Countries like Russia are looking for a way to move beyond the world dollar standard because the U.S. is able to shut down international dollar transfers for particular countries and banks, and uses that capability somewhat liberally. The U.S. probably can't do that to cryptocurrency, so I'd say it does in fact solve a problem for Russia.
A lot of us vote to change things. I've also gone to protests, gotten involved in party politics, all that stuff. It's not that effective anymore. 80% of the country wants net neutrality and a couple million people took the trouble to file comments with FCC; it made no difference at all. At some point you have to stop begging and start inventing things. As Buckminster Fuller said, "To change something, build a new model that makes the existing model obsolete."
As soon as they’re converted to/from real money, they fall under the same restrictions as everything else, and most of the places you’d want want to live share restrictions on unregulated financial transactions. Similarly, while there’s egregious abuse of cash seizures it’s not like the cops haven’t heard of other stores of value. If they suspect you’re doing something serious, following the money in is what already leads to headlines about police selling large quantities of Bitcoin — and that hidden hardware wallet is going to be seen as proof that you’re hiding something.
That latter point is the key one: there are a lot of people in jail because they thought they could hide money. I would not bet on having the opsec necessary to remove money from your accounts without leaving a trace, and with Bitcoin any mistake means you’ve left an irrevocable evidence trail behind.
All of which is beside the point of the actual article, which is about Russia using crypto to get past sanctions.
But to your question, keeping $1 million in cash, all legitimately acquired, in your house, which could be seized under the flimiest of pretenses, is madness. Bank? Gold? No thanks.
It's going to happen eventually. You might as well figure out how to get used to it. In spite of how the US sometimes is, they have inevitably come down on the right side of history.
I suspect there's a difference. Old-style, the Man says to the bank, "Hey, until further notice, acdha's money isn't theirs anymore." The bank says "Yes, sir." Then you try to contest this using a lawyer on contingency or something, I don't know.
New-style, they say to you, "Hand over your private keys, you don't own them anymore." You say, "I'm calling my lawyer." Maybe the process ends in the same place, maybe it doesn't, but if possession is really whatever percentage of the law, outcomes will change on the margin accordingly.
To the extent this helps the likes of Putin, it's bad. (see https://en.wikipedia.org/wiki/Magnitsky_Act)
If it’s totally off the books, you need to flee to a few countries with lax banking laws before accessing it because you’ll have to explain either the income or non-trivial purchases (“how does a guy reporting $100k salary buy a $500k house in cash?” is the kind of thing which routinely catches small scale crooks).
Do any of that wrong, well, you probably lied to a federal agent and can face severe penalties for that alone.
I think you misunderstand the nature of freedom and rights. I don't have to explain what I did with my money. I have the presumption of innocence. You don't get to trawl through my financial records looking for a crime. You have to have probable cause that I have committed a crime, and then seek supporting evidence for it.
I think it's funny that the country with the first and second amendment is the one that has, for decades, pushed the restriction of rights in money. Americans seem to have forgotten what a right even is. With the first amendment, people aren't legally 'allowed' to say what they want. The government doesn't have the right to stop you saying what you want. With the second amendment, people aren't legally 'allowed' to have guns. The government doesn't have the right to take them away from you. For too long the surveillance state has crept in, and now there are people that believe that you have to prove your innocence. Incorrect. You have to prove I have a case to answer, and I get to protect myself from self-incrimination, and you have to prove that case beyond reasonable doubt.
That is what is so insidious about civil asset forfeiture. It is civil. Instead of proving beyond reasonable doubt that you have committed a crime, all they have to prove is the balance of probabilities. You are treated like a criminal, but it isn't you who is the criminal, it is your assets. When they don't know your assets, nor have access to your assets, because they can't just confiscate the cash out of your car, your house, or your bank, you are protecting yourself.
Law, meet bitcoin.
Do you think you have to pay taxes? If so, the government needs the authority to confirm that transactions are properly accounted for.
Of course.
> the government needs the authority to confirm that transactions are properly accounted for.
Ludicrously false. You clearly have no idea how the law works. You must think you live in a police state. In spite of what you might think, if you live in a western democracy, you don't. You fill in your little boxes on the form and you pay your taxes. You may be asked to justify the numbers in the boxes.
You seem to have a bizarre belief that something illegal or wrong is occuring. You realize you're not a slave, right? You realize you have rights, right? You know what a right is, right? You realize the law is a list of things you can't do, not a permission list of what you can do, right?
Instead of a shoebox or an off-site safe you would just use a wallet and deposit crypto into that. The crypto could be purchased using something like localmonero or anonymously deposited by a friend who you give cash to.
Crypto currencies like monero have built in privacy so it’s possible to have anonymous transactions where it’s hard for police to trace the origins:
https://www.monero.how/why-monero-vs-bitcoin
It’s also possible to obtain monero without going through a bank or showing identification (as mentioned above):
Now I’m sure some people will be caught doing stuff like this in the same way that some people get caught today avoiding paying taxes. My point is that it’s possible to do and it’s likely going to get easier to do.
The big change with crypto is that it makes it much easier to do the above and move it across borders. It will be interesting to see how governments try to restrict this.
(Yes, I did use you in the example instead -- a distracting choice, sorry.)
To bust sanctions is to go against the Washington consensus. But why did bitcoin become popular with American's in the first place?
The answer is that the Washington consensus has evolved to be just as opposed to the interest of every day American's as it is to the interests of states like Russia and Iran. Civil liberties have been eroded in the name of terrorism and pedophiles for a long time now. No amount of voting seems to fix these problems.
The founding fathers put gun rights in the constitution under the belief that the final protection of personal freedoms is the ability to defend it for yourself. Cryptography is the guns of the 21st century.
If bitcoin is being used to bust sanctions, its a problem that could have been avoided if the plutocrats in Washington hadn't prosecuted the endless drug war, engaged in civil forfeiture, used taxes to pursue unpopular bailouts, and just generally gave people a reason to want to exit their financial system.
Moving real money into Bitcoin will leave a paper trail, as does moving it out. If you don’t disclose that or surrender control when required by law, they’re not going to just give up — that’s more like jail time until you cooperate (money laundering is an obvious lever), and most other countries will go along with that. Similarly, companies which are trying to be legit aren’t going to touch tainted bitcoins since they don’t want to be pulled in as accomplices.
But its trivial to manage several separate financial persona's (wallets) and generally amortize yourself against losing/revealing everything.
>and most other countries will go along with that.
Countries within the Western sphere of influence sure. Just look at how the US got that BTC-E Russian on holiday in Greece. But consider the fact that some countries have more to gain by destroying US financial hegemony than they stand to lose by their own citizens petty crime. Russia makes bitcoin completely unregulated. So you try to contain the problem by blocking Ruble/USD exchange. Then China follows Russia's lead. Now you contain the problem by blocking RMB/USD exchange? Pretty soon you've locked so much of the world out that really all you've done is lock yourself in.
In the near future there will be so many leaks that the US and the West in general doesn't have enough fingers to plug every hole.
>aren’t going to touch tainted bitcoins
Monero
How does money enter or leave those accounts? If you started with real money, converting it into Bitcoin leaves a paper trail and it’s on you to show where it went for any non-trivial amount.
If you received Bitcoin, attempting to spend it has the same problem – if you didn’t disclose it, that alone has hefty penalties.
The other point to remember is that everything people describe looks really bad if there’s any hint to clue an investigator in. Most people are going to have some slip and this will all be used as proof of intent.
That will change with the Lighting Network.
As as been repeatedly demonstrated to you, holding cash is unsafe, because it can be seized by the government without you ever having committed a crime.
> what does adding a cryptocurrency give you?
As has been repeatedly demonstrated to you, you have protection from it being seized through the insidious civil asset forfeiture procedure.
Because it looked like a get-rich-quick scheme, and Americans like those as much as anyone else. More, in some cases, because there is a lot of cultural baggage in the US around the idea of becoming not just comfortable, but fantastically, fuck-you wealthy, from nothing, by getting in on the ground floor of some expanding industry or company.
People went crazy for canal stocks in the 1790s, railroads in the 1840s, industrials and utilities in the 1920s, Nifty Fifty in the 70s... and more recently, of course, dot-com stocks and then real estate. Lot of people out there looking for the Next Big Thing.
Most people in the market don't give a shit about Bitcoin as anything other than a vehicle for speculation.