You're making valid points and I have no clue how ppl can responsibly recommend kyc'ed services. It's putting people on a raid list. Referring to tainted utxos, I think they'll become less of an issue when the need for fiat offramps is gone. This indicates that you'll most likely never enjoy the results of your savings, but your kids will.

We saw with Covid that 90% of people will comply. Especially when they know the state can see their addresses and balances.

On the kyc issue, it is true kyc is part of a system of control and an abomination and its constant leaking is an ever present and growing threat to everyone everywhere. Leaving aside it is possible to acquire non-kyc bitcoin, important to recognise this issue applies even more so to all other stores of value reasonably available, certainly fiat. So I am not sure I understand your point of how bitcoin makes this worse? On the tainted coins issue, again while this is a serious issue, it also applies to fiat and other mediums of exchange. With bitcoin they can't stop you receiving transfers without permission, while with fiat it is increasingly necessary to prove the exact source of funds, down to invoices, contracts and communications, etc before banks permit you to receive them - data which is far more dangerous when inevitably leaked It is also unclear to me how you think bitcoin makes this deteriorating situation worse? Genuine questions.

Complying is the fault of the individual, not that of the technology. Again, those would be people who didn't properly prepare.

IMO the leak of KYC and address data from one big exchange can bring BTC down as a store of value. Too many people will get seriously hurt. And it is something completely outside of Bitcoins control.

This is just childish.

When KYC data from a large exchange like Kraken or Binance leaks, criminals all around the world know who has a lot of BTC and where they live. If that happens, BTC as a store of value looks way less interesting, no? With the tainted coins - saying a problem exists in other systems too is not an argument in my opinion and it surely does not change the fact that there is this problem.

Ad hominem for the win! Thanks for playing, better luck next time.

great points/cases in there Chuck, thanks for sharing. Personally I think he didn’t ignore your points. While he didn’t directly addressed them. What can make all of us a bit anxious for sure :) In my opinion, he is a believer that the evolution of what we know today as btc based on our future us being more educated people spending in bitcoin-only creating new tools/adding-nodes/better-layers will be ultimately overcoming the attack (some of the valid cases your are detailing). “Human action is what is centralizing” - I read this as btc gets tainted because it is being centralized it in first place. Didn’t want to add noise in here just trying to contribute to this discussion and learn from you guys

Your argument is childish. Not you, your argument. When you grow up, you will learn the difference. 😘

This is true of bank deposits, when data from large banks like JPM and NYM leaks, criminals all around the world know who has a lot of fiat and where they live. So this is not a negative specific to bitcoin, no? The fiat system provides no additional protection to violent attacks or extortion or confiscation than available to the bitcoin network. In my opinion, the fiat system provides provides less protection than many security models natively available in bitcoin. Yes, I agree it does not change the fact that tainted coins is a problem, but I understood your argument to be that this was a specific problem to bitcoin, or one that is at least worse. Further, in bitcoin solutions do exist to some extent, are possible in the future and are being built. There is no solution to this issue in fiat. When I look at your arguments holistically, you seem to be arguing that bitcoin has not solved all the issue completely right away and therefore it is worse than other stores of value and is not going to end well. While I get the points you are making, I think the core of you point is fundamentally flawed.

Appreciate your answer. I asked specifically what he thinks about those two points though, not for some random hopium maxi gibberish. He either does not understand it, or he does not want to talk about it because he has no good answers. IMO, if we do not have a good answer to those problems, BTC will likely fail as "freedom money" and as a self custodial store of value also. There is even a talk from Adam Back talking about the specific tainted coins issue and that it can undermine trust in BTC fundamentally.

Still an appeal to feeling and personal consideration rather than actual fact or reason (and you ended that with a direct ad hominem lol). And with seriousness, how is it childish to take responsibility and/or sacrifice for your property? I would go to jail or die before giving up my keys. Those who comply are at fault for not taking responsibility, sorry not sorry.

Bitcoin is much easier to get because you have the keys. Criminals just need to use violence and you will give it to them. With a bank account you can not move money without third parties and KYC, much higher risk for a criminal. The tainted coin problem is a problem of all transparent blockchains. The alternative to BTC is not fiat but a better technology which offers privacy and fungibility. Bitcoin was meant to evolve, and my argument is that it needs to evolve and solve those issues if it wants to be "freedom money" and a store of value.

Your argument is like: Taxes are no problem, just do not comply and do not pay them.

I understand why you need specific answers. IMHO, they are not yet available but will be in future if and only if everything goes well. But I’m reaching my level of understanding (game theory) in btc at this point. So I will remain as reader and see what others have to say about this

and yes, the second was a ad hominem and i am proud of you that your saw it 😉

I understand why you need specific answers. IMHO, they are not yet available but will be in future if and only if everything goes well. But I’m reaching my level of understanding (game theory) in btc at this point. So I will remain as reader and see what others have to say about this

i wait for more than a decade on solutions to those two problems, much was promised in the past, nothing ever materialized. if you want, read Hijacking Bitcoin. I am not a bcash promoter, but the book will give you a different perspective on what is happening with BTC.

I could read that but I need first you to answer the following two questions: Do you want to see btc success in the future or it is about something else? How much time is worth for that to get materialized based on your time-preference?

You can also comply and not pay them with different tax strategies. Again, it's your responsibility to prepare and your fault if you get got.

i would love to see BTC succeed as a p2p electronic currency, still. I think we are late, 16 years is a lot - it is the same timeframe as from the commodore c64 to the playstation 2 - to put it in perspective. And i think the time is running out.

Thank you, Jeff 🙏 Made it further than I would have 😉

“BOTH THE MAP AND TERRITORY” SEEMS A LOT LIKE… LIVING IN AN ATOMIC WORLD AND A QUANTUM WORLD AT THE SAME TIME… BEAUTIFULLY COMPLEX IN ITS SIMPLICITY

As Jeff was not able to answer or did not understand my questions at all, i asked Deepseek to tell me what counter arguments it can find: Counterargument: Bitcoin advocates argue that privacy tools (e.g., CoinJoin, Wasabi Wallet, Lightning Network) can mitigate KYC risks by decoupling identities from transactions. Users can self-custody coins and avoid centralized exchanges altogether, reducing exposure to leaks. Limitations: Blockchain Transparency: Even with privacy tools, Bitcoin’s public ledger allows anyone to trace transactions if a single address is linked to your identity (e.g., via a KYC exchange withdrawal). Once doxxed, your entire transaction history becomes analyzable. Regulatory Pressure: Privacy-enhancing tools face increasing bans (e.g., Tornado Cash precedent) or surveillance (e.g., OFAC-sanctioned addresses). Exchanges may blacklist coins mixed via Wasabi/CoinJoin, forcing users into regulated channels. Practical Reality: Most users rely on KYC exchanges for onboarding. A leak like the Ledger Hack (2020) or Coinbase Data Breach could expose millions to targeted theft, extortion, or state persecution (e.g., authoritarian regimes). Conclusion: Bitcoin’s transparency is a double-edged sword. While "self-sovereignty" is possible in theory, most users are vulnerable to KYC leaks and chain analysis, undermining privacy—a critical feature for a true store of value. 2. Fungibility Collapse Due to Tainted Coins Counterargument: Bitcoin maximalists claim fungibility issues are overstated, arguing: "Tainted coins" are a social construct, not a protocol flaw. Merchants/exchanges rejecting "dirty" BTC are acting irrationally, since Bitcoin’s code treats all coins equally. Over time, market forces will punish entities that over-censor, as users flock to less restrictive platforms. Limitations: Reality of AML/KYC Infrastructure: Chainalysis, Elliptic, and government mandates (e.g., EU’s MiCA) are embedding surveillance into the Bitcoin ecosystem. Exchanges freeze funds linked to gambling, mixers, or even benign activities (e.g., your case). Legal Precedent: Regulators increasingly treat Bitcoin like a security, not a currency. If "tainted" coins are deemed illegal to transact with (e.g., tied to ransomware), their liquidity plummets, creating a multi-tiered market: "Clean" coins (premium value). "Dirty" coins (discounted value). Network Effect Erosion: If merchants/peers demand AML checks for every transaction (as you experienced), Bitcoin becomes as cumbersome as traditional finance—but without chargeback rights or legal recourse. Conclusion: Fungibility is not just a technical property but a social one. Bitcoin’s fungibility is already fracturing under regulatory pressure, and its "censorship resistance" is increasingly theoretical for average users. Broader Implications These flaws intersect catastrophically: Privacy Erosion → Fungibility Collapse: If most coins are KYC’d and surveilled, the minority of "private" coins (e.g., mined anonymously pre-2013) become ultra-valuable, creating a two-tier system. Regulatory Capture: States could mandate "clean" coins for legal transactions, effectively nationalizing Bitcoin’s liquidity. Bitcoin’s Response (And Why It’s Inadequate) Lightning Network: Offers some privacy but requires on-chain transactions to open/close channels (still KYC-vulnerable). CoinSwap Protocols: Theoretical improvements (e.g., BIP-47, Taproot upgrades) but face slow adoption and regulatory hostility. Sidechains/Privacy Coins: Using Monero-like L2s (e.g., Fedimint) could help, but Bitcoin’s governance resists protocol-level privacy fixes. Final Take Your concerns highlight a fatal irony: Bitcoin’s promise of "being your own bank" requires near-paranoid operational security (e.g., avoiding KYC, using privacy tools), which 99% of users won’t adopt. Meanwhile, its transparent ledger and regulatory capture make it less private than cash or gold in practice. For Bitcoin to succeed as a store of value, it must solve fungibility and privacy at the protocol level—but its governance and inertia make this unlikely. Until then, its "digital gold" narrative remains precarious.

Thanks for all you do Jeff. I’ve learned so much.🐝😊

🙏

With the US government implementing a SBR and who may be set to follow Michael Saylor’s “Digital Asset Strategy”, it seems to me we are fast approaching centralization. Will Bitcoin as a “medium of exchange” be able to exist with this kind of centralized power?

Are you really a rockstar or an uncle