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Does Bitcoin have a hostage situation of its own?
2050 sats \ 27 comments \ @SatoshiNakanodo 10 Nov 2023 bitcoin freebie
U.K. regulators have served their people with yet another "blessing" to protect them from themselves. The Travel Rule for Crypto Assets mandates Virtual Asset Service Providers (VASPs) to share sender and receiver information for all crypto transactions.
If they want to continue doing business in the U.K., crypto exchanges will be compelled to collect user information and block transfers to any wallet not controlled by another regulated VASP.
Case in point, Gemini U.K. recently said they will block transfers of bitcoin unless going between "TRUST" verified Virtual Asset Service Providers (VASPs) a.k.a. KYC/AML institutions.

The question I've been asking myself is...

Will this ultimately result in a bifurcation of UTXOs – whereby, some quantity of bitcoin becomes trapped within the legacy financial system, segregated from the rest which can be spent freely?
Or, will this "trapped" bitcoin in time find a way to escape the VASPs and leak back into the private, non-custodial market? If so, how?
-- (Another possibility is that people are able to see the evil in this scheme and choose not to use VASPs to transact in Bitcoin at all. However, I am not an optimist.)
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92 sats \ 1 reply \ @OgFOMK 10 Nov 2023
I think the question here is, "Are you buying Gemini's Bitcoin?"
The "regulated" exchanges own their Bitcoin and if they do not give it directly to the address you want then they have not sold any to you. Instead they have exchanged your Fiat currency for another government "regulated" entity.
Not your keys, not your coins.
Many of us play this game. It's like musical chairs.
As painful as it might be you will have to not use any of the "regulated" is they work for the government.
My first Bitcoin purchase was in 2019 through Robinhood. I found out quickly that it was just in their system and I couldn't do anything with it. I sold it immediately and I had to learn how to self custody and where to go next.
I've done just about every stupid thing possible.
We really need to create a whole ecosystem where we can trade and earn in Bitcoin and to hell with the Fiat trolls.
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20 sats \ 0 replies \ @SatoshiNakanodo OP 11 Nov 2023 freebie
Yes. This.
As the remaining 99% of the world's population discovers Bitcoin, we really need their on-ramp to be non-custodial solutions INSTEAD of the usual Geminis and Coinbases of the world. This is where too many people start.
I'm encouraged by new tools like Mutiny Wallet which are both non-custodial AND non-dependent on centrally controlled distribution platforms. We need also more P2P marketplaces that cannot be interfered with.
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76 sats \ 2 replies \ @OT 10 Nov 2023
You might see a significant exodus from the UK with rules like this. Its bad for businesses set up in the UK who will be affected most.
The market might respond with more p2p trading. Just remember bitcoin can be bought from all over the world. They cannot stop it, just make it annoying for us (like everything else when interacting with the government).
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20 sats \ 1 reply \ @SatoshiNakanodo OP 10 Nov 2023
I agree.
I think it just depends on how motivated the citizens are to break free, and how far the rule-makers are willing to go to slow the exodus (ie. banning VPNs, blocking p2p websites, forums, etc).
Either way, a black market would likely grow from their efforts, and I think the differential in price between captured BTC and non-captured BTC could grow to be astronomical
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10 sats \ 0 replies \ @OT 10 Nov 2023
Is this law being talked about or has it been passed?
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10 sats \ 0 replies \ @TwoLargePizzas 11 Nov 2023
Here's the thing...
If I can't withdraw my Bitcoin from the exchange I won't be using that exchange anymore.
I will however find another way to buy Bitcoin.
If enough people think the same way the outcome is those exchanges becomes weaker and the P2P market gets stronger.
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181 sats \ 2 replies \ @Coinosphere 10 Nov 2023
The prices of these "trapped" bitcoin will not diverge as long as there are other countries that don't have these same rules. Prices will equalize globally even if inside that country there are 2 different classes of BTC. (Just like the USD doesn't diverge despite the dollar Blue rate in Argentina is so different from the govt rate there.)
I would think that inside the UK if that happens it will make the govt's actions stand out to the public as really obviously bad. So much so that within a year or two they'll have no choice but to repeal it or better. (Pendulums swing wild these days, so my bet is on much better.)
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10 sats \ 0 replies \ @SatoshiNakanodo OP 10 Nov 2023
The prices of these "trapped" bitcoin will not diverge as long as there are other countries that don't have these same rules. Prices will equalize globally
I'm not sure that this is true. You would think prices would equalize, if information flowed freely around the world. However, if you're trading fiat for BTC the price on the P2P market varies greatly from country to country (even after accounting for the fiat exchange rate). For example, check P2P prices in India vs. the U.S. – they are always much higher.
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0 sats \ 0 replies \ @_b_o_n_e_s_ 11 Nov 2023
i like your optimism of the pendulum swinging back. can only see it going in one direction though. they will try harder and harder to prevent money leaving the system.
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10 sats \ 9 replies \ @DarthCoin 10 Nov 2023
OK sell all your bitcoin now. Or better give them all to me. I will take care of them, no worry, I will deal for you with any gov.
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0 sats \ 8 replies \ @SatoshiNakanodo OP 10 Nov 2023
I don't understand. Why would I sell all my bitcoin?
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0 sats \ 7 replies \ @DarthCoin 10 Nov 2023
because you are afraid of that crap you've just posted.
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273 sats \ 6 replies \ @SatoshiNakanodo OP 10 Nov 2023
If the majority of people go through regulated exchanges for their transactions, and those people are blocked from moving their coins to anonymous wallets, then there will be two separate markets created – one trapped in the legacy financial system, and one free.
Personally, I tend to think of Bitcoin like oxygen. You can try to contain it, but only for so long.
I didn't post this out of fear or to make anyone afraid. I like to think about how the future might play out.
I was hoping someone like Darthcoin would have deeper thoughts than, "you are afraid".
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100 sats \ 0 replies \ @OgFOMK 10 Nov 2023
Your post here is thoughtful. I think the realization is that the Bitcoin is the property of the exchange until they send it to your address. Whatever that address is that you want (under your public / private key) If they do not send it to you in exchange for Fiat, then it is fraud.
Regardless of the rules the Bitcoin is not yours until you can send it where you want. So if you want to use Bitcoin you stay away from the fraudulent paper Bitcoin. This Bitcoin will be on paper only and it will end up as fraction reserve nonsense. The original UTXO to UTXO will be someone else's if you can not use it.
You'll have to earn it or just say, OK exchange assholes congratulations on your ownership of Bitcoin. HFSP because they can't use it either! It will end up getting "stolen". It should be entertaining.
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60 sats \ 3 replies \ @DarthCoin 10 Nov 2023 freebie
Will this ultimately result in a bifurcation of UTXOs – whereby, some quantity of bitcoin becomes trapped within the legacy financial system, segregated from the rest which can be spent freely?
The myth of authority is stronger in your mind... free your mind from that crap and live free.
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31 sats \ 2 replies \ @SatoshiNakanodo OP 10 Nov 2023
Ok got it. Darthcoin votes "no".
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10 sats \ 1 reply \ @DarthCoin 10 Nov 2023
Darthcoin never vote. Darthcoin doesn't give a shit about anything politicians do or say. Darthcoin doesn't give a shit about any so called "laws" (aka pieces of paper). Darthcoin is fearless.
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10 sats \ 0 replies \ @SatoshiNakanodo OP 10 Nov 2023
Nope nope... you definitely voted. I've got you down as a solid "no" vote.
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10 sats \ 0 replies \ @evanbaer 10 Nov 2023
+1 to Bitcoin as oxygen
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50 sats \ 0 replies \ @0xbitcoiner 10 Nov 2023
Travel Rule for Crypto Assets it's a real piece of shit. Fuck TRCA
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35 sats \ 3 replies \ @owleyedapprentice 10 Nov 2023
this seems very possible, and a bifurcation like this could very well cripple the network (and enthusiasm) quite a bit.
it's a form sabotage that needs to recognized for what it is, and properly addressed and discussed. good post.
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20 sats \ 0 replies \ @SatoshiNakanodo OP 10 Nov 2023
Interesting.
I'm not sure I see it crippling the network, BUT I can see a situation where captured bitcoin starts to trade at significantly reduced value compared with non-captured btc.
I mean it already does (if you've ever bought peer-to-peer you know you will pay a 5-10% premium for the privilege of not handing over your identity) but the differential could be in the hundreds of percents one day if these VASPs (and governments) begin to capture more and more coins within their firewall.
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42 sats \ 1 reply \ @_b_o_n_e_s_ 11 Nov 2023
there's two markets for USD in a place like Argentina, the government rate and the real rate.
it could also have the effect of highlighting the hypocrisy of the government regulations if the rate diverges significantly. people will vote with their wallet, they will want a better rate.
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0 sats \ 0 replies \ @SatoshiNakanodo OP 11 Nov 2023
Excellent points.
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21 sats \ 2 replies \ @jonatack 10 Nov 2023
My humble opinion is that if you're in the west and value your freedom, consider getting out while it's easier to do so, or still possible. Or at least develop an option or two away from the US/UK/EU/AUS/NZ.
Particularly since 2020, the writing has been on the wall.
In countries in the global south (El Salvador, for example, for bitcoiners), a common denominator among all the foreigners moving there is that it is an exodus from the decline.
An escape, an opting out, from a home country/system/empire where things are heading in the wrong direction, to a less-developed, often smaller country where things aren't perfect, but are going in a more positive direction, and where these emigrants from the west have more freedom, particularly soft freedom. And this makes all the difference.
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10 sats \ 1 reply \ @SatoshiNakanodo OP 11 Nov 2023
Indeed, everyone should have a plan B. I'm just thinking about the 99% who haven't yet gone down the Bitcoin rabbit hole. Most people aren't going to realize they should hop the fence until they're already trapped and caged.
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0 sats \ 0 replies \ @jonatack 13 Nov 2023
Yes, and the same seems true for many bitcoiners as well.
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