Yesterday the CEO of Coinbase, Brian Armstrong, put out a tweet thread about rumors of US Treasury regulations coming down the pipe. Armstrong said the US Government could require financial institutions to verify and track the recipient/owner of any unhosted wallet transaction.
This is my (totally underqualified, but entertaining) take.
Crypto Twitter Anonymous (CTA) demonstrates the value of privacy
Crypto-twitter has been a wonderful place to learn about blockchain, in part by real people with incredible knowledge and experience, but also from accounts with funny names and silly profile pictures. The advantage of the latter “anons” is they can get their real opinions out there without being chastised by their tribal blockchain community. As a person that is publicly trying to break into the crypto industry and has somehow fallen into the ETH twitter community in the past few months, I definitely feel that. At times I worry about retweeting or positively commenting the things I like from EOS (low fees) ADA (global change mission), WAVES (ease of minting tokens). And if I worry about those implications, imagine one of the founding members of the ETH community wanting to talk about how it’s great that Tron is helping entertainers take back their earnings from minuscule (and censoring) monetization of YouTube? They’d probably be booed off the ETH Twitter stage louder than the savage reaction to Vitalik’s rapping debut.
But also… can crypto-twitter not be so dramatic?
Armstrong tweeted that the custodial wallet being verified could “kill many of the emerging use cases for crypto.” I think it’s fair to say it could limit the growth of emerging use cases of crypto, but as I often tell my older brother and younger sister (both adults) caught in a screaming match with each other, that kind of hyperbolic language is not helpful. I’m sorry, but the emerging cases of DeFi, NFTs, Social Tokens, and many others will not be “killed”. In fact, those communities, as well as other many growing crypto communities, often highly encourage building, messaging, and paying in public!
That being said, Crypto is Hong Kong and Mnuchin is China
Hong Kong’s centralized payment system, known as Octopus, has been used by the Chinese to notify them of the movements of protesters through tracking their purchases(!) The Chinese government even tracked down and arrested an admin of a Telegram(!) protest chat group. Imagine if sometime in a not-so dystopian future, Janet Yellen makes everyone used a new centralized government crypto named, I don’t know, what sounds like Octopus…. SUSHI (lol), and cracks down on politically incorrect NFTs in the MEME channel. The government loves to brag about partnering with USDC to lift Venezuelans out of poverty and take down dictators, but will it not acknowledge that it was the type of totally open source technology that led to do so and in fact could lead them to free other oppressive regimes like Iran and North Korea?
Government registries have even affected my life recently. This month my fiancee and I had engagement party which my parents couldn’t come to because State government officials told them they would track my Georgia-based parents and make them stay in New Jersey (anyone’s worst nightmare) for two weeks.
Being so new to crypto and having all these realizations about real and potential government crackdowns, I feel like a random guy walking into the terrorized building and the crypto community sarcastically yelling:
Plot twist: crypto is actually all about trust
It’s funny, in the past year I’ve heard countless people say that cryptocurrency is trustless. In my view, the essence of cryptocurrency is putting ultimate trust in every decentralized unhosted wallet user. Winston Churchill once said “The best argument against democracy is a 5 minute conversation with the average voter.” Turns out Satoshi is proving Churchill wrong, giving the power to the people is be a revolutionizing technologies, lifting the masses out of poverty and creating and life-changing wealth.
Even through my (short) personal journey in pursuit of Crypto For Good, I’ve faced endless questions of how Karma Credits (The ERC-20 token community I launched to reward people doing kind things for each other) would verify a good deed has occurred before we pay them. I generally always say this: Sure, we can ask them to take a picture of them doing the nice gesture, show receipts, or provide us with their personal info, but ultimately we trust them, as Karma Credits is the currency backed by trusting humanity is good.
And we need to start trust those unhosted wallet communities will do good for the world.