Hester Pierce's announced today that she was working toward zero-knowledge methods of satisfying KYC requirements. Removing the personally identifiable information part of KYC processes would be good as far as hacks go, but is that the only problem with KYC?
The way it's used today has as much to do with source and destination of funds as it does with establishing identity. I'm curious then to ask, how would you feel about KYC if answers to the usual questions were stored as a set of yesses and nos in a database instead of specific addresses, dates-of-birth, amounts sent and received and so on? Are concerns greater about taint and financial privacy outside whomever's doing the KYC? It'd be neat to get some stacker perspectives.
No. It's also cross-session deterministic identifiers (and the IRS will demand that), but this is imho definitely a step in the right direction.
KYC won't die until it stops being useful for everyone involved.
If 100% of KYC submissions were just anonymous LLCs using PO Boxes, then that data isn't very useful to anyone.
It sucks that our society/government makes honest people have to lie, cheat, and steal to maintain their own safety and opsec, or they just avoid KYC services that could be net-benefit to them if it wasn't for the opsec degredation.
Either we'll run out of honest people (all pwned) or everyone learns to act like the scammers and have their AI agents generate/find them some credentials to open their accounts.
I am starting to think KYC is more a morality issue than a government issue. People like the steal sad to say but it’s glaringly true.
No one has developed an alternative to protect people personal property in the financial digital age. Thus everyone says KYC = bad but offer no real alternative or solutions to stop theft and when it does happen how to find the thief.
I bet you all the sats in my ln wallet that if the Coldcard victims can get their corn back and punish those who stole from them using KYC information they would do it in a heartbeat.
I don’t see the Odell’s of the world telling the Coldcard victims to use old fashioned police work to get their digital property back!
First humans discover an asset that functions independent of governments.
Then humans beg governments to control it because independence is hard.
Humans spend roughly the first 18 years of life with a big-old-wise parent to guard them from taking responsibility.
After they grow up, humans create parental structures out of governance, regulations, etc. so they can keep avoiding responsibility.
When you create a "responsible class" of regulators and representatives and trust them to look out for irresponsible people, they soon discover that irresponsible people are incredibly easy to take advantage of...
Not sure I agree with this. Who is begging for government control over bitcoin. It’s more a new technology emerges and the government tries to balance the impact on the overall population. Sometimes they get it right other times they don’t.
Some not all.
Yeah the wrong types of people become politicians that is why where we are today with archaic laws with no political will to change them like the Bank Secrecy Act which is down stream of all this KYC stuff.
Every company that implements KYC instead of shutting down or re-architecting a P2P alternative to their service
Every bitcoin wallet that has terms and conditions
Every software project with a license that relies on government to enforce (non-commercial clause, etc.)
Every company/individual that hires lawyers to tell them how they should use bitcoin
Everyone who files a police report when they lost some sats
Unlike traditional property, bitcoin does not need state-sponsored violence to enforce property rights.
No but it’s sets the laws for a civil society.
Are the keys themselves not enough information to act as identity? The whole centralized walled off identity system kinda works but is also very broken in many ways. Some would argue the same about public/private key pairs. I don't think a world of interoperability at the identity layer has ever existed.
Kyc seems like a pretty horrible way to try to prosecute crimes. It ultimately looks like the government demanding veto power over all financial transactions.
I read Pierce's comments yesterday, and while she says nice words, I didn't find her vision of zk future very compelling #1581059
"are words the only problem with philosophy?" - not russel
"yes, mister popper; and thank you for the conversation." - not lutzi
Yeah, the bigger issue is what happens to your financial history after you hand it over. That's where KYC gets uncomfortable.
Removing personally identifiable information (PII) through zero-knowledge proofs prevents database credential leaks, but it does not stop on-chain surveillance. The fundamental danger of KYC is transaction graph mapping: once a regulated platform links an identity to a withdrawal address, chain analysis algorithms trace every downstream transfer, change output, and merchant spend. Identity privacy without on-chain unlinkability is incomplete. To neutralize perpetual ledger tracking, collaborative transactions are required. WabiSabi clients like Ginger Wallet (with its out-of-the-box coordinator) or Wasabi unlink your transaction graph, ensuring future payments cannot be tracked back to your initial onboarding record.