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Comment by garydevenay | Hacker News Reader

> For example, if you bring up the question of whether the major centralized exchanges could all decide based on instructions from an oppressive government to freeze exchange of tokens belonging to a dissident, you’ll be told that that’s no problem in their theoretical world where a Bitcoin is a Bitcoin and if an exchange won’t accept yours, you can easily find an exchange that will.

Centralised exchanges can't freeze the exchange of Bitcoin. They themselves can decide that THEY won't accept money from certain individuals (Centralised exchanges are required to complete KYC for users), but they have no power to stop UTXOs being spent on the network. The only way UTXOs can be prohibited from being spent is via consensus between node operators.

This is just one example of many points where the author decides to fuse centralised services which interact with the decentralised network with the network itself.

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I agree the wording is a little vague, but now you're just being pedantic. Her point still stands. "Freeze exchange of tokens" doesn't have to mean "stop the Bitcoin network from operating", it could also mean simply issuing a government order to all exchanges to not accept a particular UTXO. Anybody operating an exchange who doesn't want to go to prison has to comply with the order. Governments can do that -- it's not that hard to issue an Interpol alert for a particular UTXO, legislation and enforcement just haven't caught up yet. That effectively "freezes the money", because then the person holding that UTXO cannot withdraw it anywhere. Governments already do this with paper money, which is why laundering cash is such a headache, and Bitcoin only makes it EASIER to track and prevent illegal flows of money. Paper cash is still more decentralized than Bitcoin, hence the article's main point stands: Blockchain-based systems are not what they say they are.

If bitcoin is the only crypto currency that exists then yes you are right. But there are already ways to work around such a ban (like swapping to monero). In several of the recent hacks, big exchanges did try to ban addresses but were not successful in stopping the laundering. Or at least that is my understanding right now.

If you freeze a UTXO, one can spend that UTXO inside the network by committing a transaction and the output will be a new UTXO which is different from the previous one, thereby unfreezing it.

This is the basis for mixing services which do this at scale.

The fact is that the author is using intellectually dishonest arguments to try and convey something as the truth, which is not true.

The above also doesn't take in to consideration any L2 or Taproot transactions that provide even easier ways to mitigate Government overreach.

You've selected an awful example. The one you choose wasn't an argument on anything technical concerning bitcoin, nor was it a claim on possibility of centralized exchanges blocking on chain transaction.

It is like you haven't read the preceding and the following paragraphs.

Author was simply relying his/her experience in discussing with crypto supporters. In the paragraph you quoted the response of crypto supporters is that exchanges have no power. In the following paragraph the response of crypto supporters is that exchanges have the power.

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