Leo Fernevak on Nostr: Thank you, and fair enough. I will always welcome dark money solutions, both on ...
Thank you, and fair enough. I will always welcome dark money solutions, both on Bitcoin L2-L3 and in other forms such as Monero. I don't use Monero personally but I oppose any government attacks against it.
In a free market everyone must be free to use dark money as their money of choice. Cash is historically dark money and I support people using any tools of preference in order to preserve their property rights.
Bitcoin functioning as a neutral, global store of value that cannot be controlled by nation states will benefit Monero indirectly, as Monero cannot be exchanged for CBDCs but can be traded for Bitcoin. There is a potential for mutual benefit.
I wrote a text on the game theory of AML regulatioms + tainted coins, and why AML and taint regulations will fail.
Ironically, they will fail *quicker* the more coins are tainted, due to market dynamics:
In a free market everyone must be free to use dark money as their money of choice. Cash is historically dark money and I support people using any tools of preference in order to preserve their property rights.
Bitcoin functioning as a neutral, global store of value that cannot be controlled by nation states will benefit Monero indirectly, as Monero cannot be exchanged for CBDCs but can be traded for Bitcoin. There is a potential for mutual benefit.
I wrote a text on the game theory of AML regulatioms + tainted coins, and why AML and taint regulations will fail.
Ironically, they will fail *quicker* the more coins are tainted, due to market dynamics:
quoting nevent1q…8s4nA few thoughts on the game theory of tainted bitcoin.
TLDR; taint cannot work over time.
Let's visualize a possible scenario where a jurisdiction, for example the EU, decides to classify certain bitcoin addresses as tainted.
A few expected outcomes:
1. Many entrepreneurs would likely leave the EU in reaction, either because they own bitcoin or because they consider the regulatory move to be a red flag indicating more coming authoritarian measures. If A happens, then a logical B can be expected to follow.
These entrepreneurs won't take their bitcoin *with them* because all bitcoin exists globally without borders and their bitcoin are already waiting for them in the new jurisdiction. Their bitcoin does not move when they move, but their spending is now relocated outside of the backwards jurisdiction.
2. Let's then assume that some entrepreneurs have had their bitcoins classified as tainted by the EU. As they settle in a new jurisduction - which doesn't care about the EU:s taint decisions - these "EU-tainted" coins are soon entering the economy and switching hands. Nobody in a free economy has any reason to care about the dictatorial phantasmas of the EU.
3. After these coins/sats spread in the free market economy, they will eventually end up in contact with the EU again. At that point, the coins are now integrated in the economy and the "EU-taint" will be considered obsolete.
If the EU decides to keep rejecting the "EU-tainted" coins/sats, the EU will lose out on more and more commerce due to self-quarantine. The number of tainted coins will grow over time and the EU will have to eliminate themselves from an in increasing amount of valuable trade.
Over time the taint policy will become so ridiculous and economically harmful for the EU that there won't be any public support to keep the taint regulations.
Besides, as the coins/sats have moved through the free, prosperous and just jurisdictions of the world where property rights are respected, the laggard economies that issued the taint will have little incentive to remain laggards. Or Lagarde's, as they may end up being called.
Don't be a Laggarde!
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