Gavin, in case you are listening, here's my two cents for your CFR meeting: The rulers in high places are aware of Bitcoin by this point at its potential, and they recognize that the awful service provided by banks is leading inevitably to a shake-up that's going to involve technological improvements based on digital currencies. They accept this. Therefore their next step is going to be a slow noose-tightening. They will act incrementally.
Their number-one concern will be to protect their control over the unit-of-account. Their secondary concern will be protecting KYC/AML. I suggest you take advantage of this and get them on board with colored coins. You can point out to them that dollar-coin, euro-coin, rupee-coin, etc will enable them to protect their control over the unit of account, while simultaneously giving users the other benefits of cryptocurrency technology. Also point out to them that they will continue to have KYC/AML control if they do this, since colored coin issuers will have to by KYC/AML compliant when dealing with bank wires in/out.
Their number-one concern will be to protect their control over the unit-of-account. Their secondary concern will be protecting KYC/AML. I suggest you take advantage of this and get them on board with colored coins. You can point out to them that dollar-coin, euro-coin, rupee-coin, etc will enable them to protect their control over the unit of account, while simultaneously giving users the other benefits of cryptocurrency technology. Also point out to them that they will continue to have KYC/AML control if they do this, since colored coin issuers will have to by KYC/AML compliant when dealing with bank wires in/out.
Hey Chris -
Don't get me wrong - I respect the work you are doing with the OT concept. However, I fear you might be looking at the problem from too far back with your OT lenses. I really don't feel like offering up any bone is going to accomplish anything here. What's more, what bone _could_ be offered? Will Bitcoin, the base protocol, sprout colored coin garb? I think the chances are remote. We could offer up the next layer, but to what end? Distraction?
Maybe I'm just missing your point. What do you hope to accomplish, and how?
Currently anything Bitcoin-related has trouble getting a bank account.
Authorities fear losing control over the unit-of-account, and losing KYC/AML control.
Colored coins give authorities a way to support blockchain technology while preserving their unit of account. (Since colored coins are denominated in dollars, euros, etc) Also they will feel they can control the in/out process since the colored coin issuers will be KYC/AML compliant when sending/receiving bank wires.
This gives authorities incentive to allow colored-coin issuers to maintain bank accounts.
===> Once this is in place, we have many capabilities as a result:
-- Exchanges can operate anonymously and beyond any state control. To have an exchange, you must be able to trade one asset for another, such as dollars for Bitcoins. Therefore we become able to do this without having to send bank wires to the exchange. Instead, we just move Bitcoins and colored coins in/out of the exchange. (Exchange needs no bank account.) That way we can trade Bitcoins for dollars, say, yet without ever having to wire dollars in/out of the exchange. Therefore the exchange itself is now free of AML/KYC and free of the banking system in general. Exchanges can operate anonymously.
-- There is still AML/KYC when dealing with the issuer -- but most users will never have to deal with the issuer, since they can just buy/sell the colored coins from each other. The only users who will ever have to deal with banking regulations will be the ones who wire funds directly to the colored coin issuer -- but most users will never have to do that.
-- Thus: Exchanges free of the banking system.
-- And: Most users free of the banking system.
Whilst the old men in power are a little slow on the uptake (if they had any nous, they would have tried to come down hard on Bitcoin by 2011 at the latest), they are not, surely, this stupid
Using colored coins at the fiat-crypto interface would be like filling in cracks in a dam with paper. Once the *perception* of value shifts from fiat to crypto, it will be meaningless. You can't point a gun at perception, to botch a well known aphorism.
It's exactly like those recent senate hearings - everyone has a big lovefest and ignores the elephant in the room. What use are the throttles on the entry point once people cut out the fiat middleman and exchange services for bitcoin directly? What use are all the AML and tax laws then? Someone might think, no, don't be ridiculous, peoples activities will still be controlled by the government ... but in the long run, what are they going to do to stop people voluntarily giving each other goods and services? Ban the mail?
Also most of the world (that's even paying attention at all) is still operating under the delusion that "Bitcoin is not really anonymous, you can trace it". The technology is already in place; CoinJoin, stealth addresses, plus about three other ways that can easily yield practical anonymity.
If Gavin wants to talk to people like this (it might be better if he didn't, but OK), why doesn't he just tell them the truth? You could say it would cause panic and uproar, but it's coming anyway ...