Anons as usual need to use their wrinkled brains to process news such as this!
Firstly, note that the authority in this bill is against "financial institutions", including crypto exchanges.
Secondly, note that crypto exchanges are the very antithesis to the concept of crypto. Lets take a moment to explore why.
Ownership
Crypto allows everyone to own their own assets with no intermediary. You do not need permission from anyone to access your assets, all you need is the private key.
When you have an account on a crypto exchange such as coinbase, you do not own your crypto. The crypto is stored in a wallet (custodial wallet) whose private keys are held by the exchange. If that exchange were to shutdown tomorrow, you would lose all your holdings. This happens periodically when they claim they got hacked and lost hundreds of millions of crypto.
Privacy
One of the allure of crypto is that you can make sure your transactions are private. Everyone can see the transactions on the blockchain, but it's very hard for someone to know it's yours. If a bank, for example, wants to ban someone they cant just shut off your ability to transact in crypto
However with a crypto exchange and the KYC rules (know your customer), they know exactly who each person is and with a little algorithm they can get a good idea of who is doing what. They can freeze your account or stop your transactions. They can tell the feds how much money you are spending and to which wallets its flowing.
Manipulation
Cryptos are predicated on the notion that it is distributed and not easily manipulable by a central authority. This is technically not true. Bitcoin, for instance, can be manipulated if someone takes control of 51% of the computing power, or someone has access to quantum computers that can break the encryption algorithms. Thats a different issue.
Exchanges bring in a whole new level of manipulation. Since people deposit their crypto with the exchange, they dont even need to make sure that crypto really exists. Only when you withdraw it do they have to send you real crypto. This is a lot like Goldman Sachs creating fake share certificates for shorting OR Fed printing free money. This is the kind of control banks really love.
So what do I think is happening here? 5D chess as usual.
The [DS] is thinking that they can use this bill to shutdown all exchanges who dont play ball with them, and finally bring all crypto exchanges under their trusted Banks, so that they can control crypto exactly the same way they control the current monetary system.
However the Whitehats can use this to shutdown all financial institutes, and move to a truly de-fi platform where everything is distributed, and there are no exchanges. Everyone can use the crypto thats picked as the "people's currency" with no one ever being able to control them.
Anons as usual need to use their wrinkled brains to process news such as this!
Firstly, note that the authority in this bill is against "financial institutions", including crypto exchanges.
Secondly, note that crypto exchanges are the very antithesis to the concept of crypto. Lets take a moment to explore why.
Ownership
Crypto allows everyone to own their own assets with no intermediary. You do not need permission from anyone to access your assets, all you need is the private key.
When you have an account on a crypto exchange such as coinbase, you do not own your crypto. The crypto is stored in a wallet (custodial wallet) whose private keys are held by the exchange. If that exchange were to shutdown tomorrow, you would lose all your holdings. This happens periodically when they claim they got hacked and lost hundreds of millions of crypto.
Privacy
One of the allure of crypto is that you can make sure your transactions are private. Everyone can see the transactions on the blockchain, but it's very hard for someone to know it's yours. If a bank, for example, wants to ban someone they cant just shut off your ability to transact in crypto
However with a crypto exchange and the KYC rules (know your customer), they know exactly who each person is and with a little algorithm they can get a good idea of who is doing what. They can freeze your account or stop your transactions. They can tell the feds how much money you are spending and to which wallets its flowing.
Manipulation
Cryptos are predicated on the notion that it is distributed and not easily manipulable by a central authority. This is technically not true. Bitcoin, for instance, can be manipulated if someone takes control of 51% of the computing power, or someone has access to quantum computers that can break the encryption algorithms. Thats a different issue.
Exchanges bring in a whole new level of manipulation. Since people deposit their crypto with the exchange, they dont even need to make sure that crypto really exists. Only when you withdraw it do they have to send you real crypto. This is a lot like Goldman Sachs creating fake share certificates for shorting OR Fed printing free money. This is the kind of control banks really love.
So what do I think is happening here? 5D chess as usual.
The [DS] is thinking that they can use this bill to shutdown all exchanges who dont play ball with them, and finally bring all crypto exchanges under their trusted Banks, so that they can control crypto exactly the same way they control the current monetary system.
However the Whitehats can use this to shutdown all financial institutes, and move to a truly de-fi platform where everything is distributed, and there are no exchanges. Everyone can use the crypto thats picked as the "people's currency" with no one ever being able to control them.
Thanks, it's hard sometimes.