Oddbean new post about login | logout I fear that the addition of DIDs on #Bitcoin by #Saylor may lead to the normalization of KYCed BTCs which could then be used as a standard for authorizing bitcoins to be off-ramped to fiat. Is this fear unfounded? What’s the use case of #DigitalID for #MicroStrategy? nostr:note1aed2j7cdrdggc027jcgxar3vnl8gwf2qu7a6lwcfpadrzmtpfnxq7vg9s3
DIDs by themselves don't normalize KYC. They are just key holder documents. There are other DID:methods that use the bitcoin blockchain as well, so that doesn't really do much. But companies and governments can build KYC on top of them. It's just like how government can force everyone to use Bitcoin to surveil every transaction everyone makes. Government can do that in many ways. It doesn't need bitcoin to do it. If voters let governments/companies do use decentralized stacks for their benefit, they will.
Indeed, I think the risk is for governments to require CEXs to adopt this system as a standard. #Bitcoin users may be required to link their #BTC with their #DigitalID every time they interact with a regulated entity (on-ramp, off-ramp and potentially regulated non-custodial entities as well). They may also require to specify any potential change of ownership when using these services. Someone transferring btcs to someone else without a change of ownership would then expose himself to unintended legal liability (what if bitcoins tied to someone’s identity are linked to a crime because this person didn’t properly update the ownership?). This has the potential to further increase the non-fungibility of Bitcoin and to equip chain #surveillance companies with a powerful tool. It doesn’t look good…
Yep, lots of companies are lobbying the government to use their credentialling stack. We have to fight that monopoly-making decision, not the tech stack.
I agree however the current tech stack and ecosystem around it doesn’t properly protect #Bitcoin users from interacting with the looming credentialing stack and the parts that help it (mixers) are being attacked. Not all is lost but Bitcoin still has a long way to go to win this war.
Tech can't protect itself against government. We can make it more difficult, like with mixers, end to end encryption etc, but in the end, laws and regulations will always trump it. Whatever tech stack plugin we create to protect bitcoiners can just be declared illegal by government. That doesn't mean we should give up an not try to protect, but we need to be conscious that we need strong, constant political pressure to actually solve it.
The risk is not so much for governments to deem Bitcoin illegal (of course tech can’t prevent this) but rather for the tech to fail to democratize its usage the way it’s supposed to work (P2P transfers that can’t be censored in the case of #Bitcoin) . Governments attempted to stop encryption but they fail because the tech succeeded at being broadly adopted and no regulation could stop this. Bitcoin tech hasn’t proven yet that it can be widely adopted in a fashion that is out of reach of the government. But the tech can still evolve and maybe #drivechain can fix this.
