The system change the world
Is going through must be chaotic because the true change is within each one of us.
#bitcoin
Discussion
I f bitcoin is the second commimg of Jesus, you Jeff must be Saint Peter.
What exactly is changing when we put our savings on a public, transparent ledger where the state has access to the KYC data?
Serious question, what will change (for the better)?
The first global free market that has ever existed. Prices falling forever through the competitive and cooperative nature of that as long as #bitcoin remains decentralized and secure. Governments and monopolies MUST lose the control over you b/c it doesn’t care if they want to debase their currencies against it.
The open, decentralized, and secure nature of the protocol is just the first layer.
Layers built on top like Nostr lightning, Cashu, Fedimint extend its functionality/privacy while preserving the critical trade offs in the base layer to keep it decentralized and secure.
I do not see how they lose control, they know who has it, so they come to your door and take it or put you in jail if they want it.
Cashu, Fedimint and custodial lightning are absolutely against the core values of Bitcoin. Not your keys, not your coins. Trusted third parties.
To me it seems it is going everywhere but not in the right direction.
I am a Bitcoiner since a very long time but i can not see the bright future for it anymore, it looks more and more like a tool to control us.
And as it is branded as a "store of value" now, it is easy to destroy that narrative. To me BTC lost most of its appeal which it had when it was a p2p digital currency.
I understand concern but there must be trade offs to scale to 8 billion people and to create privacy to make attacks harder. It fails if only a store of value (ie - becomes centralized and insecure) and that is why it isn’t just a store of value for me. (And many others). It is a currency and I put my time and energy into making it s
If the tradeoffs are removing the core values like self custody, it is the question if "this version of Bitcoin" delivers any meaningful change for normal people (who did not buy early).
The store of value argument is not taking into account that a sudden loss of privacy, eg. KYC data leaking from a big exchange makes everyone a target immediately.
Do you want a store of value where everyone in the world knows what you have and where you live?
The other thing is fungibility. Tainted coins are already a thing, AML Bot and Chainanalysis tools are used by exchanges and merchants already.
I had a case where BTC was rejected because "it was used for gambling 5 hops ago".
It was not me - but i know who used it for that. It was completely legal gambling. But still i could not use the BTC for what i wanted.
The non-fungibility will lead to the P2P situation that we will check each others BTC with tools like AML Bot to make sure we do not get tainted coins which are worth less or in the worst case have law enforcement blaming us for something the previous owner of the BTC did.
I do not see how this will end well. There is also a talk from Adam Back about that - but somehow this is being ignored even if it is pretty obvious.
How do you see those two points?
Human action is what is centralizing. Most people pricing bitcoin from a piece of paper - to get rich. That will centralize further because it is how people see the world. (Trust institutions, think prices naturally go up over time).
To prevent that outcome requires enough people who contribute their time in education, running nodes, economic nodes, spending in bitcoin, building additional layers, building companies that create value which “when” the attack comes (which it most certainly will) - there is enough knowledge, decentralization, power, privacy, etc to withstand that attack. (Or make the risk of that attack so great from the centralizing chain - that it is not worth it)
That is what is being built and those on Nostr are already a part of that future.
Giving in to a system of control only makes it stronger.
We are the change.
I’m bullish on freedom!
Your answer is completely unrelated to my points?
Ignoring them will not make them go away.
great points/cases in there Chuck, thanks for sharing.
Personally I think he didn’t ignore your points. While he didn’t directly addressed them. What can make all of us a bit anxious for sure :)
In my opinion, he is a believer that the evolution of what we know today as btc based on our future us being more educated people spending in bitcoin-only creating new tools/adding-nodes/better-layers will be ultimately overcoming the attack (some of the valid cases your are detailing).
“Human action is what is centralizing” - I read this as btc gets tainted because it is being centralized it in first place.
Didn’t want to add noise in here just trying to contribute to this discussion and learn from you guys
Appreciate your answer. I asked specifically what he thinks about those two points though, not for some random hopium maxi gibberish.
He either does not understand it, or he does not want to talk about it because he has no good answers.
IMO, if we do not have a good answer to those problems, BTC will likely fail as "freedom money" and as a self custodial store of value also.
There is even a talk from Adam Back talking about the specific tainted coins issue and that it can undermine trust in BTC fundamentally.
I understand why you need specific answers. IMHO, they are not yet available but will be in future if and only if everything goes well.
But I’m reaching my level of understanding (game theory) in btc at this point.
So I will remain as reader and see what others have to say about this
i wait for more than a decade on solutions to those two problems, much was promised in the past, nothing ever materialized.
if you want, read Hijacking Bitcoin. I am not a bcash promoter, but the book will give you a different perspective on what is happening with BTC.
I could read that but I need first you to answer the following two questions:
Do you want to see btc success in the future or it is about something else? How much time is worth for that to get materialized based on your time-preference?
i would love to see BTC succeed as a p2p electronic currency, still. I think we are late, 16 years is a lot - it is the same timeframe as from the commodore c64 to the playstation 2 - to put it in perspective.
And i think the time is running out.
I understand why you need specific answers. IMHO, they are not yet available but will be in future if and only if everything goes well.
But I’m reaching my level of understanding (game theory) in btc at this point.
So I will remain as reader and see what others have to say about this
You're making valid points and I have no clue how ppl can responsibly recommend kyc'ed services. It's putting people on a raid list.
Referring to tainted utxos, I think they'll become less of an issue when the need for fiat offramps is gone. This indicates that you'll most likely never enjoy the results of your savings, but your kids will.
IMO the leak of KYC and address data from one big exchange can bring BTC down as a store of value. Too many people will get seriously hurt.
And it is something completely outside of Bitcoins control.
On the kyc issue, it is true kyc is part of a system of control and an abomination and its constant leaking is an ever present and growing threat to everyone everywhere.
Leaving aside it is possible to acquire non-kyc bitcoin, important to recognise this issue applies even more so to all other stores of value reasonably available, certainly fiat. So I am not sure I understand your point of how bitcoin makes this worse?
On the tainted coins issue, again while this is a serious issue, it also applies to fiat and other mediums of exchange. With bitcoin they can't stop you receiving transfers without permission, while with fiat it is increasingly necessary to prove the exact source of funds, down to invoices, contracts and communications, etc before banks permit you to receive them - data which is far more dangerous when inevitably leaked It is also unclear to me how you think bitcoin makes this deteriorating situation worse?
Genuine questions.
When KYC data from a large exchange like Kraken or Binance leaks, criminals all around the world know who has a lot of BTC and where they live.
If that happens, BTC as a store of value looks way less interesting, no?
With the tainted coins - saying a problem exists in other systems too is not an argument in my opinion and it surely does not change the fact that there is this problem.
This is true of bank deposits, when data from large banks like JPM and NYM leaks, criminals all around the world know who has a lot of fiat and where they live.
So this is not a negative specific to bitcoin, no?
The fiat system provides no additional protection to violent attacks or extortion or confiscation than available to the bitcoin network. In my opinion, the fiat system provides provides less protection than many security models natively available in bitcoin.
Yes, I agree it does not change the fact that tainted coins is a problem, but I understood your argument to be that this was a specific problem to bitcoin, or one that is at least worse.
Further, in bitcoin solutions do exist to some extent, are possible in the future and are being built. There is no solution to this issue in fiat.
When I look at your arguments holistically, you seem to be arguing that bitcoin has not solved all the issue completely right away and therefore it is worse than other stores of value and is not going to end well. While I get the points you are making, I think the core of you point is fundamentally flawed.
Bitcoin is much easier to get because you have the keys. Criminals just need to use violence and you will give it to them. With a bank account you can not move money without third parties and KYC, much higher risk for a criminal.
The tainted coin problem is a problem of all transparent blockchains.
The alternative to BTC is not fiat but a better technology which offers privacy and fungibility.
Bitcoin was meant to evolve, and my argument is that it needs to evolve and solve those issues if it wants to be "freedom money" and a store of value.
As Jeff was not able to answer or did not understand my questions at all, i asked Deepseek to tell me what counter arguments it can find:
Counterargument:
Bitcoin advocates argue that privacy tools (e.g., CoinJoin, Wasabi Wallet, Lightning Network) can mitigate KYC risks by decoupling identities from transactions. Users can self-custody coins and avoid centralized exchanges altogether, reducing exposure to leaks.
Limitations:
Blockchain Transparency: Even with privacy tools, Bitcoin’s public ledger allows anyone to trace transactions if a single address is linked to your identity (e.g., via a KYC exchange withdrawal). Once doxxed, your entire transaction history becomes analyzable.
Regulatory Pressure: Privacy-enhancing tools face increasing bans (e.g., Tornado Cash precedent) or surveillance (e.g., OFAC-sanctioned addresses). Exchanges may blacklist coins mixed via Wasabi/CoinJoin, forcing users into regulated channels.
Practical Reality: Most users rely on KYC exchanges for onboarding. A leak like the Ledger Hack (2020) or Coinbase Data Breach could expose millions to targeted theft, extortion, or state persecution (e.g., authoritarian regimes).
Conclusion:
Bitcoin’s transparency is a double-edged sword. While "self-sovereignty" is possible in theory, most users are vulnerable to KYC leaks and chain analysis, undermining privacy—a critical feature for a true store of value.
2. Fungibility Collapse Due to Tainted Coins
Counterargument:
Bitcoin maximalists claim fungibility issues are overstated, arguing:
"Tainted coins" are a social construct, not a protocol flaw.
Merchants/exchanges rejecting "dirty" BTC are acting irrationally, since Bitcoin’s code treats all coins equally.
Over time, market forces will punish entities that over-censor, as users flock to less restrictive platforms.
Limitations:
Reality of AML/KYC Infrastructure: Chainalysis, Elliptic, and government mandates (e.g., EU’s MiCA) are embedding surveillance into the Bitcoin ecosystem. Exchanges freeze funds linked to gambling, mixers, or even benign activities (e.g., your case).
Legal Precedent: Regulators increasingly treat Bitcoin like a security, not a currency. If "tainted" coins are deemed illegal to transact with (e.g., tied to ransomware), their liquidity plummets, creating a multi-tiered market:
"Clean" coins (premium value).
"Dirty" coins (discounted value).
Network Effect Erosion: If merchants/peers demand AML checks for every transaction (as you experienced), Bitcoin becomes as cumbersome as traditional finance—but without chargeback rights or legal recourse.
Conclusion:
Fungibility is not just a technical property but a social one. Bitcoin’s fungibility is already fracturing under regulatory pressure, and its "censorship resistance" is increasingly theoretical for average users.
Broader Implications
These flaws intersect catastrophically:
Privacy Erosion → Fungibility Collapse: If most coins are KYC’d and surveilled, the minority of "private" coins (e.g., mined anonymously pre-2013) become ultra-valuable, creating a two-tier system.
Regulatory Capture: States could mandate "clean" coins for legal transactions, effectively nationalizing Bitcoin’s liquidity.
Bitcoin’s Response (And Why It’s Inadequate)
Lightning Network: Offers some privacy but requires on-chain transactions to open/close channels (still KYC-vulnerable).
CoinSwap Protocols: Theoretical improvements (e.g., BIP-47, Taproot upgrades) but face slow adoption and regulatory hostility.
Sidechains/Privacy Coins: Using Monero-like L2s (e.g., Fedimint) could help, but Bitcoin’s governance resists protocol-level privacy fixes.
Final Take
Your concerns highlight a fatal irony: Bitcoin’s promise of "being your own bank" requires near-paranoid operational security (e.g., avoiding KYC, using privacy tools), which 99% of users won’t adopt. Meanwhile, its transparent ledger and regulatory capture make it less private than cash or gold in practice. For Bitcoin to succeed as a store of value, it must solve fungibility and privacy at the protocol level—but its governance and inertia make this unlikely. Until then, its "digital gold" narrative remains precarious.
Seizure does not scale at an individual level. There will most likely be people who get their coins seized, yes, but those will be the people who didn't prepare and were unfortunately too care-free about their custody setups. This can be seen with the gold seizures.
Also, nationwide seizures are more indicative of a failing state rather than a failure of Bitcoin. If this were to come, it would be more of a signal for people to flee and for others not to enter that particular state. Those who own Bitcoin will be most well equipped to do so.
We saw with Covid that 90% of people will comply.
Especially when they know the state can see their addresses and balances.
Complying is the fault of the individual, not that of the technology. Again, those would be people who didn't properly prepare.
This is just childish.
Ad hominem for the win! Thanks for playing, better luck next time.
Your argument is childish. Not you, your argument.
When you grow up, you will learn the difference. 😘
Still an appeal to feeling and personal consideration rather than actual fact or reason (and you ended that with a direct ad hominem lol).
And with seriousness, how is it childish to take responsibility and/or sacrifice for your property? I would go to jail or die before giving up my keys. Those who comply are at fault for not taking responsibility, sorry not sorry.
Your argument is like: Taxes are no problem, just do not comply and do not pay them.
You can also comply and not pay them with different tax strategies. Again, it's your responsibility to prepare and your fault if you get got.
and yes, the second was a ad hominem and i am proud of you that your saw it 😉
WITHIN EACH OF US
❤️💚🧡
✝️
nostr:nprofile1qqsg86qcm7lve6jkkr64z4mt8lfe57jsu8vpty6r2qpk37sgtnxevjcpz4mhxue69uhkummnw3ex2mrfw3jhxtn0wfnsz8mhwden5te0wfjkccte9ehx7er9wf6kumn9wfejumn9w3mk7unt444ld5 SO WHAT YOU’RE SAYING IS…
EACH ONE OF US INTERPRETS THE CHANGE OF THE SYSTEM AS CHAOTIC BASED UPON OUR INDIVIDUAL LEVEL OF UNDERSTANDING OF THE SYSTEM…
AND IF THAT IS ACCURATE THEN YHE THE REAL IMPORTANT CONCEPTS TO UNDERSTAND ARE…
1. THE SYSTEM(S) IS/ARE CHANGING
2. THE MORE ONE UNDERSTANDS ABOUT HOW THE SYSTEMS HAVE BEEN BUILT - LEADS ONE - TO THEN BETTER UNDERSTAND HOW THE NEW SYSTEMS ARE BEING BUILT…
“THOUGHT EXPERIMENT TIME”
IMAGINE IF THE SYSTEM OF GRAVITY STARTED BREAKING DOWN AND THINGS HAD TO BE PHYSICALLY RESTRAINED TO BE HELD TOGETHER INSTEAD OF GRAVITY HELPING…THIS WOULD APPEAR TO BE VERY CHAOTIC TO PRETTY MUCH EVERYONE UNLESS YOU UNDERSTOOD THE PHYSICS BEHIND THE SYSTEM AND THOSE WHO DID WOULD BENEFIT THE MOST FROM MOVING INTO THAT NEW SYSTEM…. MUCH LIKE WHAT IS HAPPENING WITH THE SYSTEM OF COMMUNICATING VALUE BUILT ON FIAT VS BITCOIN
🎯 + that we are each a part of that change - like ripples across time and space. Ie - without our actions that arise because of the change in us (once we see, we can’t unsee) there is no change. We are both the map and territory.
“BOTH THE MAP AND TERRITORY”
SEEMS A LOT LIKE… LIVING IN AN ATOMIC WORLD AND A QUANTUM WORLD AT THE SAME TIME…
BEAUTIFULLY COMPLEX IN ITS SIMPLICITY
For those with eyes to see and ears to hear 🙏🏻💓🧬
Yes
When we change how we think about value, the system HAS to adapt. Bitcoin is the spark. How will you help spread the flame? #Phesky #bitcoin #BeYourOwnBank