On the 14th of March 2022 I posed these questions to Stacker News
Question: Are there mitigating technologies that would circumvent a government-enforced AML whitelist in:
- A technology that already exists that is part of Bitcoin?
- A technology that already exists in another crypto that would prevent this regulation (that can be incorporated into bitcoin)?
- A proposal for a technology that has not yet been implemented that could avoid this problem?
- Does L2/lightning already avoid this problem?
- Is there an enhancement to L2/lightning that could avoid this problem?
- Is this not a real problem?
The only response was a somewhat valid troll from @DarthCoin, and his conclusion is that Lightning fixes this. However, this is not necessarily true since you won't be able to run a self-custody lightning node without jumping through government regulatory hoops.
16 days later, on the 31st of March, the EU passed a resolution doing exactly what I asked whether there is any mitigation for this problem.
I have yet to find any proposal other than pushing self-custody bitcoin into the underground in such a regime. Does this mean that the only hope for Bitcoin under a oppressive government is to hide assets and do everything possible to obscure their expenditures?
- What when the today's privacy measures are found to be insufficient in the future?
- Is it not an unacceptable risk when you could simply comply and register your self-custody wallet with the registered agent or transfer your funds to your government registered subcutaneously implanted RFID wallet/identity transponder?
The question still stands: How do you spend into a bitcoinized economy when the government can see every transaction on the chain, and can punish both parties if either wallet isn't found on the whitelist (registered to an individual or business)?
Is civil disobedience (ignoring the regulation) the only solution?