All Venezuela has to do is to make it illegal for anyone to sell you Bitcoin.
Effectively, the current situation is rather close to that: the financial system is predicated on Know Your Customer and Anti-Money Laundering regulations that make moving large amounts of money for anonymous purposes dangerous for financial institutions. Given that cryptocurrency has struggled to provide any rationale for its existence other than the anonymous money flows that government regulation is trying to root out, dealing with it as a financial institution raises regulatory compliance red flags. As the article demonstrates, this means that your only real option is to rely on criminals and hope that money moves through the system fast enough that the government doesn't notice and the criminals handling your wealth don't skim too much off.
I'm pointing out that anonymous money flows are already effectively illegal, given the KYC/AML laws. At some point, any Funny Money system you create has to interact with the fiat system so that people can actually do stuff like pay their utility bills, and if Funny Money is triggering compliance alarm bells, and at that point, well, read the article.
Something else to point out is that just because a system is unsustainable doesn't mean it will collapse immediately.
Oh alright. I don't see how this invalidates the use cases? The businesses that have payment processor problems aren't illegal, and can easily prove their revenue.
And I do agree that unsustainable systems don't collapse immediately. I've been waiting for Tether to collapse for years. But I don't think cryptocurrencies as a whole are unsustainable (the larger proper exchanges that don't use Tether as their "fiat option" should survive).
Anonymous money flows aren't illegal. There are those that would like to make them illegal, but all they've managed to institute so far is KYC/AML laws relating to third party payment processors. These laws don't apply to cash or its electronic corollary, cryptocurrency.
Until a law is created that makes unmonitored use of physical and electronic cash illegal, anonymous money flows aren't across-the-board illegal.
One obstacle elitists have in instituting such laws is that enforcement would be costly, involving heavy-handed treatment of large numbers of end-users. Trusted third parties like banks are comparatively easy targets, being much less politically costly to repress.
> And all the U.S. had to do is make drugs illegal, and it would disappear. (Or not.)
Well, yeah. Making drugs illegal makes them disappear. From legal sources. The illegal sources share a similar set of problems as noted. Am I going to get what I paid for? Will I get all of what I paid for? Will there be repercussions? How safe is this?
The drug market being illegal means that for the vast majority of people it's only worth using for fairly inconsequential things. Recreational drugs for the weekend or the equivalent. You might not want to source your cancer drugs there for the same reasons you might not want to source your car or house loan from some random internet entity. Trust. And dealing in an illegal market makes the higher levels of trust very hard, if not impossible, to achieve.
I think the point is that cryptocurrencies will be relegated to second class currencies for as long as they can't or aren't treated with the same trust a fiat currency is.
> > And all the U.S. had to do is make drugs illegal, and it would disappear. (Or not.)
> Well, yeah. Making drugs illegal makes them disappear. From legal sources. The illegal sources share a similar set of problems as noted. Am I going to get what I paid for? Will I get all of what I paid for? Will there be repercussions? How safe is this?
It has been fascinating to me to see how important brand and reputation are in the underground, otherwise struggling-to-be-anynomous markets. But then, even in the chans there were tripcodes.
Effectively, the current situation is rather close to that: the financial system is predicated on Know Your Customer and Anti-Money Laundering regulations that make moving large amounts of money for anonymous purposes dangerous for financial institutions. Given that cryptocurrency has struggled to provide any rationale for its existence other than the anonymous money flows that government regulation is trying to root out, dealing with it as a financial institution raises regulatory compliance red flags. As the article demonstrates, this means that your only real option is to rely on criminals and hope that money moves through the system fast enough that the government doesn't notice and the criminals handling your wealth don't skim too much off.