Monero has some seriously nasty attacks. Some are countered by churning:
Small anonymity set for Exchange>Wallet>Wallet>Exchange. Especially if the value (minus fees) is passed through fully.
Some are enhanced by churning:
Correlation of transaction activity and activity on your internet connection (More churning more events).
Sweeping multiple owned (and therefore likely closely related) outputs together makes them visible as likely true inputs.
I think you can weaken the negative effects of churning with certain measures, though. But then how much churning is needed? There is no conclusive research. Six sounds like a nice number. It makes for a theoretical 16,777,216 origins.
tl;dr: Don’t depend on Monero alone if you want to blow up the White House. It only obfuscates without more stringent guarantees. (The same is also true for Tor)
Here is a somewhat authoritative write-up I found.
I think you mix up a few concepts. What makes bitcoin decentralized is not the single chain but how you validate the protocol (decentralized network of nodes) and audit the ledger (decentralized network of miners).
Another way to see it is once data is written on the chain, it is immutable. This means that no centralized authority can decide to rewrite the chain unilaterally. So no central authority can change the protocol, change the ledger, or prevent you from using it.
One excellent example that comes to mind from history is the phenomenon of Civil War tokens. These tokens were a revolutionary new technology at the time during the 1860s, which were privately minted and distributed throughout the United States of America. It could be argued that these tokens were some of the world’s first widespread ‘crypto’ currencies, as they were used in place of government-issued money in America but were not backed by anything.
It is estimated that from 1861 to 1864, there “25,000,000 Civil War tokens, (nearly all redeemable for one cent).” Today, the tokens are collectors items, which vary in value based on their type and scarcity
I’m a millennial, I cannot be bothered with anything that happened before the 80ies (Stranger Things)
Seriously though, i fear bitcoin’s collectible career’s going to be less successful than magic cards or tamagotchis. Holding btc is just not as fun, no haptic experience, even cold hard goldvreneli feel better (not to mention the beautiful glimmer )
Admittedly, I did hate it it at first, but in the end it’s a lovely series about friendship. And of course, it’s just a fantasy, there’s nothing too romantic about the 80ies (except for the gorgeous love songs )
Article in relation with the bankruptcy of Celsius. About terms & conditions and the rank of recovery in case of bankruptcy
Celsius spells out in its terms and conditions that any digital asset transferred to the platform constitutes a loan from the user to Celsius. Because there was no collateral put up by Celsius, customer funds were essentially just unsecured loans to the platform.
I‘m sure you‘ll remain unfazed by the hundreds of millions of dollars stolen from cryptocurrency schemes and tout the next „innovation too keep an eye one“ that’ll supposedly solve the problems with safekeeping in due course.
You are really trying your best to mix up everything. And it is actually all about the coin you are using.
Fedimints is about custody, exactly what you need to avoid yesterday’s hack on Solana. It is not using another coin, it is using bitcoin. Same for Lightning, you are still using bitcoin and you actually don’t even need lightning for payment, layer 1 works just fine.
As for the money I am lending or borrowing, it is peer to peer with…Bitcoin in collateral, no third party risk with other shitcoins such as cel or Luna or whatever…
Good luck trying to spin it again and again, a better investment of time would be to read the article I posted so we can discuss something interesting.
That‘s what I‘ve been saying all along: Custody and safekeeping is a problem.
But you‘ll never cease to come up with new technical solutions to that issue.
And they don‘t inspire great confidence. Your own linked article spells it out:
„If the idea takes off, there may be a mix of larger, more well-capitalized Fedimints that offer cheaper fees and certain advanced features, and smaller community Fedimints that are truer to the tribe-guardian model.
…
Fedimint critics are quick to point out that the compromise on self-custody is the main tradeoff and biggest risk of all, and that these new platforms could be used for a dizzying array of “rug-pulls,” where mint operators collude to steal funds ** from unsuspecting users.“
And that‘s the thing: Complexity and power in the hands of few operators.
This is the reality: You can‘t trust platform operators - not even the well-intentioned from messing up and allowing hackers and other malicious actor to steal Coins.
It’s not so much the Bitcoin protocol and blockchain itself - it’s rather the custodial and exchange solutions laid on top of it that are abused to steal millions, dozens, hundreds of millions of dollars.
And it‘s happening again and again.
That‘s what undermines public confidence in cryptocurrencies.
Still works over reputation, like drugs (another physical good). You could also split that into multiple exchanges. Parallel with different vendors or sequential with known honest counterparties.
You have to provide a phone number. Organising burner SIM and burner Phone and brushing up on opsec shouldn’t be insurmountable challenges for added convenience and security.
A swiss number is needed though. By law you need to provide your name and address to have a swiss SIM card. Preventing circumvention has proven difficult as you can imagine.
To me the goal of Fedimints is to use it at a trusted level e.g. Family members. So typically most of your family won’t have the technical knowledge for self-custody but a couple of people can take care of it for everyone - - > net positive.
If you use the biggest Fedimint managed by people you don’t know, then you have the exact same trade-off of the usual third-party custody like exchange
I think the problem is that anonymous value already is in the gray zone. On it’s own it is not illegal yet, but nearly everything around it is. What is there left apart from secretly saving income under your mattress? Even then nobody can take that money legally anymore. You can only spend it on small-time consumption. That’s where you secretly withheld it from anyways.
Edit: On a second though you have to declare it for taxes. So a big part of that anonymity is already lost.
If we argue the case of politically persecuted and other criminals. Then we aren’t particularily afraid of breaking the law and also ready to inconvenience ourselves a bit. Especially if that lowers the chance of getting caught and adds nothing significant to the punishment.
Dissidents in particular might also be able to receive donations. Cryptocurrency is highly mobile and enables you to pay for quite some services already. E.g. someone from the other side of the world donates over your website. You use it to pay for hosting space. No compromise of anonymity needed on your side. You might also be able to convert it back to cash through (probably) criminal services. And it is easy to take with you, if you have to flee.
So yes, especially in those cases it has certain benefits over cash (including anonymity). I don’t know about the dissidents, but online drug marketplaces have become a viable economic sector. It functions exclusively over cryptocurrency. The anonymity and convenience seem good enough. Even though the pressure from police agencies all over the world must be severe.
I believe my bitcoin understanding is quite good, even I have not invested in it.
It has some really unique and revolutionary monetary features.
But sth that has really freaked me out, and it is the reason I did not invest in it years ago is why the goverments / central banks are allowing bitcoin to become a real threaten to the establishment.
a) or they are already owing whale wallets.
b) or they are sure they can execute a law that forbidds holding bitcoin, as Roosevelt did in 1933 in USA for gold.
c) or they might be using the crypto burble just as a lab to push the technology enough to build their CBDC. I believe CBDC is a sweet dream for goverments / central banks. They could track any transaction and confiscate any wallet.
For last 10 year a lot of resources and talented people have been working in the crypto wave. Goverment would not have had enough resources to achieve such a progress in so short time by themself. This is the reason why I am some how eventually bearish in bitcoin. So personally I believe we are living the scenario (c) and in a few year (b).
do u have in mind any other reason why the establishment is allowing all this?
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It’s not so much the Bitcoin protocol and blockchain itself - it’s rather the custodial and exchange solutions laid on top of it that are abused to steal millions, dozens, hundreds of millions of dollars.