The battle for how to regulate cryptocurrency might handicap the entire value proposition if we simply apply the same old rules to a new way of moving money around.

cross-posted from: https://exploding-heads.com/post/54762

Removing censorship resistance defeats the entire purpose and value proposition of cryptocurrency. Cryptocurrency is supposed to be about banking the unbanked, about granting open access to financial tools, about empowering otherwise unempowered people. There’s nothing valuable in remaking the same financial system – which caused these problems in the first place – with a new, fancy crypto wrapper that openly welcomes censorship just because it is new and fancy.

Crypto means absolutely nothing without censorship resistance.

Censorship resistance without privacy also doesn’t really matter. And that has been an issue with transparent networks like Bitcoin (which is very critically not anonymous; Bitcoin maintains a public ledger of transactions complete with identifying addresses and balances. It is quite literally the opposite of anonymous, especially if you are new to using the network).

This is something we saw in February 2022 when Canadian truckers protested a vaccine mandate. While the protestors were able to receive funds via Bitcoin, Ethereum and other networks, the transparency of these blockchains made it practically impossible for the protestors to withdraw that money for fear of the Canadian government freezing or suspending their bank accounts.

So, sure, it’s true that someone can send me bitcoin (BTC) even though the government doesn’t want me to receive it. That’s because the Bitcoin network is censorship resistant. But if the government can trace the transaction and see that the bitcoin came from you to me, then it could do something about the fact that I did receive funds from you outside of the Bitcoin network.

We need censorship resistance and we need privacy.