Re: CoinValidation , will it work? The way to "sanitize" bitcoin !
It all started with :
http://www.forbes.com/sites/kashmirhill/2013/11/13/sanitizing-bitcoin-coin-validation/
And next moment we have the reactions :
https://bitcointalk.org/index.php?topic=332918.0
Well , I went to :
https://coinvalidation.com/ , downloaded the pdf, for users , saw page with 3 rows and 100 words and nothing solid.
I think that we're got the wrong impression here. I saw the word "addresses" to many times in the forbes article and then this paragraph in the pdf files:
"We have developed tools and relationships that provide Bitcoin businesses with a full know your customer compliance suite. "
From my point of view I think the word Coin is misleading. My opinion is that the project is aimed at the addresses.
And I see a way it might actually work , but first let's assume those guys have a plan , and they have an ace in their hand.
Something like a big company wanting to start accepting bitcoins but concerned about the mess around it.
So , Walmart is announcing:
"We accept bitcoins""From cointrusted addresses only"
Most of the people will jump in ,and how can I get and use a cointrusted address?
It's simple ,
1) Go to any trusted exchangers , verify your identity and buy bitcoins which will be sent to a new address you specify
The address has to have a 0 balance and no previous history.
2) Now , you can go to Walmart and buy with bitcoins , from that address , because Walmart has a white list common with those exchangers and only people on that list can make purchases.
Nothing new from "we only accept Visa and Mastercard , not AE"
The results will be something like:
-Walmart knows that you are a verified customers (they can have your id)
-People when exchanging bitcoins know that this guy has some verified papers.
-You know that you actually have some kind of ownership on that address and can prove in court that "You John , on 11/1/12013 sent to Michael 245 Bitcoins"
And on the surface everybody is happy , right?
People who don't want to enroll , are (
) not forced to enroll.
And I have that BIGGGG feeling I'm missing something right?
http://www.forbes.com/sites/kashmirhill/2013/11/13/sanitizing-bitcoin-coin-validation/
And next moment we have the reactions :
https://bitcointalk.org/index.php?topic=332918.0
Well , I went to :
https://coinvalidation.com/ , downloaded the pdf, for users , saw page with 3 rows and 100 words and nothing solid.
I think that we're got the wrong impression here. I saw the word "addresses" to many times in the forbes article and then this paragraph in the pdf files:
"We have developed tools and relationships that provide Bitcoin businesses with a full know your customer compliance suite. "
From my point of view I think the word Coin is misleading. My opinion is that the project is aimed at the addresses.
And I see a way it might actually work , but first let's assume those guys have a plan , and they have an ace in their hand.
Something like a big company wanting to start accepting bitcoins but concerned about the mess around it.
So , Walmart is announcing:
"We accept bitcoins""From cointrusted addresses only"
Most of the people will jump in ,and how can I get and use a cointrusted address?
It's simple ,
1) Go to any trusted exchangers , verify your identity and buy bitcoins which will be sent to a new address you specify
The address has to have a 0 balance and no previous history.
2) Now , you can go to Walmart and buy with bitcoins , from that address , because Walmart has a white list common with those exchangers and only people on that list can make purchases.
Nothing new from "we only accept Visa and Mastercard , not AE"
The results will be something like:
-Walmart knows that you are a verified customers (they can have your id)
-People when exchanging bitcoins know that this guy has some verified papers.
-You know that you actually have some kind of ownership on that address and can prove in court that "You John , on 11/1/12013 sent to Michael 245 Bitcoins"
And on the surface everybody is happy , right?
People who don't want to enroll , are (
) not forced to enroll.And I have that BIGGGG feeling I'm missing something right?
The main problem with this idea is the implementation. If the goal were merely to provide KYC and other regulatory solutions this may be necessary but as far as I know you don't do that for every little transaction. A transaction over $10,000 and the bank alerts that authorities as they should.
The implementation of this coinvalidation idea doesn't seem to be setting any limit on an amount of money. I've had the idea myself to provide tools for people to comply with the law but we also have to make sure the tools we build aren't the sort of tools which can be abused later by law enforcers.
Bitcoin is not inherently fungible. It never really was designed to be because the ledger always was public.
It was designed to be pseudo-anonymous and private. The main problem with this particular implementation is that it can easily be used later to block transactions, to prevent legitimate individuals from spending their coins. It empowers authorities in the USA or in North Korea to create blacklists and whitelists where certain addresses can spend their coins and not others.
There has to be a technical solution which we can come up with which cannot be abused easily by either side of this debate. The side pushing anonymity will have bad actors who will abuse anonymity. I'm not talking about Silk road. And the side pushing for taint lists and coin validation will develop technology and then attempt to abuse that as they are doing with Facebook.
If there is a search warrant or if I'm moving large amounts of money then of course that is when my address should go on a blacklist if it's pseudo-anonymous. From here I would have to give my identity or be blocked from moving a large amount of coins. I could agree with this if it were limited to that. The problem is what if I want to donate a small amount of coins or spend in a reasonable way and there is nothing connecting me to terrorism, money laundering or anything else. Why should I be investigated?
It's not optional to say they cannot investigate at all but it's also not optional to allow them to have free reign to investigate anyone for any reason.