcing KYC in the standard exchanges.
Cool. So I don't get your point.
This whole whitepaper is literally just ammunition for when people or other entities come around spewing bullshit that they need to ban monero or something like that because it's impossible to apply the existing regulations to it.
I prefer to have this ammunition than to not have it.
I disagree. This is allready standard practice with normal banks/fiat, as it is with buying crypto from VASPS’s with a bit higher volumes. I’d rather have XMR then USD, being sure there’s no unlimited printing AND I can buy stuff without companies knowing what and where I buy my groceries
Great that normal banks/fiat is the standard we hold ourselves up to these days.
Regarding the rest, if your grocery store were to be using a payment processor they would potentially fall under some of this regulations, were they to follow some of this recommendations it's not necessarily true that "companies wouldn't know where you buy your groceries".
Also, this paper clearly incentivizes entities to discriminate against "privacy coin" (blergh!) users to a degree of scrutiny that "other coin" users are not subject. That in of itself is concerning, it could also be used by current market participants (that deal with monero with no issues) to change their compliance policies to incorporate some of these suggestions. All in all, it's nothing to write home about, let alone celebrate.
I did notice the following references to auditing Monero exist in the paper...
Specific view keys can be shared with any third party to grant insight into the account associated with the view keys.
The confidential transactions feature is a cryptographic tool that allows for verification that no additional XMR has been created or destroyed as part of a given transaction, without revealing the exact transaction amount. ^(42)
Unlike the Bitcoin protocol, Monero users have two sets of private keys and public keys (four keys total). The pair of public keys make up the wallet address of a Monero user, whereas the two private keys (the view key and spend key) allow an individual to determine whether an output is addressed to them (view key) and enables the individual to send XMR and determine whether it has been spent (spend key).^(43) To verify transfers of XMR, a third-party observer must know that the XMR is owned by the individual using it. To enable this verification, the individual using the XMR signs the previously received XMR with the one-time address used, thereby proving that the individual knows the private keys and therefore rightfully controls the XMR that the individual is using. The private view key may be given to others to grant transparency into certain details of particular transactions associated with the address or addresses. Monero also contains an optional text field called “tx_extra” that can store arbitrary data in encrypted format. While this text field can be used for a variety of compliance purposes, this use has not been widely recommended by researchers and developers.^(44)
… which are great!
But I personally would like to have seen a small section to show (via the Monero command-line system or a symbolic representation) some techniques, specific tools, and processes of exactly how legally liable entities or operators can, in PC's confidence, sufficiently comply, maybe with some basic examples for different entity types.
Yes, I remember working on an original high level technical description of how Monero works during the MRL workshop which MyMonero and Tari sponsored and Naveen and I put on. We called it a one-sheet and it was requested for this 'regulatory writeup' work. Its on the MRL workshop minutes from back then, sarang, surae and I wrote it in Nashville, but was years before we saw what we became of it so I'm glad to see the post..
Can I violate the money laundering law as a private person? Suppose I sell Monero on localmonero.co for cash. I cannot check whether the money comes from illegal transactions. I have to assume the innocence of the other person. The money laundering law turns this around. You have to prove your innocence.
With regard to the “ease of crossing borders” factor, privacy coins and other cryptocurrencies present a higher inherent AML risk than cash, which is physically bulky and therefore more difficult to transport across borders, because large amounts of cash would require sufficient physical transportation and passing government border security. But privacy coins and other cryptocurrencies arguably pose a lower risk, in this respect, than cash, card, or paper payment instruments, which can cross borders with no transfer record at all (i.e., not even a publicly broadcast blockchain transaction
Where on-chain surveillance tools cannot be used, a VASP would still have ample controls to address AML risks of privacy coin transactions.
Great work, and well done to all those involved in making it happen.
aminokPlatinum | BTC 1321, ETH 1101, CC 422 | TraderSubs1 week ago
It's very encouraging to see this kind of high-level support for privacy, but I think it needs to be forcefully argued that "anti-money-laundering" laws themselves are a grievance assault on privacy rights.
The term 'anti-money-laundering' is an Orwellian euphemism for warrantless mass-surveillance of private financial interactions, and the existence and steady accumulation of these warrantless mass-surveillance laws is a fundamental affront to a free society.
tempMonero123Platinum | QC: XMR 1070, CC 1014, CM 25 | TraderSu1 week ago
It's important to note that Monero can still be used outside of regulatory oversight just like physical cash can.
Regardless of your views on privacy, you are correct that this means nothing in practice. The only reason that the current regulations are enough in their eyes, is that XMR (or crypto users as a whole) have to convert to FIAT at some point or another to make their crypto holding valuable and at that point there's KYC all around.
So for their perspective there's no need for extra regulations because there's already KYC in one end of the spectrum that applies for (virtually) everyone.
as a huuuuge lover of monero, I strongly disagree. Money laundering is the mechanism that allows criminals to do crime. Its what makes crime profitiable in the first place.
Its why one of the first rules for investigating crime (and investigative reporting for that matter) is "follow the money". Anti-money-laundering laws allow law enforment to follow the money. If buisnesses did not have to follow anti money laundering laws, it would be practicly impossible for law enforment to meaningfully follow the money.
I agree they can go to far, especially when it comes to live government monitering of financial transactions, *especially* if such monitering is done without a warrent. But the current regulatory regime is not like that at all. the US only *requuires* buisness to know their custimer, and keep good records (which any good buisness should be doing *anyways*).
aminokPlatinum | BTC 1321, ETH 1101, CC 422 | TraderSubs1 week ago
> Anti-money-laundering laws allow law enforment to follow the money. If buisnesses did not have to follow anti money laundering laws, it would be practicly impossible for law enforment to meaningfully follow the money.
Warrantless wiretapping of all electronic communications would also allow investigators to "follow the conversation", and discover what people are saying and to who, to uncover and solve crimes, but it would give enormous powers to the state over the individuals, and allow for nearly unlimited abuse and concentration of power in the organs of the state.
Just as warrantless mass-surveillance of private communication is wrong, so is warrantless mass-surveillance of private financial interactions. Anti-money-laundering laws institute warrantless mass-surveillance.
The dangers of totalitarian surveillance far outweigh the dangers of law enforcement not being able to use it to uncover crime. At its worst, the former allows for institutionalized tyranny, as we see in the dystopia that the Chinese Communist Party is creating in Xinxiang. Even milder varieties of mass-surveillance lead to extreme concentrations of power as they create significant information asymmetries between the general public and those who are privy to the information collected by the surveillance agencies.
Yes, investigators wouldn't be able to "follow the money" without these totalitarian laws, but that is the price you pay to have a free society where people are secure in their most basic of rights.
Money has utility to the extent that it is fungible, and to the extent that it is fungible, then criminals will be able to make use of money they generate from illicit activity. You don't eliminate fungibility in the name of preventing crime, just as you don't ban encrypted communication in the name of preventing crime.
If the problem is organized crime generating hundreds of millions of dollars in illicit revenue, then you go after the source, in the activity that is generating the revenue. You don't try to "trace the money" after the fact, once they have already acquired it. The kinds of organizations that produce these huge revenue windfalls leave plenty of evidence trails, in the physical merchandise they move, the people they employ and the victims they create, that can allow any competent law enforcement agency to begin and prosecute an investigation against them.
The investigative toolkit available to law enforcement in a society that respects privacy/due-process-rights is still significant. It includes the ability to plant under-cover agents in criminal organizations, to pay and pressure insiders to turn confidential informants, to get a warrant to conduct targetted surveillance, etc etc.
And the state can use these tools to focus on the meaningful crime, instead of the "money laundering" that happens after the fact. For example, if it is targeting drug cartels, it can focus on the movement and trade of the drugs themselves, and not a second-order effect of the trade, which is the movement of the money that is generated from the drug sales.
It is much easier to detect, trade and prosecute people for the trade of highly restricted Schedule I substances like fentanyl, which is a physical substance, than to stop the flow of cash that is derived from such activity, which will never be highly restricted, and can be done digitally and through innumerable channels. The state should be focusing on the prior, not the latter. By the time the criminal organizations are doing the latter, it is already too late anyway.
In other words, if the state cannot stop a criminal organization from trading highly restricted Schedule I substances like fentanyl, to acquire hundreds of millions of dollars in revenue, with all of the legitimate tools at its disposal, it is not going to be able to stop these organizations from moving the money they receive from that trade, regardless of what surveillance powers it is given.
The argument that the state needs all this control, to monitor everyone's private financial interactions, is just a cop-out to avoid doing the real work of policing and prosecuting real crime, to exert more government control over the law-abiding majority, and to create more positions in the private banking sector and government bureaucracies, for highly paid "AML experts" and "consultants".
While I applaud the effort, it's disappointing that they decided to amplify the "privacy coin" meme. "Privacy-preserving" or "privacy-enabling cryptocurrencies" should've been used throughout. I would've also liked to see a section on "privacy-eroding cryptocurrencies", starting with Bitcoin, and how that affects the individual user.
This was an opportunity to change the narrative around this technology and to underline how Bitcoin's radical transparency is the niche, not Monero's privacy-preserving technology. To explain to regulators and others that Bitcoin is unlike *any product* currently available in the financial world. Does any bank offer a transparent account that anyone can peer into? Why not?
The paper also misses some of the more important benefits of fungible money. Guilt by association is a thing with Bitcoin. You need to not only be sure of the person you receive your Bitcoin from, but also be careful who you spend it with, since that person might commit a crime and you are the source of his funds. Bitcoin erodes freedoms on so many levels it is preposterous.
All the points you make are valid but it also seems you are ignoring what a good thing this is. Yes, it’s not perfect. But yesterday there wasn’t a specific legal axiom for exchanges in the USA to support Monero alongside KYC/AML and today there is. Let’s celebrate that Geonic.
Does it really matter? Cryptologists, mathematicians, scholars, security experts, all have testified before congress/senate stating the backdooring crypto just won't work. Yet the keep writing new bills and will until the anti encryption passes.
Tons of greats quotes in this one, including some where PC suggests privacy coins are lower risk in practice than Bitcoin, but the conclusion perhaps put it most simply:
"Allowing VASPs to support privacy tokens under current, tested AML regulations strikes the appropriate policy balance between preventing money laundering and allowing beneficial, privacy-preserving technology to develop"
1. It will help random new guy that heard of Monero and then heard FUD how not complaint Monero is with regulations and how will be delisted from all exchanges.
2. It will help small exchanges or small merchants or any service that plan to use or use Monero and was uncertain because of the FUD. Now will normally continue doing what they were doing or start doing it with Monero. And they will point to the paper when people will ask about it.
3. It will help you and me to explain to people, that FUD how Monero dont have future and how only surveillance coins will exist, is false.
Well, for a while it has been a view that exchanges are hesitant to list monero because of regulatory concerns. This paper seems to allay fears that privacy coins are inherently incompatible with current regulatory regimes.
We conclude that privacy coins protect legitimate individual and commercial privacy interests and that existing financial regulations sufficiently address the AML issues that privacy coins present.
Not only do privacy coins provide public benefits that substantially outweigh their risks, existing AML regulations properly and sufficiently cover those risks, providing a proven framework for combatting money laundering and related crimes.
Thank you; (and) yes this is a moment we all need to seriously appreciate and remember. We are here in a place of important historical remembrance where we prove our freedom is justifiably interwoven with truth and privacy as well as anti criminal pursuits.
Beautifully written and now “peer” reviewed.
Thank you to all who have made our wonderful and abstract journey possible.
Have a beautiful day.
Lawyers think whatever you pay them to think.
I wouldn't take what they've written as a personally held opinion. Otherwise they would've written it without being commissioned by Tari Labs & Co (and it would've taken them less time, but, you know... they charge by the hour).
Does anyone really think Perkins Coie would refuse to argue FOR the government (or any other institution) and AGAINST privacy-preserving cryptocurrencies, if they had approached them first? Because they believe in the technology? Please.
Not arguing that. I'm saying that I can't judge their moral character by their professional output.
>Does anyone really think Perkins Coie would refuse to argue FOR the government (or any other institution) and AGAINST privacy-preserving cryptocurrencies, if they had approached them first? Because they believe in the technology?
What do you think about this part?
I was replying to someone who had said that the lawyers "have their head on straight". That implies a moral judgment.
If they had refused to argue for the other side or had done the work pro bono, because they believe in the cause, I might be inclined to agree.
RT @Jarvis_Network: 💪 We have anticipated that for quite some time now, especially with constant gas fees increase ⛽. Therefore, we got closer with @TorusLabs for a month now, and we are developing our new wallet based on Torus technologies.
RT @avsa: Unilogin is out of gas: we’re unfortunately shutting down the project. Many factors contributed to it, but mainly: gas prices, DeFi gentrification and being collateral damage in a war of between the tech giants.
alex van de sande (4 character handle ? me : bot) - @avsa5 days ago
Unilogin is out of gas: we’re unfortunately shutting down the project. Many factors contributed to it, but mainly: gas prices, DeFi gentrification and being collateral damage in a war of between the tech giants.
It's sad to see more projects shut down due to Ethereum's problems. Hopefully more diverse applications are once again possible in Ethereum. In my view, I wouldn't want it to become a DeFi only blockchain.
So is no better then finance 1.0
In fact its worse because you can be anon and do rug pulls on lots of people because you don't have to deal with regulation.
Uniswap isnt the exception anymore with the governance token. The FED could just print some USD and then buy 51% of the UNI supply and then vote in anything they want.
Anything that is not DeFi will struggle according to the [guy that runs the top crypto VC, Olaf Carlsen](https://old.reddit.com/r/polkadot_market/comments/iw5ium/not_sure_why_this_wasnt_posted_before_olaf/).
I'm legitimately sad that one of my favorite projects - Etheroll - is down to [7 players and 12 rolls this week](https://old.reddit.com/r/etheroll/comments/irzq9a/myetherolls_weekly_game_summary_week_37_2020/). I used to explain the potential of smart contracts to people back in 2017 using Etheroll as an example. It was such a simple dapp that most people instantly got the value of smart contracts: there's no permissions needed, no trust needed... just read the code and press roll.
Really sad to see, it was such a great project. But you have to respect teams that give the money back to investors once they realize their initial plan isn't going to pan out rather than doing endless pivots until they've spent it all.
Wrong assumption #1 always seemed like a problem to me from day 1. Suprised you guys even tried to make it work.
All 'freemium' models where multisig wallets are created for free by the service provider on behalf of the user just won't scale in the long run. How can an SP afford even $1 per signup if its trivial to sybil attack that?
Argent will run into this problem also. It's only a matter of time.
Not sure about Unilogin but at the moment Argent requires you to provide your phone number and the account is tied to it. I am no security expert to claim that it prevents Sybil attacks, but so-far it's been working. But yes - being a business subsidizing transactions ain't easy at the moment. Argent better monetize, cause I really like them (they are also #22 on the Eth Gas Station ETH25 Leaderboard, yay).
Despite on what many think, L2s lack on many fronts. Complexity increases almost exponentially and lack of composability is a real issue that no L2 deals with.
That's why the recommendation is always: "Use it if you just wanna move tokens around". Else, build at your own risk.
Developer time is precious and finite, you can't just go and explore a production ready app on L2 just because. The switch to ETH 2 also adds an additional dose of uncertainty to the mix.
Triple bummer when you consider that avsa loudly encouraged everyone else to stop working on login solutions because his team was working on it and made it sound like everyone else would be wasting their time
Why? The amount of locked ETH is going to barely increase and I feel like this might already be priced in. Coupled with US elections pessimism, I want to understand why you think ETH will skyrocket to $1k.
Please help me understand when you say "the amount locked ETH will barely increase." What are you comparing this to currently? To the best of my knowledge there is not any real ETH locked for staking purposes. The only ETH that locked is testnet ETH which is why the price of real ETH hasn't moved. Once the deposit contract of Phase 0 goes live real ETH will be locked up and will impact the price by being removed from circulation. Additionally, ETH is still being locked in defi contracts. Both of these make a pretty good argument for a greatly increased ETH price in my opinion.
One scenario is that mostly people who are already holding ETH long term will stake anyways, so those are not really being removed from circulation. Although there is the possibility of some people deciding to acquire ETH to fund validators.
I was about to disagree until reading the second half of your comment. Indeed phase 0 is relatively unimportant compared to the other two phases and the latter ones need to be introduced ASAP.
So, I really hope they are already under full steam in getting phase I out quickly after phase 0.
Either ETC will get more hash or there'll be a new fork. It will cost less for miners than liquidating all mining assets and closing mining businesses. Some miners will refocus to other PoW chains during ETH2 roll out, but probably not much. Difficulty retargets make mining always a theater packed to the edge
Even just with DEXes there'll be a lot of volume trading tokens between PoW/PoS versions of Ethereum, a lot of fees for miners, I'd imagine
Keep on mining until at least Phase 2. And even after that there will be a need for some compute. Bottom line is in blockchain you can stake, provide liquidity to DeFi liquidity pools, sell compute resources, sell bandwidth and storage space, and probably some other stuff nobody thought of yet. Lots of stuff to do to earn.
Phase 1.5 just brings current ETH 1.x mainnet onto its own shard chain. All execution is still done on old ETH 1.x EVM. Phase 1.5 will also allow transfers between ETH1 and ETH2 tokens via smart contract on ETH 1.x shard chain. Need Phase 2 (EVM upgrade) to fully transition and move away from mining. And even then there will be transition period of dApp/user migration where you can keep mining.
Under the Howey Test, the investor must expect profits solely from the efforts of the promoter or a third party. Here, investors are doing the "efforts"/work themselves by running the validator nodes on their own computers or hardware.
I'm no lawyer but neither is Greg Colvin. Imho staking clearly does not make ETH fail the Howey test.
> Any profit comes from the efforts of a promoter or third party.
The profit does not come from the efforts of a third party. It comes from your own efforts, running a staking node. You're the one validating transactions and building a sequence of blocks, and you get paid for that.
> It is an investment of money.
It's not even an investment of money. You get paid for doing work. The money is there so the protocol can slash you if you misbehave. If I were to do some kind of contract work for you, and deposited money somewhere that I would lose if I didn't hold up my end of the deal, that money would not be an investment for me.
The IRS treats mining as work, too. You don't pay capital gains on your mining income. You get paid for your work and owe regular income tax. When people start doing taxes on staking gains, I bet their excess ETH will also count as regular income.
If anyone has made an investment it's ETH holders who aren't staking, but just hoping for ETH to go up. But the government has already decided that if ETH ever was a security, it's not anymore, because now it's so decentralized it's really a commodity.
> You can’t escape the fingerprints of thermodynamics
Assume the real term time preference rate 0.5% and the worldwide average price of one kwh at 0.1 USD and the worldwide narrow money plus gold at 4.61E+13 USD, the annual energy budget to establish trust is 8.29E+18 Joules which is 1.42% of the annual worldwide total energy consumption 5.84E+20 Joules. Assume people don't change ratios of energy consumption of each economy sector as economy expands, the 1.42% of trust token maintenance/production sector remains. It means the energy fingerprints is always not an issue if the mining task can be decentralized.
> Lightning ..
People who buy in the Lightning scale solution may prefer staying off chain forever so OP's argument is not justified.
Are we hurtling towards another situation where bitcoiners were promised cheap and free payments only to find out that's not technically feasible but this time with lighting? I think lighting is amazing but the last time this conception and reality diverged it caused the bitcoin community some major growing pains.
Despite the controversial title, I encourage anyone to give it a read, there are some good thoughts in it.
The TL;DR of the biggest point is: [large scale] mining is impossible to pull off without a thermodynamic fingerprint. This could create a systemic risk because miners are subject to their jurisdiction's laws/KYC obligations.
This also means there are some benefits to small scale mining over large industrial mining. If large industrial miners are targeted by regulators , thieves , or terrorists this simply is an added inefficiency they take on to counter the efficiency of scale encouraging more decentralized mining that cannot easily be tracked and regulated.
There are also some overlooked things in this article as far as other ways lightning is scaling leading to more efficient use of onchain capacity like splicing or the fact that larger onchain fees can amortize across millions of lightning txs.
Yeah, that's a good TL;DR. Some points are just... moot? Like the crushed expectations part.
The author is plain wrong about something: it talks about the flood and loot attack on LN, and how things like that motivated the bcash split for bigger blocks due to unreasonable expectations. That's simply not true: having an 8mb block will not solve any of those "crushed expectations". Those things had nothing to do with the split.
Also, if you think the attack the author linked is possible with a 2-4mb (segwitted) blocksize but it's not with an 8mb blocksize you're dreaming. Furthermore, the core idea of comparing the lightning network attack to the blocksize is wrong: For the attack to happen there should be a lightning 'backlog' of transactions that are much, **MUCH** bigger than what an 8 megabyte block would be able to handle.
So what's the point here? "Lightning doesn't scale that much, and look at this attack. Oh, things like these motivated the split... but not even a 10mb block would solve this volume, so the split was useless to address this."
What's wrong with this part of the article is that the author seems to know what he's talking about, but he is just combining his/her scattered knowledge of btc stuff into a bunch of nonsense.
> The author is plain wrong about something: it talks about the flood and loot attack on LN, and how things like that motivated the bcash split for bigger blocks due to unreasonable expectations. That's simply not true: having an 8mb block will not solve any of those "crushed expectations". Those things had nothing to do with the split.
Hm, I don't think he is talking about block size. I also don't think he means that a split will have anything to do with a block size itself, he is just giving an example of the previous split off caused by the block size controversy (some people's expectations of cheap tx's/large blocks got "crushed"). And makes an analogy that in Lightning people expect cheap and micropayments to work out infinitely, which might not be the case in the future and lead to disappointment of those people.
It doesn't seem to me he is talking about specific Lightning attacks, but about the consequences on the "social layer" (disappointment by overpromises/hype/misunderstanding) and lots of infrastructure being broken because it relied heavily on micropayments being viable.
Anyway, what is your opinion on the mining part?
This isn't a "yes or no" question.
The answer depends on how much energy and hardware investments those 150 exahash represent and how easy it is to acquire those. The number is relative and doesn't give much absolute information about the security level of the network. The more important question is: how easy is it for a malicious party to reach the majority (or a significant portion) of the hashrate? Also, hardware efficiency improves over time, so even if 150 exahash sounds massive today, it probably won't sound so massive anymore in a few years time.
"The innovation in its distribution...it went to real users rather than only to speculators, according to William Mougayar."
Gradual users --> Sudden token.
Uniswap’s Distribution Is Built on Something That Can’t Be Forked: Actual Users https://t.co/HJTobHHwU9 via @coindesk
community is currency
with an average daily trade volume >$500M, the @UniswapProtocol community got stronger and even more loyal this week
expect a move towards more user focused launches 🚀
RT @ljxie: A trustless version of tokenized bitcoin on Ethereum has been one of the areas I've been most excited about and now we minted our first tBTC at @scalarcapital! Each token is backed 1:1 by BTC with no intermediaries. Can't wait to start earning yield on it in DeFi! https://t.co/nrFrVwoKef
A trustless version of tokenized bitcoin on Ethereum has been one of the areas I've been most excited about and now we minted our first tBTC at @scalarcapital! Each token is backed 1:1 by BTC with no intermediaries. Can't wait to start earning yield on it in DeFi! https://t.co/nrFrVwoKef
RT @polydotmarket: A new Polymarket is coming.
📈 Unlimited free trades with instant execution
💳 Debit/credit card deposits and email login
💸 No-limit trading on more markets with 10x more liquidity
RT @cryptobonaparte: Polymarket is an information markets platform that lets you bet on the world’s most highly-debated topics, and turns the trading activity into actionable insight that helps people make better decisions for their future. #PolymarketStage2 https://t.co/x3W6AzTmNE
This is amazing. Hopefully they'll implement other stablecoins as well. I want USDT, DAI, TUSD, BUSD, SUSD, yUSD, DUSD... I want them all. Maybe even normal dollars, since they say that debit/credit card deposits are possible.
tl;dr An overview of the blog https://unenumerated.blogspot.co.il by Nick Szabo, the man behind bit gold and the term smart contracts. Touches upon many subjects including mental transaction costs, social scalability and proxy measures.
RT @balajis: Fee pressure is painful, but good in the long run. It leads to technical innovation within Ethereum (eg zk-rollups) and migration to other chains. A financial incentive to scale and decentralize. https://t.co/4e8B5KIUm5
Fee pressure is painful, but good in the long run. It leads to technical innovation within Ethereum (eg zk-rollups) and migration to other chains. A financial incentive to scale and decentralize. https://t.co/4e8B5KIUm5
Super stoked to be backing Dune!
Crypto is extremely early and in urgent need of better analytics.
I see people sharing Dune links every day, which says a lot about the traction Dune is getting!
Go @hagaetc@mewwts 📊 https://t.co/msdYd8Etx1
RT @bwertz: ❤️ that @UniswapProtocol story!
"All students who, as part of a class project, participated in listing and swapping a token on Uniswap received 400 UNI. [...] valued at roughly 12,000 liras, which accounts for nearly half the yearly education fee [...]." https://t.co/sTBiTaWcAw
RT @PhABCD: "I tested SparkPool’s whitehat endpoint with a meaningless transaction, and it worked as expected: the tx was not seen in the mempool, then suddenly appeared as part of a SparkPool block!
It was like watching water vapor turn directly into ice without that pesky liquid phase." https://t.co/gnIenHM7m1
alex van de sande (4 character handle ? me : bot) - @avsa54 mins ago
The post reads like a heist movie, including the long “getting the gang together” part, beautifully written from multiple perspectives.
And yes, this is the a message you don’t want to be in the receiving end of.. https://t.co/48En6dKevqhttps://t.co/asp194djMj
RT @lex_node: shocker--equity holders in unincorporated association decide to keep their money instead of compensating users injured by their incompetence.
👏just 👏 like 👏 every 👏big 👏corporation, from tobacco re: cancer to Facebook re: data leaks