Indeed, I think the risk is for governments to require CEXs to adopt this system as a standard. #Bitcoin users may be required to link their #BTC with their #DigitalID every time they interact with a regulated entity (on-ramp, off-ramp and potentially regulated non-custodial entities as well). They may also require to specify any potential change of ownership when using these services. Someone transferring btcs to someone else without a change of ownership would then expose himself to unintended legal liability (what if bitcoins tied to someone’s identity are linked to a crime because this person didn’t properly update the ownership?). This has the potential to further increase the non-fungibility of Bitcoin and to equip chain #surveillance companies with a powerful tool. It doesn’t look good…
Discussion
Yep, lots of companies are lobbying the government to use their credentialling stack. We have to fight that monopoly-making decision, not the tech stack.
I agree however the current tech stack and ecosystem around it doesn’t properly protect #Bitcoin users from interacting with the looming credentialing stack and the parts that help it (mixers) are being attacked. Not all is lost but Bitcoin still has a long way to go to win this war.
Tech can't protect itself against government. We can make it more difficult, like with mixers, end to end encryption etc, but in the end, laws and regulations will always trump it. Whatever tech stack plugin we create to protect bitcoiners can just be declared illegal by government.
That doesn't mean we should give up an not try to protect, but we need to be conscious that we need strong, constant political pressure to actually solve it.
The risk is not so much for governments to deem Bitcoin illegal (of course tech can’t prevent this) but rather for the tech to fail to democratize its usage the way it’s supposed to work (P2P transfers that can’t be censored in the case of #Bitcoin) . Governments attempted to stop encryption but they fail because the tech succeeded at being broadly adopted and no regulation could stop this. Bitcoin tech hasn’t proven yet that it can be widely adopted in a fashion that is out of reach of the government. But the tech can still evolve and maybe #drivechain can fix this.
A truly decentralized multi headed monster is what we need.