Editors Note: This article comes fromCarbon chain value (ID: cc-value)Editors Note: This article comes from
Carbon chain value (ID: cc-value)
, Author: Wang Zelong, Compiler: Tang Han, released with authorization.
For a long time, Bitcoin has even said that one of the commendable features of cryptocurrency is free currency, that is, the owner will not lose control over it due to any external influence, and it can even be considered as a sovereign currency. Parallel non-sovereign store of value. However, the petro coin that happened in Venezuela, the bitcoin addresses of two Iranian citizens in the Atlanta cyber attack incident, I was sanctioned and banned by the United States, and Bitfinex Tether were hit by the NYAG, all of which make people re-examine the relationship between bitcoin and politics. relation.
On Tuesday, more than 8,000 Atlanta public servants finally received the long-awaited notice that they can turn on their computers.
In March 2018, the New York Times reported that Atlanta was hit by a cyber attack. For nearly a week, major public facilities and institutions in Atlanta, including national laboratories, universities, government transportation departments, hospitals, and more, were hit by ransomware attacks that instruct victims to pay Certain bitcoins to unlock the computer.
In fact, in addition to the main disaster area Atlanta, Los Angeles, San Diego, Kansas and other areas have also been affected. It is said that this is one of the most serious cyber attacks that the United States has encountered in this century. The hackers managed to get bitcoin worth $51,000 at the time, and the victims spent more than $30 million to repair the computer system and restore data.
As the U.S. Department of the Treasury determined that two Iranian citizens, Ali Khorashadizadeh and Mohammad Ghorbaniyan, were involved in assisting hackers belonging to the Sam Sam Group to realize their bitcoins, the duo and their bitcoin addresses were listed in the Treasury’s Office of Foreign Assets Control (OFAC) Special Persons List and Blocked Persons List, which means:
All property and interests in property in or in transit in the United States, owned or controlled by U.S. persons, or designated persons in or in transit in the United States are prohibited, and U.S. persons are generally prohibited from dealing with such persons.
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For a long time, Bitcoin has even said that one of the commendable features of cryptocurrency is free currency, that is, the owner will not lose control over it due to any external influence, and it can even be considered as a sovereign currency. Parallel non-sovereign store of value. However, the petro coin that happened in Venezuela, the bitcoin addresses of two Iranian citizens in the Atlanta cyber attack incident, I was sanctioned and banned by the United States, and Bitfinex Tether were hit by the NYAG, all of which make people re-examine the relationship between bitcoin and politics. relation.
What is the relationship between Bitcoin and the government? We might as well start the discussion with the possibility of a Bitcoin ban by the US government.
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Possible Incentives for a Bitcoin Ban
Although Bitcoin has become a force to be reckoned with over a decade in its history, it could still face a ban by the U.S. government — and so could other permissionless cryptocurrencies like Bitcoin. fate.
While banning is technically impossible due to the peer-to-peer nature of such open, permissionless networks (anyone can run a full node), governments can introduce draconian regulation for reasons including but not limited to :
1. Criminalize all cryptocurrency/dollar transactions in the name of endangering national security - thus making it impossible for all centralized exchanges to conduct business - including Coinbase, Gemini and others.
3. Imposing higher import taxes on ASICs and other mining-related hardware. The US government may use anti-China sentiment to tax imports of Bitcoin mining-related equipment as part of the trade war.
4. By gathering enough hashing power to launch a 51% attack, and deeply reorganize those PoW blockchains that have not implemented a checkpointing system, in order to shake the confidence of relevant investors, cause the price to drop, and reduce the number of attacks the cost of.
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The Phantom of Data Analytics Companies
Behind the repeated sanctions, bans and confrontations of the cryptocurrency addresses and personnel and companies suspected of violating regulations in the United States, it may be the phantoms projected by a group of blockchain analysis companies that support the governments gradual infiltration into this decentralized world. .
Blockchain data analysis is a field with a long history in the industry. Relevant companies are often responsible for providing legal and policy compliance matters, tracking and analyzing ransomware, dark web and other illegal and criminal activities, and some also track investment companies in the industry The dynamics with financial companies and the exploration of potential assets can provide more perspectives and information for people inside and outside the industry.
A report released by Diar on September 24, 2018 strongly demonstrates this relationship between the two. The report pointed out that the analysis results of blockchain companies can be used by financial institutions or banks to track the implementation of AML and KYC, and can also be used by law enforcement agencies to improve their information, so as to quietly crack down on anonymous cryptocurrencies. Illegal activity under the wallet address.
Diar also listed detailed data. As of the release of the report, the US government agencies have purchased $5.7 million in services from blockchain analysis companies. The main sources of these funds are the IRS (U.S. Taxation Service), ICE ( U.S. Immigration and Customs Enforcement) and the FBI.
The amount of services purchased and the number of contracts signed by various federal government departments for blockchain analysis companies | Source: Diar
To a certain extent, this may reflect that the crackdown on cryptocurrency illegal and criminal activities is a higher priority within the US government. The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury also recently hinted that the regulation of the cryptocurrency industry will be at the forefront, or it will take active measures to purify the industry.
U.S. government agencies’ purchases of services from blockchain analysis companies have increased year by year, which to some extent confirms the positive correlation between industry development and government law enforcement needs | Source: Diar, Carbon Chain Value
Judging from the financing situation of blockchain analysis companies, with the in-depth development of the industry and the accompanying increase in potential illegal and criminal activities, the financing amount of major blockchain analysis companies has shown an increase year by year. According to incomplete statistics, since 2019 alone, major blockchain analysis companies have received US$66.4 million in funding. Among them, Chainalysis, a well-known blockchain analysis company, has completed two rounds of financing this year and has received a total of US$36 million, accounting for the largest share of financing so far this year. Half of the amount. It should be pointed out that one of the financings was completed in the form of an acquisition, that is, Coinbase completed the acquisition of Neutrino in February this year at a price of US$13.5 million.
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It is worth noting that among the major blockchain analysis companies, Chainalysis is one of the most conspicuous companies. It not only stands out from the crowd with a total financing amount of more than 50 million US dollars (data publicly disclosed so far), but also has the closest relationship with the US government. (The Diar report cited above stated that of the US government agencies’ US$5.7 million investment in related companies, as much as US$5.3 million of funds flowed to Chainalysis, including a US$1.6 million investment completed by the IRS orders).
According to a Reuters report on April 24, Chainalysis’s real-time transaction monitoring tools have covered ten currencies: BTC, ETH, BCH, LTC, TUSD, GUSD, USDT, USDC, PAX and BNB, which means that companies, governments And law enforcement agencies can use relevant tools to track the flow of these 10 cryptocurrencies and track suspected illegal transactions.
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How to reduce ban risk
1. The government is likely to issue a ban on exchange operators, which is exactly what the Chinese government has done while banning ICOs. However, the system and mechanism of the United States make the government face more legal challenges to directly implement similar actions, which requires that the realization of the relevant ban in the United States must be a logical process. We’ve seen Bitfinex’s parent company, iFinex, a Tether stablecoin affiliate, enter a legal battle with the New York Attorney General’s Office (NYAG), which means other U.S.-based exchanges, due to huge revenues and wealthy VCs have a lot of money in their hands (for example, Coinbase raised $300 million in its E round in the fourth quarter of 2018), and they may have more confidence and ability to take up legal weapons to protect themselves in the face of the government’s decision to shut down their businesses . Furthermore, if the government really takes action against the exchange, users and funds in the encrypted world will quickly pour into DEX. Zhao Changpeng, the founder of Binance, clearly expressed the same point of view in a recent interview with the media.
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The DEX trading volume on Ethereum was $86 million in January, and suddenly increased to $300 million+ in June | Source: D5—The Science DAO
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Market share of permissionless vs permissioned DEXs | Source: D5—The Science DAO
2. As mentioned above, earlier this year, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) banned two Bitcoin addresses (149w62rY42aZBox8fGcmqNsXUzSStKeq8C and 1AjZPMsnmpdK2Rv9KQNfMurTXinscVro9V, the last transactions of these two addresses were both on March 2019 On March 13, the balances were 0.00024812 BTC and 0.00098789 BTC respectively), that is, American citizens are not allowed to transfer money to these two addresses. To some extent, this means that Bitcoin is not illegal, and the US government can sanction Bitcoin holders by blacklisting.
This kind of sanctions is certainly worthy of vigilance in the encryption community-Bitcoin may not be a free currency forever, but in terms of its actual effect, it may be very limited at present.
“Basically, the U.S. Treasury Department googled me and my bitcoin address, and I won’t make that mistake again.”
To take a step back, even if the U.S. government prosecutes violating Americans or foreigners living in the United States. The likelihood of conviction also remains to be seen, as there is no legal precedent on the subject—just as Americans are not obliged to verify the identities of previous and subsequent users of federal reserve notes.
3. In terms of imposing tariffs, due to the promotion of Sino-US trade and hundreds of billions of dollars of goods have been involved, it is feasible to impose heavy taxes on mining-related equipment. But this also faces some problems: it can only reduce the increment of computing power, but it has little effect on the existing computing power stock—which further makes the fourth bad situation (that is, the United States muster enough computing power to launch 51 % attack) is difficult to achieve, because no matter in terms of ASICs manufacturing capacity, chip production, related equipment, and supply chain, the United States does not have enough cards. This industry is also dominated by Taiwan, Hong Kong//Shenzhen, Japan, South Korea, etc. It is closely related to the represented East Asian countries and regions.
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In terms of crypto mining, Chinese merchants have an overwhelming advantage | Source: btc.com
4. The fourth attack scenario above is the most consequential (in terms of its risk to Bitcoin and other public blockchains), but also the least likely. Many early cypherpunks in the cryptocurrency community are still worried about the CIA/FBI infiltrating the developer community, secretly collecting hash power, and eventually Bitcoin. Some even believe that Satoshi Nakamoto has been arrested and is now in the hands of the government. There are several problems with this kind of thinking:
The actual impact of a 51% attack is amplified in the mainstream media narrative - while some double spends are possible, generally speaking ones funds are safe and Bitcoin or the blockchain blockchain network Both can be rolled back and forked to restore the state of the network before a notable attack.
Things like this obviously have a very negative impact on the price of Bitcoin. From the perspective of user sentiment, this is a complete war, and the time node for Bitcoin to be pushed to the general public will be delayed by at least 5-10 days. Year.
However, this requires the U.S. government to accumulate a large number of ASICs, and we can see from government documents that the U.S. government is still looking for outsourcers who can help it operate full nodes to assist government departments in blockchain-based analysis.
The latest example of the U.S. government’s attempt to get directly involved in cryptocurrencies is that the SEC hired outsourcers to operate nodes for Bitcoin, Ethereum, and Ripple to bypass third parties to collect and analyze data directly from within each blockchain. For the time being, it is only for the recruitment stage, and has not yet had an actual impact.
If Satoshi Nakamoto is really arrested by the U.S. government, Trump’s series of remarks on Libra on Twitter and U.S. Treasury Secretary Mnuchin’s views on cryptocurrencies in a press conference will be quite different.
This may be the same as we do not yet have clear evidence of the existence of aliens. If the idea that Satoshi Nakamoto is controlled by the US government is true, the president may have difficulty keeping his mouth shut on Twitter, and the White House cannot guarantee Some of its internal staff feed the media in Washington.
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Raising acceptance: Think tanks and lobbyists flock to Washington
To achieve a lighter regulatory environment, such as the Telecommunications Act of 1996, which was relatively friendly to the early Internet, the global cryptocurrency community needs to do a better job of convincing lawmakers to push them to change. The best way to achieve this is to drive consumers attention to cryptocurrency, increase its acceptance rate, conduct extensive user education, and reverse the S-curve of technology acceptance rate as soon as possible.
