Every Satoshi can be traced back to when it was mined. The IRS now requires Americans and resident aliens filing income tax returns to report on their crypto holdings. Lots (maybe most?) people use exchanges like CoinBase. (Remember, not your keys, not your coins.)
If the government believes (they do not even have to prove) your Satoshis were ever used for illicit transactions, they can legally seize those assets. (Sorry, we don't think you were involved, but these coins are criminals.) To simplify things they just need to show a judge reasonable cause of structuring sometime in the coin's history. That has to be super easy to do. https://www.goldinglawyers.com/structuring-cash-transactions
> Every Satoshi can be traced back to when it was mined
This is blatantly wrong, do you have a source for that? Transactions can have multiple inputs and multiple outputs; "which satoshi comes from which input" is not a valid question; transactions are about value sums of inputs and outputs.
Is there any reason to think that the taint bit wouldn’t be applied to all outputs from such a transaction, just as a mob money laundering operation didn’t avoid prosecution because some of the income was legitimate?
Most non-techies I know simply buy and sell from an exchange, never touching the real chain. For them, bitcoin is the number on the screen they see when they log in.
Unless the USA imposes the strict FATCA and AML to all global exchanges , forcing countries to act as if exchanges are banks and comply,It would be easy to just use non-American exchanges stay out of trouble.
Sure, your coins are where the government can's touch them. But if you do not comply with the IRS reporting rules and your body is where the government can touch you, watch out.
But you're right. If USG does go down this path of crypto suppression (and this is pure speculation at this point) US based exchanges are vulnerable first.
I imagine nothing like this would unfold without coordination with the EU and five eyes.
Tax enforcement prioritization roughly follows the shape of wealth/income distribution. Focusing on the long-tail isn't impactful, as far as fiscal concerns go.
You'd achieve about the same result tax wise w/ muscular KYC/AML requirements for crypto exchanges/custodians in the US as you would w/ a ban.
Saying "the government can technically do XYZ" is pointless when there is no precedent and it has never been challenged in court. What would the reaction be if the government bust into your home and took your wallet because one of the dollar notes in it was used for a robbery 10 years and hundreds of owners ago?
This this a known issue, not all coins are the same, but I read recently that there is work in progress to use Schnorr signatures that would fix this problem by mixing multiple signatures into a single one.
Structuring doesn't apply to cryptocurrencies and there is no reporting threshold to be avoided yet. There are some proposals to make thresholds. Structuring currently only applies to physical cash passing a boarder or physical cash entering or exiting a financial institution. It does not apply to institution to institution transfers of any type and it doesn't apply to cryptocurrencies at the moment. I’ve had this discussion before, FinCEN is trying to change that.
Because structuring is a criminal law, they would need to show a court a bit more to convict. But before a conviction they could make your life complicated with dumb rationale to a judge for a warrant or seizure notice, and that has nothing to do with cryptocurrency, everyone relies on the government and private persons not making their life complicated.
Yes. This would be new legal territory, but not radically new (IANAL). USG would certainly pick the case and the court to try it in carefully in order to establish the precedent.
Structuring regulations are very clear about physical cash in and out of a licensed financial institution (or avoiding declarations to customs). Most agencies and representatives have made it clear they aren't trying to debilitate bitcoin or bitcoin use. This fanfiction of the government not letting bitcoin be useful as a competitor is a weak argument mostly because the ship has sailed, about a decade ago.
Firstly, consider that the Indian government believes every citizen and resident to be a crook and a tax evader unless proven otherwise. That’s why it has been pushing for “cashless” (even after the callous and disastrous demonetization exercise in 2016 that outlawed some currency bill denominations), linking taxpayers with a poorly designed and implemented non-revocable biometric based number (called Aadhaar), pushing for this flawed system to be used everywhere, etc.
Next consider that the current regime has a charismatic leader who gets a lot of vociferous support for anything that can be spun into the “anti-terrorism” and “national security” angles.
Since cryptocurrencies are only used by terrorists and tax evaders dealing in drugs and such (this is a sarcastic take here, but is believed so completely by the supporters of the government), they must be banned.
I love when you get little glimpses like these into the mindset of leadership and realize they are just ordinary people who don't know what they're doing either. I'm not a crypto enthusiast but even I have to chuckle and shake my head at situations like this. An official cryptocurrency run by the Reserve Bank of India defeats one of the main selling points of a decentralized cryptocurrency...
> An official cryptocurrency run by the Reserve Bank of India defeats one of the main selling points of a decentralized cryptocurrency...
You can still have a centralized token asset as your currency. It defeats the purpose of open source and public blockchain utility, but gives a government massive control over its currency.
gives them an excuse to ban an uncontrollable currency/asset. But the paradoxical thing is that if the gov't creates their own crypto they control (and ban the "real" decentralized crypto), they give legitimacy to the idea of crypto, and thus, make bitcoins and other uncontrollable cryptos even more popular. You can't actually ban crypto, anymore than you can ban maths.
Except the act of filling in the form claiming to hold no bitcoins, while one actually having a seed phrase hidden constitutes fraud.
The government can issue an arrest warrant for you, and have you extradited from wherever you went.
Figuring out who to arrest is harder, but it's a pretty small pool of people heavily invested in bitcoin who have suddenly vanished abroad flouting lots of cash with no obvious source...
How precisely does one "leave their country for good"? Do you seek asylum? You can't actually just hop on a flight and go live someplace else without a visa, and that takes months to process.
Digital currency is no different that what already exists in terms of digital representation of one's holding. Really curious to see how the tax payer is going to pay for a glorified database and what value is derived from it.
If they are anything like the US, then they already have a sophisticated database of financial transactions in support of their tax system and national security apparatus.
It depends on the system used for transaction[0]. For transaction under $1300 settlements are instant, while for amount more than that it ranges from 30 minutes to 24 hours.
A centralized Digital currency has its place and is coming to all countries eventually. There are benefits such as easy disbursement of money to the masses (UBI) by depositing it directly into their wallets, efficient taxation and more. Look into CBDCs.
In my view, money is a technology, meaning that a money system does not have an inherent purpose, but is designed to serve specific purposes. For instance I think that the US money system is "designed" to serve as a medium of exchange, a temporary store of value, and a tool of government economic policy.
Bitcoin might have been designed with some other purposes in mind. It could also be co-opted by a government. For instance, I suspect that subsidized energy for bitcoin mining represents a government monetary policy, but I don't know the extent of the influence or its real purpose.
Moreover, like a technology, people will use money if it's useful to them. For instance people in countries with "bad" money will often use it for daily expenses, but move the bulk of their assets into instruments based on the currencies of the US, Europe, etc.
I’m far from an expert in these things, but to me the benefits of bitcoin are: 1) giving individuals a way to exchange money digitally without it being tied to their offline identity directly (cash) and 2) providing a currency that can’t be manipulated directly by government monetary policy. I assume banning it and replacing it with something from the government is intended to avoid those things intentionally, and isn’t some accident they stumbled into.
Indeed, I'd separate the two policies. On the one hand, providing a digital currency that works like their existing money system, is just an extension of their existing policy, perhaps a minor technological upgrade.
No, it just means of being one of the first goverments to take control of the cryptocurrencies, which will end up making these "billionaires" worth $0 (or "come clean" by paying big taxes for their money to transfer them to the official currency), and others who continue trading or offer support for it, go to jail.
Very optimistic outlook for you to take towards a government which has taken even more drastic steps in the past aimed at corruption to (from what I can tell) limited effect and great disruption to non-corrupt citizens -- thinking specifically of demonetization. This seems like "big stick" policy to me, a hammer looking for a nail.
Hardly surprising - India has been at the forefront of this insane "digital cash" only agenda that is being pushed worldwide. Their policies are almost always set by flown-in experts from the US and by random NGOs and compromised bureaucrats, who almost always give the same advice.
Little wonder that even with the pompous BJP at the helm, all they can manage to do is implement policies that they themselves had blocked the previous set of kleptocrats from implementing earlier.
Your comment is going to be an underrated comment.
However, there's also the notion of "tracking corruption".
China apparently is a cashless society (according to a Chinese person I interacted with recently). I'd imagine that if it's good for China, it's good for India.
Lot of countries are effectively going cashless by design or by market forces.
It is convenient and cheaper for everyone.
It is not necessarily better for privacy or human rights, it can be better for taxation and other government functions.
Whether anyone likes it or not, the world is moving towards this model. It is better to have controls and regulations on how the data will be used rather fighting about keeping cash.
Maybe in a semi-ideal world, but not in a country like India. Less than 30% of Indians own a Smartphone, which is where a lot of the "convenience" of going cashless comes from. The Indian government made a recent (superficial) push to get up to 80% of Indians a bank account (up from ~50% form a few years ago), but it doesn't take a FAANG engineer to realize that the majority of these people don't have easy access to banks, banking apps and especially something like crypto.
Going "cashless" has tremendous negatives for the world's poorest. India's demonetization push, which forced people to exchange their old notes for new ones, is a clear case study of how major change to currency has a disproportionate impact on the poor.
I don't like the Modi government's policies any more than the next person, however India will benefit immensely cashless precisely because of the problems of under banking to the population you talk about. You don't seem understand how difficult the average rural person has it because the country runs on cash.
I have worked in Micro finance in India ~2010-2013. I have spent some time studying and trying to solve this problem. The logistical challenges to provide banking for smaller communities is immense and costly. Despite government owning 69% of the banking sector and having mandates for unprofitable rural branches.
Microfinance was getting demand despite predatory interest >24% ? Why? Because there are no viable competitors offering less with less friction. Traditional loan sharks charge even more. State Banks and various coops are inefficient in their processes. Banks need a lot of documentation starting from PAN, salary and deeds which only landowners have, The banks are so far off physically for the rural workers, even if they could get financing the risk of multiple days of wages lost is too mush.
Most banks expect you show to regular income to get any kind of loan. If your bank is 10 km away and you make wages daily/weekly, it is not feasible to deposit and withdraw cash every time you need to, you are never going to be approved for the loan.
Indian banking system is simply not working for rural poor users, expecting a daily wage worker or NREGA beneficiary to go 10+ KM to withdraw cash from an ATM that they cannot read instructions is not viable. The traditional model of having middle men disburse cash is extremely corrupt and actual beneficiary gets a small fraction of the money.
Yes smart phone penetration is less ( although I suspect it is bit more than you say, given the number of WhatsApp users in India)
If we need a chance in hell to be able to service poorer part of the country, banking needs to be cheap and that is not going to happen at a branch and it has paperless as possible.
Cash is an expensive luxury the country cannot afford.
I assume the thought process was something like this: Indian government looks at cryptocurrency and think "Ok so this is like UPI (digital money) - but I can't trace it and that's bad" - so boom - make an official cryptocurrency which they can trace back to and restrict all others. I don't know how good of a solution this is, but, defeats the point of crypto nonetheless.
They've already built BHIM and UPI. People think the government are a bunch of dumb babus but they're sharp as fuck and realized bitcoin is a virus and total lockdown early is best.
If Indians want to go hold + transact cash in random BTC wallets then by all means they are welcome to do so illegally and subject themselves to scrutiny down the road.
Gov-supported digital currencies would mostly streamline things and replace existing bloated and slow programs. Imagine the current stimulus situation – instead of sending checks to people they could just press a button and immediately send credit to all citizens that have a certain account threshold or income rate. Currency units could be earmarked for certain retailers (i.e. food stamps, education, etc).
It's just a mandatory account in a National Bank[1] for everyone. With a debit card or an app in the phone, it's almost as good. The real question is why they need a new currency instead of using the current one?
[1] I don't know the name. Here in Argentina we have a "National Bank", and also the "Central Bank" that is somewhat like the Federal Reserve, and a few other national banks that are privatized and nationalized back from time to time. Also each Province has it's own bank. (And there are also private banks.)
There is no need to send checks to people unless it’s required for keeping records or purposes beyond money transfer. India has quite an advanced banking system where quite a large sum of money can be transferred in mere seconds or in several minutes round the clock anytime of the year from any bank to any other bank.
Its quite clear why they want to do this at this point of time. The problem is the floating rate of USD/INR as seen by BTC/INR or any stable currency/INR is slipping like crazy since they started providing stimulus to economy last year. Its so bad, that there is a hair cut of around 8% regardless of the platform. This is only going to become worse as more money is going to be printed this year to get the economy back on track.
No one can call out that the emperor is losing his clothes if they are terminated :)
Possibly more urgent policy reforms/legislation required in India than this:
1. Codification of the law of Torts.
2. No-fault divorce.
3. More devolution of powers and policy making to states.
4. Ending the practice of Unelected Governers.
5. Remove power of the central government to dismiss elected state governments.
6. Dismantle the British Era civil service designed to preserve undemocratic control over the population to a modern federal system where all decision making authority lies with elected representatives only.
7. Repeal of colonial era police and criminal codes, and moving to a more humane police and criminal justice system as in other democratic countries, including the establishment of jury system.
8. Give equal representation all states in the upper house as in the US senate(2 senator s from each state).
> 8. Give equal representation all states in the upper house as in the US senate(2 senator s from each state).
This is a terribly unfair system in the US, resulting in a voter from Texas (population 29 million) having 2% of the representation in the Senate as a voter from Wyoming (population 579000) or 5% of the representation in the Senate as a voter from Hawaii (population 1.4 million)
The system has its origins at a time when only land owning white men (by definition a minority at the time) had the right to vote, and senators were chosen by state legislators, not residents.
Only under that backward system could the current Senate seat allocation be seen as remotely rational, although it can in no way be viewed as just.
The Senate is intentionally designed to give more power to smaller states. Otherwise, the 10-15 biggest states could routinely gang up and pass federal legislation. Not a really nice outlook for a federal government.
The Senate was designed that way when the distribution of "Free white males 16 years and upward" - the only people who could vote at that time - was far more uniform across the states [1].
There was only 1 order of magnitude difference between the voting eligible population of the smallest state (Delaware) and the largest state (Virginia).
Today, that difference is 2 orders of magnitude, which is massive in comparison to what it was when the Senate seat allocation was designed.
Arguments for the preservation of that system are nothing more than shallowly disguised arguments for the continued selective erosion of voting power of individuals in high population states.
The US system isnt perfect, but arguments against the current allocation of Senators is effectively arguing that the Senate should be abolished (which would take a constitutional amendment). I think small states suddenly finding themselves largely powerless would consider secession if that were the case.
> I think small states suddenly finding themselves largely powerless would consider secession if that were the case.
I have little doubt they would, and in doing so start a war. After all, it's happened before, and many people are plainly agitating for it now.
It's the "my enhanced privilege or your destruction, choose one" argument, which is a clear demonstration of one way the system codifies structural inequality and is transparently anti democratic. In a similar way, corporate lobbying distorts democratic representation, and by all appearances, they overlap quite a bit, differentiated only by the industry sector and which Senator they support.
> The Senate was designed that way when the distribution [...] was far more uniform across the states
Doesn't this goes against your argument then?
At a time where most of the voting population was at its peak uniformity, the 2-senator-per-state model was invented to ensure that the bigger states could not bully their way in federal legislation.
It was invented at the time where it was the least needed, since as you said, voting population was very uniform, so they mostly want the same things.
No. It was also anti-democratic at that time, but because the distribution of the vote was an order of magnitude less divergent, and the only people who could vote were landowning white men, it was able to succeed politically as a compromise.
Since then, its anti-democratic effects have magnified as the population divergence between states has magnified.
Indeed. This is a problem that happens anyway. Getting rid of the Senate would make it worse. Just look what percentage of the western states is federal land, and what percentage of the Colorado river is claimed by California, both at the expense of people who actually live in those states.
There are a billion ways you can split a democratic body in to a majority and minority. We don't give the left handed, orphans, or people whose name starts with F extra voting power because the righties, parent havers, and all the other name start letters could gang up on them. So if being a minority isn't an obvious reason on its own to be given more voting power, then there needs to be more reason to do so for the states, and every time I see this brought up the only defence is that the small states would have a minority of votes.
> The system has its origins at a time when only land owning white men (by definition a minority at the time)
And even then, it was highly debated against, if I remember correctly even James Madison himself was against it, to say nothing of the anti-federalists.
In the end Madison saw it as a compromise towards the States, but after 200+ years I think the anti-federalists were right on this, it ended up like an aristocracy-like thing with too much power vested in its members.
The bicameral congress lets small states join and maintain membership in a union safely. It is a net increase in the people's representation and this has only become moreso in the era of popularly elected senators. India, with its historically fraught relations between ethnicities, religions, languages and social ranks, would benefit greatly from such representation.
> It is a net increase in the people's representation and this has only become moreso in the era of popularly elected senators.
It's a net zero increase in the people's representation. It is a redistribution of representation toward smaller states, which has accelerated as state populations have diverged.
A multi-cameral legislature is a net increase in representation because it forces national considerations to be examined multiple ways. The increased attention and varied perspective represents the beliefs and desires of more people than just a majority as measured one way (e.g., by political party.)
By contrast, a single-house legislature fulfills the desires of a national majority population the most quickly, which is what you are advocating for. This is at the expense of more careful consideration.
In other words, we do not agree on the definition of representation as you see it as maximizing activity and I see it as maximizing consideration.
> In other words, we do not agree on the definition of representation as you see it as maximizing activity and I see it as maximizing consideration
The only thing it maximizes today is the continuation of hereditary and tribal concentrations of political power. It's a hostage situation, as the secessionists honestly will tell you.
While I appreciate your zeal, I suspect we will not proceed to real discussion. Setting aside that countries with histories different than that of the United States use bicameral legislature, consider how multi-cameral legislature might benefit a country even when one, relatively uniform, political party controls all houses.
Like the internet, government used to be more decentralized. States were the dominant law givers, and it meant that power centers were more decentralized and local to the people being governed. Instead of most laws that directly impact your life coming from far away in Washington DC from politicians you will never meet and can't influence, you had laws from more local government that you had more of a chance of participating in and influencing (e.g. for the things that mattered you had much more _meaningful_ representation). When states could elect senators, it had more of a chance of keeping that power decentralized. Now government power, like the internet, is increasingly centralized which makes it a battle of the federal government to make the entire country do what "our side" wants. It would be better if most laws were decided locally in your state or city-- and other states or cities could do things differently. That would be good for everybody.
No it balances the power between the states. The federal government should not be involved in day to day affairs of the general populace. As it was originally conceived it was a government of enumerated powers.
The house represents the people, the senate the states. In fact, allowing the direct election of senators was one of the worst decisions ever made.
> The federal government should not be involved in day to day affairs of the general populace.
This is an argument that the Senate - a part of the federal government - should have less power than it does today, much as the House of Lords' power has diminished in the UK.
I'd argue the opposite - currently, the Senate is where legislation goes to die after being passed in the house (which arguably represents the will of the people, at least in theory). The government would be more involved in the day to day affairs of people if the Senate was weakened or eliminated.
Yeah, it's called "the great compromise". During the days when the founders were debating majority rule vs minority rights, they couldn't decide what to do. So they created two houses that both have to coordinate to pass law, but provided a few escape hatches.
Random, but this is also why adding Puerto Rico as a state is extremely threatening to the political paradigm today. It would add 2 extra senators, who would most likely be democratic.
The concept of marriage in a tradition-based society like India has a completely different meaning than "let's voluntarily have a contract, and we can break it off any time we feel like it."
In order to protect the sanctity of marriage (straight or gay, I support both), the government must resist calls to make it easy to divorce. Divorce must be a painful, punishing process if society is to continue to take marriage seriously. (It must nevertheless be possible for either party in the marriage to initiate a divorce to completion. That's non-negotiable.)
Just my view on this subject. And I accept that others with different experiences than mine may have different views.
Divorce should be easy. Marriage is not which needs protection and government meddling. Two consenting adults should choose to live together or apart as they feel fit. I would resist any call to make the government a part of our personal lives. Dangerous proposition to say the list with no limit to when we can draw the line.
I don't see why marriage should be a legal process "provided" by the state. People from different cultural and personal backgrounds have differing views on marriage. You think divorce should be difficult so that people take marriage seriously, but there are likely many others in your country that would vehemently disagree. Even the choice of words, "sanctity", suggests to me that marriage would be better served as a purely religious ceremony. The government can then provide the legal aspects of today's marriage in some kind of "registered partnership", which would have none of the cultural baggage and be purely functional.
There are so many horror stories of people committing suicide because of the anguish caused by husband/wife. If you're married, it's up to you to maintain its sanctity. Don't expect anyone else to care about your marriage. Least of all, our incredibly corrupt government machinery. "No fault divorce" spares the suffering spouse from having to legally prove a lot of things that happen in private.
Can't a tradition based society just use tradition to keep divorce painful and punish those that do it? Like the core aspect of a wedding is to bring everyone you know together so you can tell them all at the same time "I promise to stick to this person". If you want that to have weight then just treat it like it has weight. Shame your friends in to staying married if they talk about considering divorce, and shun those that go through with it anyway.
I understand the concept of having different views of how serious of a commitment marriage should be, but I don't understand why "I want things to be this way" automatically means "the government should make things this way". They're the scariest institution that exists because of the overwhelming power they wield. Hell, they're largely defined by it. Bringing the government in to play for every little thing seems to me like buttering your bread with a scimitar.
How about make marriage harder to get and divorce easy? That way people don’t get married without earnestly wanting it and don’t get trapped in agonizing mistakes.
> In order to protect the sanctity of marriage (straight or gay, I support both), the government must resist calls to make it easy to divorce. Divorce must be a painful, punishing process if society is to continue to take marriage seriously.
As much as I think this proposal is unneeded, harmful, draconian and problematic in other ways, I disagree with this apple-to-oranges what-aboutisms in legislation.
You can absolutely attempt improvements in one dimension while othe r more important ones are sorely neglected.
The article is unclear abot the panel, buit I guess they have little impact on the issues you mentioned.
> How is the state taking a monopoly on crypto "better than now"?
India has a functioning payments system. It has a dysfunctional tax system and a massive black market. Banning cryptocurrencies doesn’t really do any practical harm. It does take away, or at least make more difficult, a major route for illicit payments.
I think a global, decentralized pyramid scheme is fairly harmful - at least to the later adopters left holding the bag, and then the growing "army of HODLers" who are aligned financially to further adoption to realize gains or try to break even again; including the danger of regulatory capture.
> 8. Give equal representation all states in the upper house as in the US senate(2 senator s from each state).
I am sorry, but we certainly do not need the worst parts of the US system. It is not just bad. It is catastrophic.
Having 2 elected houses is monumentally stupid idea that allows politicians to trap the system in blockages, while pointing fingers at each other for no repercussions.
> Codification of the law of Torts.
I hope this never happens. The super litigious part of America through civic laws leads to a lot of services getting needlessly expensive.
________
India has big problems, but almost none of them are the ones you mention.
> Having 2 elected houses is monumentally stupid idea that allows politicians to trap the system in blockages, while pointing fingers at each other for no repercussions.
A democratic system's main concern is not efficiency, but rather robustness of the democratic process. Authoritarian states are much more efficient in passing legislation, but at what cost?
Checks and balances are part of any functioning democracy. Sure they make things less efficient, but once you take them out, you end up with a tyranny of the majority.
8. There is no reason to give equal votes to all states. Why should citizes have unequal voting power ?. It is undemocratic in the U.S, The amount of power conservatives is disproportionate to the actual percentage of the population that wants them.
7. Jury system is not without its flaws. You talk about colonial era policy reformation. Juries are a commonwealth tradition! Mostly colonial countries have them. india had them till the 50-60s, it was intentionally removed as part of justice reformation.
5. In a federal or union government the state should have this power. The integrity of the state requires this power. This excerise of this power needs strong checks and balances in place , but lack of adequate controls is not a reason not to remove it entirely.
6. Elected officials always have final decision making power. Civil servants are career professionals sure have the ability to influence the decision making in what and how they present information to elected officials, abolishing civil service is basically like having a company with only senior management and no middle management. Who will execute the policy decisions?
4. Governor's power in states (not union territories or ncr) is actually pretty limited and largely ceremonial. The president and governors are artefacts of transforming from a colony. They don't have much power constitutionally by design. Electing them won't solve the problems of the office, they will just influenced by corruption by needing votes as before .
Unequal voting power doesn't just arise from unequal votes, it also arises from correlated/block votes.
Making votes unequal can counteract unequal voting power.
Unequal voting is one of the reasons that e.g. people in urban centres can't just capriciously turn the far away state of Wyoming into a poorly managed nuclear waste dump.
Nevada is a poorly managed nuclear waste dump. There is nothing its citizen can do. 85 % of Nevada is federally owned and there zero recourse for its citizens on how that is used.
49% of land in Wyoming is owned by the Federal government and the federal can and will do as it pleases with the land. The two senators are not why Wyoming is a nuclear waste dump.
The Senate structure all through U.S. history is vestige of the comprise between souther slave owning and northern factions. The number of states, or what area actually should be state was never carefully planned or designed to protect any minorities, it was always political decision to keep power balanced from day 1.
It is political fiction to explain it as to give minorities rights, rural rights were never the intent, no document ( Bill of rights, Constitution etc) actually talks about any rural or minority rights being protected , they instead talk about 3/5ths instead. It was always about slaves, it was a huge part of the economy for the southern states.
So basically, "We think it's time to steal the tech, ban any further innovation, and implement our own version that subverts the entire point of it to begin with"?
My views on the ban on cryptocurrencies are same as an average HN user although I don't have any. But my views on official digital currency in India could be different i.e. I would welcome it.
Just because if it enables in the distant future the ability to monitor where every paisa of my tax was spent on down to the lowest level e.g. It was used to buy the tiles for the construction of a public toilet in X village; it's certainly possible with blockchain.
Bitcoin is more of a holding; last-mile transactions are better made with different cryptocurrencies, such as Monero. With Doge being great for tossing around on the internet for the more trivial things.
I also feel the same, the digital brings transparency and blockchain can be used to track it entirely how paisa is spent if someone is willing in it. Still have to see how implementation is, we don't have to be pessimistic right awah
Tomorrow BJP/CONGRESS can be tracked. Make political finding only by e-currency only for transparency sake.
I don't like 1984 like scenarios but also e-currency is welcome step from my side too.
Just wondering, I don't care much about cryptocurrency, but I do realize that we need cryptocurrency (as a side effect of blockchain) to make the blockchain secure (making it an incentive to run blockchain nodes).
Assuming that indeed we as humanity need blockchain (and decentralization technology) in the future, can a blockchain or any other decentralization technology work without cryptocurrency (or any other incentive for that matter)?
Nope. Not in anytime soon. India will wait and see what other countries do. Probably there will be a terrorist attack somewhere and they will find out he used crypto for everything and banning of crypto will stop. RBI said they are banning crypto few years back and people are still doing it, then found RBI didn't ban, they just requested people not to use it.
I think this is a needless and draconian proposal.
If the government stops meddling with the constitutional rights of its citizen subjects, restore Right to Information (RTI), remove election fraud and fundraising which is tremendously boosting the currently elected government - they would have bestowed a huge favor to its citizens and the future generations.
I think this is only the beginning, as bitcoin becomes more and more popular, countries are going to start becoming scared of it. Bitcoin cannot be controlled by the government and it is almost impossible to trace. There are bitcoin mixers available which can obfuscate transactions too. Black Money is a huge problem in India, and bitcoin transactions pose a major challenge to law and tax enforcement. As it starts to become a problem in other countries, I'm sure they will follow suit.
"it is almost impossible to trace."
I always struggle with this argument. Literally every tx is on the chain. Sure, they can obfuscate and make tracing more difficult, but the data is still there to be analyzed. At some point the user will likely try to receive the crptyo and cash out at an exchange, or purchase goods and services through a regulated entity like paypal. That's where the gov can scrutinize and take action, which is why KYC is in place at Coinbase and other US exchanges.
To curb nefarious use across borders, seems like the problem may be that more exchanges need KYC laws across the globe, not just in USA, and there would need to be some interpol-like oversight.
A globally public ledger seems like a tool, not a hindrance, against "Black Money". We just need more global cooperation and oversight between governments tracking the exchanges.
Bitcoin is not only possible to trace, it is arguably becoming easier to trace than things like cash. In addition it has started to degrade in some of its decrentalizing aspects which opens up lots of vulnerabilities to being subverted by the government. One example is the supply chain of mining.
If they pull both of these things off it may be bullish for precious metals.
People will always want stores of value outside of monitored and adulterable (is that a word? hope the meaning is clear) centralized currencies. And the more trust is broken by the powers controlling the centralized currencies the more people will seek options to preserve and transfer wealth.
They would essentially drive it underground so that if you bought or sold or transacted in crypto you would have to do it through the equivalent of dark alleys or obscure smoke filled venues.
Something like the contrast between trying to procure cocaine vs aspirin
If I were a state I would make bank to track those wire transfers. A sufficient amount of them without reason would make authorities ask questions... Like are you running some sort of business or something? Why aren't you paying us taxes that you potentially owe?
To all Indian and non-Indians alike, a simple exercise will tell you a lot about the challenges the country faces from a security stand point.
Enumerate all the countries around india,look at the political systems, demography, civil wars and genocide. India is a oasis in the region, to keep ot safe is a herculean task.
And believe me you, until very recently the US and co often backed unsavoury elements animical to Indian interests due to political and strategic compulsions.
It will be highly interesting to see what happens here, and what the results are.
Let's suppose, hypothetically, for the sake of reasoning about the future, that India passes this law.
OK, so now India has an official, single, state-sponsored cryptocurrency, er, "digital currency".
Well, India still needs the Internet to function to do that.
If the Internet is still functioning, and we presume that it will be, then how are they going to block other cryptocurrencies, er, "digital currencies" from being transacted?
Well, it could be China to the rescue!
China's firewall "block out all other countries' Internet" technology that is!
But if they use something like that, if they create a "walled Internet garden" in India, then what happens to Indian Citizens who travel abroad, and want to transact in India's digital currency?
In fact, what happens if two people, who are not Indian, who are not located in India, want to create a transaction in the new Indian digital currency with one another?
In other words, what are the rules of that game?
What happens if you have two or more Indian Citizens, who have accounts with the new digital currency, who act as minature "bankers", (that is, to produce surety/insurance/act as a source of trust) who then underwrite contracts which can be paper or digital, where these contracts are detached from the system, and can be traded by any number of other people in any number of other countries?
Make that practice illegal?
You could -- but this is sort of how paper currency first became valuable -- because it could be used as a proxy for gold (the goldsmith being the party that brokers the trust).
Also, it's sort of what commercial paper and stock markets and derivatives do... there's an underlying object of value, and then there's a piece of paper which grants some form of control to the underlying value, and a "trust broker" that guarantees that that relationship holds...
Make that practice illegal and you've basically banned stock markets and commercial paper of all sorts.
The banks and major financial players (who are well connected politically in whatever country we want to talk about) -- won't have that.
So it'll be interesting to see how this plays out, if India can control it, or if, more than likely, "creative" people in the finance markets will find ways to game the system...
Of course, the only other option is to let all of those uncontrollable digital currencies proliferate.
I'd say that India, with respect to creating this digital currency, is "damned if they do, and damned if they don't"...
In other words, there's no simple solution...
But, on a positive note, 10+ years or so into the future, future historians and policy makers should be able to get a whole lot of information as to how this played out, what was negative, and what was possitive, the effects and ramifications...
I can't argue with you. However, I'm often unsettled when people envision such a gulf between them and the political leaders in their nation. I fear that this makes people say, "oh well, the government are idiots, but there's nothing I can do". I wish I knew the formula to improve state leadership, but I hope you never quit applying pressure to those in high office in India.
Every Satoshi can be traced back to when it was mined. The IRS now requires Americans and resident aliens filing income tax returns to report on their crypto holdings. Lots (maybe most?) people use exchanges like CoinBase. (Remember, not your keys, not your coins.)
If the government believes (they do not even have to prove) your Satoshis were ever used for illicit transactions, they can legally seize those assets. (Sorry, we don't think you were involved, but these coins are criminals.) To simplify things they just need to show a judge reasonable cause of structuring sometime in the coin's history. That has to be super easy to do. https://www.goldinglawyers.com/structuring-cash-transactions