Why Bitcoin is Not Cash - Computerphile

Bitcoin shouldn't be regulated because it works like cash. Professor Ross Anderson of University of Cambridge on why Bitcoin isn't cash.
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This video was filmed and edited by Sean Riley.
Computer Science at the University of Nottingham: bit.ly/nottscomputer
Computerphile is a sister project to Brady Haran's Numberphile. More at www.bradyharan.com

[@joshinils]

Now the video makes more sense. I think these were published in the wrong order

[@guilhermecarvalhotrindade2625]

RIP. Thanks @computerphile for creating these videos.

[@user-qs1ub5gk1h]

Man, I don’t even need to dip a PH test strip into this comments section to know that I’ll promptly go blind if I read it.

[@hoisinholdup]

Using a mixer implies intent. When one transacts in Monero, one's intention, other than to transfer value, cannot be inferred from the transaction itself. The transactor does not opt into RingCT. At best, the choice of coin could be questioned, but even this won't hold up in a future where the highest volume coins all employ various forms of compact range-proofs and aggregations. All Professor Anderson has really said is that fungibility in cryptocurrencies, like fiat, must never be optional, which is obvious.

[@willdarling1]

"Notes have serial numbers, but let's ignore that for the time being." -so can we come back to this now, or should we ignore BTC 'serial numbers' too?

[@pavelhoral]

Notes have a specific serial number which remains the same through its life and money exchange. Bitcoin is divisible, hence it can not be associated with a single serial number. UPDATE: For future readers - I have misinterpretted the point... check replies bellow :).

[@XetXetable]

But his entire point was that in order to be cash it has to be some kind of fungible asset. The reason someone might point out that most currencies have serial numbers is to point out that ordinary cash isn't fungible in the way he's describing. By pointing out that BTC serials are changeable, that turns BTC into a fungible asset, making it closer to cash than real money is by his own standard. You're defying the video's argument, not supporting it.

[@alexholker1309]

We ignore the fact that notes have serial numbers because the law, for the most part, ignores the fact that notes have serial numbers. There is no expectation that if Starbucks is offered banknote 123456789 in exchange for someone's morning coffee, that they will go to a ledger and write down that they received that particular banknote for this transaction - they'll just write down that they received $10.

[@Marci124]

To rephrase what Alex said: the recording of the serials on notes is rare, and automated almost exclusively for the first couple of exchanges, while the logging of bitcoin exchanges is not only automated, but guaranteed by design. Bank notes have to be marked in advance of a sting based on serials, and often physically tracked.

[@pavelhoral]

Yeah, I have misinterpretted the message (like 90 % commenters on this video :D). Thanks for the explanation.

[@dndboy13]

yeah i dont think Crassus is the guy whose the type to 'just give those sheep back'

[@icedragon769]

you can have your sheep back, but man it'd sure be a shame if one of them burned your house down, wouldn't it?

[@alvallac2171]

*who's (contraction of "who is," not possessive)

[@digitaldina]

YAY you guys are back posting vids! Love it! Looking forward to more security vids too :)

[@mothman.industries]

Y'all, he ain't saying crypto is bad. He's saying that pushing to have the government treat it as money is a bad idea. Anyone that's actually on board with the idea behind this stuff should 100% agree with that statement. It isn't an attack on bitcoin, take a step back, think about what's being said, and relax.

[@jacobscrackers98]

No, but he is attacking privacy.

[@marienbad2]

Wow, a video about money and fungibility that is interesting as heck and not dull and boring! Well done, this is a great video, would like to see more of this stuff please!

[@haydarinna631]

Title says "Bitcoin is not cash" which simply means cash and bitcoin are different things, it doesn't say anything negative about bitcoin. It implies that the video will be about the differences between cash and cryptocurrency. The video is expressed in a completely objective and descriptive way. There is nothing in the video that says " This is what I think of bitcoin". Yet the comments are full of people being offended and taking an offensive stance against the video.

[@luenn2042]

1: In spite of the title, the video didn't actually explain anything about bitcoin that makes it different from cash. In fact he seemed to be saying that the laws that apply to money should also apply to bitcoin; which would only be true if it was money. 2: He implied that everyone who uses cryptocurrency is a criminal. You can't be surprised that cryptocurrency users are offended by the second point.

[@haydarinna631]

He said that from a legal perspective one can make the argument that all bitcoin might have been used illegally and therefore most countries will refuse to have it declared money. He doesn't claim to explain what bitcoin is, he is just explaining why bitcoin won't be legally recognized as money (to those who already have an understanding of bitcoin).

[@ZipplyZane]

No, he very much does explain why bitcoin is not cash--because it is not fungible. Cash is fungible, by law. Even if a particular bill is stolen, it's not tainted. It would be possible to legally make Bitcoin into money, but the side effect would not be that previously tainted money becomes clean. They'd still be dirty, and any attempt to money launder would result in everything becoming tainted. This is especially a problem with other cryptocurrencies that have built-in money laundering. All it takes is one bad actor, and the entire currency is tainted.

[@snebr]

Thank you so much. Too many people here seem to think that this is an attack on bitcoin of some kind.

[@Voke]

I agree with a lot of this talk, but I don’t think the only purpose for privacy tokens such as Monero and Zcash is fraudulent. Much research has showed that the overwhelming preponderance of the transactions have nothing to do with shady behavior. (I don’t own any privacy coins, but I think there’s importance in privacy)

[@StreuB1]

VERY interesting!! The software engineers and mathematicians that work on this stuff really are amazingly intelligent.

[@nex]

The mention of ZCash reminded me of two things: (1) Unlike Bitcoin, ZCash is ASIC-resistant. (2) I have absolutely no idea how ASIC-resistace is accomplished in ZCash or other cryptocurrencies with the same property. Could you do an episode on that? I'm pretty sure I'm not the only one who would find that interesting :)

[@JaapVersteegh]

Yes. In fact I would appreciate a more technical approach in this channel, rather than addressing moral issues like is done in these videos...

[@ahealthybigmac]

ASIC "resistance" is a bit of a misnomer. There does not exist a single PoW algo that ASICs are not possible to build for (but may require an economically infeasible level of effort). Just look at Monero and Vertcoin for examples of that. As ASICs are created for a particular algo, the coin needs to be hard forked to change it to maintain ASIC resistance.

[@georgelubomirov8931]

"Equihash is a memory-oriented Proof-of-Work, which means how much mining you can do is mostly determined by how much RAM you have. We think it is unlikely that anyone will be able to build cost-effective custom hardware (ASICs) for mining in the foreseeable future… we may change the Proof-of-Work again, if we find some flaw in Equihash or if we find another Proof-of-Work algorithm which offers higher assurance."

[@ahealthybigmac]

Thank you for proving my point. "We may change the Proof-of-Work again, if we find some flaw in Equihash or if we find another Proof-of-Work algorithm which offers higher assurance". This is exactly what Monero and Vertcoin have already done.

[@obvious_humor]

In short? High memory usage. ASICs work on one principle only: any purely mathematical algorithm that can be done in software can also be done much more efficiently with dedicated hardware circuits. That's what ASIC means: an application-specific integrated circuit. CPUs are very generalized because they have to be able to do all kinds of operations. ASICs can focus on doing only the operations necessary for a given algorithm. So, how do you get around purpose-built machines that can churn out solutions much faster than any generalized implementation? Simple: you make it prohibitively expensive to build the machine in the first place. Bitcoin fell to ASICs because its algorithm was basically just generating hashes -- entirely processing-bound, and the faster you can generate new hashes, the better. ASICs therefore went all-in on computing power and only included the bare minimum of everything else, stripping out the "unnecessary" parts that would be needed to power a computer but not an ASIC. But if the algorithm instead required loading very large data sets, it would be I/O-bound and all that extra computing power would be pointless -- instead, you'd need more memory to store all that data while operating on it. Memory is more expensive than raw compute -- for compute, you can always just add more circuitry to increase the raw power. For memory, you need to add more chips or modules, which are already expensive on their own and have to be manufactured in special factories.

[@anthonysmith1228]

Bitconneeeeeeeeeeeeeeeeeeeect!

[@12345shipreck]

I really love these videos on cryptocurrency and blockchain. Keep it up.

[@rchandraonline]

Well....you might say the main purpose of notes, the value, is fungible, but I suppose you're right, since they have the serial numbers, one is not quite like another. Thanks for broadening my perspective on that, I have thought for a long time one of the best examples of fungibility was the dollars and cents in my pocket.

[@PhilippBlum]

It's an interesting question. I would like to hear the opinion about IOTA, since everything is transparent, but through the quantum proof system a bit more complicated. But there will be also local snapshots, but you could keep the whole system database, if you want to, which makes it possible to trace everything, but keeps it more or less anonym, until you connect an address to your ID or something (an Order etc.)

[@hellterminator]

Monero isn't just for money laundering. Just because I want privacy doesn't mean I'm doing something illegal.

[@JT-hi1cs]

That's a very interesting topic almost philosophical

[@athanoslee]

This is more law than computers.

[@Vlad-hb3si]

Very interesting....

[@r.pizzamonkey7379]

50th view? Man, last time I was this early, fortran was still a relevant programming language.

[@wclifton968gameplaystutorials]

it never was a relevant programming language.

[@Biliklok]

RIP

[@alexmendelsberg4974]

We still use fortran :/ slowly going to c++ though

[@TheDuckofDoom.]

Still one of the preferred langs for super computing

[@recklessroges]

Which of the top 1000 super computers use Fortran? (Note I didn't say support.)

[@bluegizmo1983]

Man, how much things have changed in just 3 years!

[@LikedgamingRS]

Saying you don't need privacy because you have nothing to hide is like saying you don't need free speech because you have nothing to say. While criminals can take advantage of a system, Monero is not used for money laundering.

[@McAndrewRants]

Liked gaming - it doesn't matter if it was. Many times more USD GDP etc is used for money laundering, crime, terrorism, war. They are grasping at straws.

[@TehDMBfan]

The law is the law, how is it grasping at straws. Long established anti money laundering rules exist for a reason

[@icedragon769]

Monero is definitionally used for money laundering. Money laundering is when you take legally obtained money and illegally obtained money and mix them together so you can't tell what's what. Under the law, all of the money that comes out of that scheme is contraband. If you're gonna demand that your coin be officially treated as a currency, you should be prepared for the rules that come with currencies.

[@PvblivsAelivs]

I think what he meant to say is that it wasn't designed for the purpose of money laundering (as was claimed in the video.) It was designed for general privacy rights useful to people who aren't breaking laws but don't want "big brother" watching them at all times.

[@nomusclesnoglasses]

icedragon769, What about a mafioso who buys a restaurant that had 1 million turnover in 2017. In 2018 the restaurant has 20 million turnover. No mixing involved, still 19 million would be not from new customers but instead from drug selling, for instance.

[@niupaidanui]

Are there references for the claim at 0:55 minutes? From what I understand bitcoins are just values in account balances. So if I had 2 BTC in my account received from 2 sources, one from each source, then when I transfer 1 BTC to another account no one can tell exactly which of the two got transferred. Or perhaps 0.5 from each got transferred. Well talking in these terms doesn’t even seem to make sense. Perhaps because bitcoins are fungible? Perhaps even more so than gold since it exists only as an account of value. While I can see how one can track the source of funds of a bitcoin account, it is not because bitcoin is not fungible but because the ledger of transactions records the flow of BTC value through the accounts.

[@worldzonegaming5202]

Love it...

[@Markd315]

Where are your citations? I’m writing a paper on open-chain fungibility and I’d like to see the papers used in the videos, not just the video.

[@luenn2042]

Having just watched that entire video twice I'm still not entirely sure what you think the difference between cryptocurrency and cash is. Is there something that can be done with bitcoin, but not cash? Or vice versa? Criminals have been quite successful laundering cash in the past, how is cryptocurrency any different?

[@ChrissCodeSupport]

Thanks for the great video - subtitles would make it even better for us not-native-english-speaking-people ;p

[@nosuchthing8]

Your wish is their command. They added subtitles

[@jonathanwarner1844]

I don't think trackable is the opposite of fungible. He gives the example of a gold bar with a serial number. Gold is still a fungible commodity (all commodities are fungible) because it is standard.

[@anthonyhegedus7948]

What I don't get is the sheer amount of computing power it takes to run the blockchain and keep mining bitcoin. That computing power obviously translates into electricity usage. Once all the bitcoins are mined, does it still need such huge resources to keep it all working? Or have I completely misunderstood how it works (probably!)?

[@YourTVUnplugged]

No you were correct. Once the block reward goes to 0 meaning all coins have been mined, then miners will only be paid the transaction fees instead of those plus the block reward. The miners have to continue mining to keep securing the network and to keep processing transactions into blocks. So by that time the transaction fees themselves will probably be enough to still make it worth their while to keep mining. It's a long way away though so I don't think we have to worry about it too much.

[@TheOneTrueMaNicXs]

The good faith thing is a bit confuising to me. If a man in Portugal buys canabis from Colorado, is he buying in good faith?

[@flymypg]

This video really should have started with a working definition of "fungible" within the monetary and commodity domains.

[@2LegHumanist]

You said yourself bitcoin is traceable. So why would anyone use it for crime over a privacy coin like monero?

[@dielfonelletab8711]

That's not really true. You can track the movement of bitcoin, but you can't really track individual bitcoins. It makes no difference whether I transfer to you some bitcoin that I stole or some bitcoin that I mined, because there is no way to tell the two apart. Your bitcoin is just a number in a ledger.

[@Toxondomo]

That Al Qaeda book in the back tho...

[@nosuchthing8]

So Virginia used to be akin to Australia

[@danielcristian1977]

Really? So, everyone using Monero is trying to launder money. Everyone using bank notes too? Core dumped.

[@Brenna_stubbs]

But that's UK law it just depends where you are in the world and you're countries Lords

[@KittyBoom360]

It's better than cash.

[@nosuchthing8]

Hey, nice crack at Virginia there

[@DaBoff99]

Ruddy interesting

[@harryman11]

No Monero and Zcash aren't meant for money laundering, they are meant for privacy. There will be an impasse at some point where it either freedom of speech and privacy, or a false sense of security provided by AML/KYC. Just because I don't want anyone to know how much crypto I actually have doesn't mean I'm laundering money.

[@mikeballspeaker]

In thinking as Has no Value Coin must be higher in circulation

[@joemiller1057]

So much for privacy or innocent until proven guilty. Of course the English would say if its private it must be used for nefarious purpose. I wish that bitcoin and the internet both had encryption and anonymity baked into the protocol layer.

[@MrBenMcLean]

This video isn't about Bitcoin. It seems to be about some alt-coins.

[@jonathanfowler2932]

Very nice. I'd love to see more on cryptocurrencies on this channel in the future.

[@angryidahobusdriver]

"it's property"

[@godoflegends01]

Hi everyone I have a degree in economics. The reasons why btc is not money are simple: Does not store value Is not a unit of account It’s not a médium of exchange. What I mean is the value of btc is express as his change rate in USD and not btc. Also define it as money would imply central banks and monetary policy would not work, it’ll change our monetary aggregates affecting our economy. Thanks!

[@YourTVUnplugged]

I can see your degree did nothing for you... All of those points are incorrect... It does store value, every participating miner on the network is literally storing your value for you on their copy of the blockchain, the public ledger... Can you or anyone go and delete all their copies of the blockchain? No you can't, so it's safely stored. It is a unit of account... It can even go up to 8 decimal places of accounting. 0.00000001 is the smallest amount that can be transferred. It is a medium of exchange, I can exchange some fraction of bitcoin for a pizza, and there we made an exchange between the two. How you could get this so wrong for having a degree in economics I do not know. It's like you didn't even think about any of what I just said, but just those particular bullet points without thinking anything of what was behind them.

[@godoflegends01]

Ignoring the ad hominem in a random YT comment, people thinking that's enough to consider it money have no idea what's money. Let's do this step by step. It stores value in the ledger: Due to it's high volatility virtual currencies are useless as a store of value even for short-time purposes, imagine a longer-term instrument. Sure it'll be in the ledger forever, but won't know if it'll keep it's value. Unit of account and medium of exchange: Do you see anything in terms of btc online? if you buy a pizza it value it's measured in dollars and then you do the change to btc, not the otherway around. plus it's has a low level of acceptance only few places accept btc. So also no. Even from the legal perspective there is no law in any country saying you are forced to accept it as payment, maybe if both individuals agree, but that's another story. Plus some other dificulties are: Stability- no ones knows if this trend will continue, maybe someday miners decide to move on, sure it's rising but nothing compared to our actual fiancial system. Supervision- leaving aside the descentralization stuff, how could you create a monetary policy to one country in a global system? like consumer protection. Liquidity- everyday transactions would need 10 min. to be validated IT dependecy- self explanatory imo So as a conclusion it's not money I am aware of the benefits like validation, transactions costs. And it can be used as a technologcial deveploment but it won't work as money, and I'm not including the problems with central bank's regulatory policy. so my degree did worked for answering youtube "informed" comments after all

[@five4threetoo1]

Can cryptos exist without fiat? If bitcoin didnt let u cash out, would u use it?

[@user-zz6fk8bc8u]

*Cryptos: yes.* Keep in mind that most amount of money in our modern world is already digital and not cash. If everybody tries to cash out money from their bank it would not work (see Greece a few years ago) - the only difference would be that there is no central entity (like a bank) that manages transactions but a distributed system. If you don't like the "rules" of a particular crypto - just use another. *Bitcoin (at the moment): No* Technical problems like transaction rate aside (because partly solved by lightning) - there are two major economical downsides to bitcoin. 1. Inital distribution - Computer enthusiasts stated mining years ago and there are still so many people on the planet that don't have bitcoins 2. Bitcoin is deflationary (limited in amount, but bitcoins can be lost - if you lose the private key) Based on point two - why would you spend bitcoin if it's very likely that they are worth more tomorrow - thus pretty useless for a currency (at the moment, because if the bitcoin community thinks that this is a problem it could be solved)

[@five4threetoo1]

That would also make cryptos centralized around miners. I did read an article online sayin that and i couldnt quite c it until now.

[@user-zz6fk8bc8u]

I'm not sure if centralized is adequate in that context. A decentralized system (like bitcoin) is decentralized because everybody can join and help / secure the system. If we look at a bank it's not possible for regular citicens to go to a bank ask for internal documents and make an audit, or just go in there and handle a few transactions. Because it's a (closed) centralized system. With bitcoin (and many other p2p, decentralized systems) you are part of a large group without trusting any of them because crypto currencies are designed in that way. If a bank desides for whatever to lock your account or in the worst case change your balance and fake the transaction history and you have no way of proving that fact (because the bank could claim that you faked account printouts if you have any) But to be fair there are problems with mining pools getting to large, but there is ongoing research to fix that (with other consensus algorithms).

[@five4threetoo1]

science i wrote 2 comments did u read the first one too? I use my phone and sometimes only c the latest comment and missed others. Miners would b the only source of new cryptos and most likely ppl will form governments around them in a crypto only society. I c that as centralized. Made not by the ppl, but the rich. Ive never had problems with banks such as what u mentioned. I have reversed a purchse with paypal only to give back the money when my item arrived late. Cant do that with bitcoin p2p. The binance hack also showed us how much control they have over their customers' money. They can always do shady things and blame it on hacks which has happened before.

[@user-zz6fk8bc8u]

_"Miners would b the only source of new cryptos"_ True. But in a well designed consensus algorithm everybody can be a "miner". (Keep in mind, that this is not true for bitcoin atm) _"Ive never had problems with banks such as what u mentioned."_ Most people don't, but ask julian assange ;-) Look at countries like turkey, china, russia, ... If your goverment is a (quasi) dictator ship the last thing you need is money controlled by them. Banks are a single point of failure and thats not how it should be.

[@theblackboyjoe]

That al qaeda book in the background. Can’t get over it.

[@PraetorDrew]

That's why Monero and other types of untraceable crypto exist.

[@PraetorDrew]

And he's not quite right about Monero. Your Monero isn't laundered with each transaction. The Monero token simply does not have a traceable history. Which means that there is no way to label a particular Monero token as stolen unless you just assume that Monero tokens are guilty until proven innocent.

[@blendtecbrah5761]

Why is The Undertaker telling me about fake internet money?

[@lukeamos8280]

What about atomic swaps and decentralised exchanges, these cannot be regulated, so its either all cryptocurrencies are illegal or not

[@parteuy3434]

Nobody cares, legal is just "ENFORCED BY THE STATE(tm) "

[@rockets4kids]

This should be in Legalphile, not Computerphile.

[@nosuchthing8]

Wait, horse thieves were sent to Virginia in the US??? I object to that Wilbur. I used to live in Virginia.

[@jam99]

...and what about GDPR and bitcoin? The blockchain contains personal data, yes? It carries its own ledger with it. What happens when a customer asks for all their personal data to be deleted when a company has just taken a payment in bitcoin?

[@user-zz6fk8bc8u]

there is no "customer" data inside the blockchain. There are only addresses and transactions in the blockchain. If you ask a company to delete your data they delete your correlation (customer-id, name, ...) with that address.

[@jam99]

So none of the data can be used to identify a person i.e. there is no 'personal data'? Personal data means data which relate to a living individual who can be identified from those data. Here is an example from ICO: 'An organisation holds data on microfiche. The microfiche records do not identify individuals by name, but bear unique reference numbers which can be matched to a card index system to identify the individuals concerned. The information held on the microfiche records is personal data.'

[@user-zz6fk8bc8u]

_"So none of the data can be used to identify a person i.e. there is no 'personal data'? Personal data means data which relate to a living individual who can be identified from those data."_ The bitcoin blockchain does not contain any data that could identify a person (or other entity that uses bitcoin). You "open an account" by creating a private-public key-pair. No other parties involved and the keypair is basicly just two very big random looking numbers (with some special properties). The public key is you account number and the private key is used to sign transactions for that account. Until now nobody knows that this account exists, because account creations are not written to the blockchain. Now you need bitcoins - to make things simple for that example - lets pretend you buy them from a stranger with cash. This transaction is written to the blockchain. What basicly happened is, that this stranger signed a transaction with his private key and told everyone in the network. Now everyone in the network (blockchain) knows that you own X number of bitcoins. No names, No (e)mail addresses just bitcoin addresses. In the real world it's getting a bit more complicated with the "get bitcoins" stuff - if you use an exchange to buy bitcoins you may have to register there with your real name and maybe send a copy of your id. They could (and many do) keep a log of who changed fiat money to bitcoin and to what address it was sent. You can create as many addresses as you like - and you should create many of them (is mostly handled by your wallet automatically) - in the best case a new address for every in-transaction. Back to your question: _"So none of the data can be used to identify a person i.e. there is no 'personal data'?"_ Not through the bitcoin system itself - but on many "contact-points" to the real world (sell bitcoins, buy bitcoins, receive money, buying a cup of coffee) it's (at least in theory) possible that information is stored that could identify you - for example if you buy a cup of coffee they know for sure that the address the money was coming from was yours (and if you used your bonus card that may even be stored in the system) Keep in mind that there are other crypto currencies that work a little different and solve that problem (that all transactions can be seen by everybody) and lightning network (that works ontop of bitcoin) also allows better privacy.

[@jam99]

Thank you for your detailed reply. To clarify, are you saying that if you perform a bitcoin transaction with someone you cannot then use any of the details given to you during the transaction (e.g. 'address' that you refer to above) to examine the blockchain and see if any other transactions for that person exists? You say above that everyone in the blockchain knows that you own X number of bitcoins. Is the 'you' an address or identifiable key (personal data) that is stored in the blockchain? I am naive about bitcoin but I noticed the other video about tracing stolen bitcoins. If tracing is possible then surely personal data is stored. If public keys are account identifiers that do not change for each transaction then they are personal data. Sorry if I have it all wrong but I cannot see how it can be any other way. If a bitcoin address for someone's account stays the same over time and activity of that account is stored in the blockchain then that is personal data (as defined by GDPR) just as much as if someone's email address was used instead.

[@dillinjames]

This isn't a flaw of bitcoin it's a flaw of government

[@parteuy3434]

Bitcoin has better coding behind it than Governments. Just wait until democracy gets a 51% attack!

[@PaulBrunt]

But if regulators say no to zcash and monero they also need to say no to bitcoin since you don't "need" a regulated exchange or any exchange at all to trade between zcash, monero and bitcoin so all bitcoin and just about all other crypto currencies could also be tainted. Then you have to say all cash is also tainted for the same reasons as it can also be traded p2p with bitcoin so the regulators should also tell banks to stop excepting it? That's an insane argument and fundamentally makes no scenes.

[@2Cerealbox]

This guy doesn't quite understand what fungible is. Money is fungible, whether or not they have serial numbers. The presence of markings to uniquely ID a specific thing doesn't make it fungible or not fungible: they key is whether they are interchangeable. When currency becomes *not* fungible is when a bill becomes worn and people prefer new bills over old bills. Fungibility breaks down when you prefer one version over another. It has nothing to do with the ability to track a bill.

[@drdca8263]

Ryan N children aren't fungible

[@ecavero1]

Ryan N I agree. If you could track it AND people decide that bad coins should be worth less, then it's not fungible anymore.

[@pajaseviwow]

This video was fairly decent, better than other cryptocurrency videos from Computerphile. If anyone wants to hear about cryptocurrencies from an expert, but it's actually true and simply explained at the same time, follow Andreas Antonopoulos.

[@digioi]

So let me get this straight, So if you bought a sandwich with btc and then you sold this sandwich for hashish, the btc is "white" money or is it "black" money because it was essentially bought for btc?

[@mothman.industries]

The sandwich is black. I don't know how you managed to trade that up for hashish. The thing should have been thrown out six weeks ago when it first started growing.

[@datas_cat]

4:10 could turn the 1 black bitcoin and 9 white bitcoins into 10 grey bitcoins? "Okay, one is tainted... but what if all the coins were to be tainted?"

[@JordanHesse]

This is good for Bitcoin

[@maxpayne438]

What's up with Virginia?

[@noanyobiseniss7462]

Your logic that a tainted gold bar would blacken the entire mine is false as banks that launder fiat do not subsequently taint all other fiat that rolls through it. That is why Monero will never be outlawed and is the only true cryptocurrency.

[@cruizh]

So the problem with bitcoin is that it isn't fungible and therefore there are always tainted bitcoins, but you call fungible cryptocurrencies "cryptocurrencies which provide built-in laundries", so every cryptocurrency user is a criminal. One could say cash provides a built-in laundry since you can't distinguish clean coins from tainted ones.

[@leandrogulrt]

The cattle will never see beyond the playpen.

[@Anthony0fFire]

Money laundering happens a lot more with USD. Saying that Monero is "designed to launder" is incorrect, as this is not it's intended purpose. Saying that "by design, it is easy to launder" would be correct. You make it sound evil, when all it wants to achieve is privacy. Privacy is NOT a crime. Privacy is NOT evil.

[@connorhorman]

Close to but not first #NotificationBellSquad

[@nomusclesnoglasses]

Imagine I buy old jewelry and use chemistry to create pure gold powder and then I give 1kg of gold powder to the bent goldsmith. He turns my powder into a bar with 1kg. The goldsmith also sometimes re-casts stolen gold bars. Does my 1kg of gold belong to the victims of the thief? Also, are bitcoins something that have a, hm, unique color? If a blue one is created, it'd be the only blue one. If you turn it into a piece it would be a blue piece. If someone got a blue piece you would know that it's a piece from exactly that unique blue coin. Or is bitcoin more like accounts in a bank? If a (part of a) bitcoin is transferred from one account to another, is one value decreased and another increased? If it's like this then you can't trace the bitcoins.

[@musikSkool]

I'm not adding to the conversation. I just came to say the word "inflation".

[@user-zz6fk8bc8u]

From an economical standpoint inflation is often wanted and does make sense most of the time. If there is inflation people don't stockpile money but spend it - so a slight inflation rate seems to be healthy for the economy (not to much because people would just stop using money and trade/stockpile goods). But in case of bitcoin the system is "deflationary" and thats one of the biggest economic problems of bitcoins. In the long run bitcoin is designed to have a constant amount (in a perfect world) - but people lose private keys (wiped the hard drive without having a backup, etc.) - that said there will be less and less bitcoins (if the system isn't changed) and the value (given that the number of users doesnt shrink) will always rise. It logically follows that most people won't spend bitcoins because it's very likely that they are more worth tomorrow (keep in mind that I don't mean currently unstable bitcoin prices - thats because the userbase is very small and tiny events can have huge effects)

[@AndrejCibik]

It is closer to cash than to diginal fiat money. But it is a chymera, a freakin monster, thats why everyone who tries to clasify it fails.

[@altaccout]

Isn't 'diginal fiat money' just credit?

[@jmiquelmb]

It’s not closer to cash because it’s not universally accepted. Cash must be universally acccepted

[@AndrejCibik]

Thats just your personal definition morgana. There is no such requirement. Is your cash accepted around the world? Everywhere? Even if its USD, its not.

[@jmiquelmb]

AndrejCibikDesign No this is literally one of the conditions taught to every economics freshman. Universally accepted means it's accepted everywhere inside an economy (i.e. the US, the UK, the Eurozone). Bitcoin is not universally accepted anywhere

[@AndrejCibik]

No, its not closer to digital money because you can hold it and there is no way to double spend it or revert transactions. If you send it to someone, there is no way to take it back once its confirmed. Digital money is held by banks and governments and you only hold a promise of money. Digital money is also not generally accepted inside the economy. I cant accept credit cards, you cannot, almost no individual can. Its easier to accept bitcoin than credit cards :D

[@DerMilt0n]

Monero was not designed for Money Laundering. It is there for financial privacy.

[@EXIT_FAILURE]

Brace for downvotes!

[@Snagabott]

Whenever an investment starts being treated like a holy object and its detractors get treated like heretics who is attacking a belief system, then that is exactly how you should treat it: as every bit as much a scam as islam or christianity. In other words: go short.

[@infinit888]

You should go visit some bitcoin message boards. It is almost like a cult. Any problems with bitcoin is simply shouted down, ignored or there is a magic bullet for it in the near future.

[@gcm4312]

Snagabott just food for thought... maybe it's not just an investment? Maybe it is a very unique piece of technology that has a potential to reshape society. Maybe your assessment is shallow. Just a thought.

[@codekillerz5392]

Downvotes have no power here

[@codekillerz5392]

What?

[@Royorg-qf5jq]

Hahaha ha El Salvador Goverment already adopted bitcoin as legal tender!!!

[@tonipejic2645]

Zcash and monero are not specifically designed for money laundering. They are designed to be private , stop trying to bad mouth crypto currencies.

[@Castle3179]

Monero!

[@mikeballspeaker]

Actually People Should not Chase BiTBoin but qte BitCoin follow/chase People

[@genericgamedev1304]

bitcoin fanboys are crazy. Nothing he said was unreasonable.

[@MrCheeseDragon]

Bitcoin is such an amazing technology. The cryptography, maths and computer science behind it are amazing. its such a shame that whenever people think of the word "bitcoin", all they think of are these shady investors and scam artists who are squeezing every bit of value it has for themselves.

[@hasch5756]

*_P U M P ' N ' D U M P_*

[@hellterminator]

If you like the math behind bitcoin, read the Monero whitepaper. It's 10 times more elegant.

[@hanniffydinn6019]

It's block chain that's elegant, not Bitcoin.

[@stxtch876]

You are right about Ripple, but "Tron" and "legitimate" don't belong in the same sentence.

[@aceyage]

"Block(no blank)chain" without cryptocurrency doesn't make sense, Hanniffy.

[@mattlm64]

But bitcoins are merged, so in money laundering all of the outputted bitcoin will be tainted with the "black" bitcoins.

[@TheDemethar]

5 min story short: If British Law one day deems bitcoin as cash, so it shall be. Otherwise no.

[@totaltotalmonkey]

This channel is now Jurisprudencephile - not very catchy. I wonder if the defence of 'respecting anonymity of transaction' would win over 'purposely enabling illegal transactions'.

[@positivemelon7578]

But the real question: is Bitcoin Cash cash?

[@nilp0inter2]

I'd like you to elaborate on 1)how can be that every single bitcoin can be traced if it can be split into smaller quantities and 2)how you sake a bag of bitcoins very very hard.

[@nilp0inter2]

Tasty Mixes of course, I am just asking for a more technical explanation using the same literary device.

[@Charij_]

I think what the video is saying is that due to: - the laws around money - bitcoin being indistinguishable from each other - all trade history of bitcoin transactions being publically available A "Black" wallet can be identified as a wallet used for one or more illegal transactions; then all bitcoin that travel from that wallet are deemed "corrupted" by law, and so cause the recipient wallets to be deemed "Black" also. Consequently if enough transactions occur then legally all Bitcoin could be marked as "corrupted" and all wallets as "Black".

[@TheMan83554]

It not so much that every one bitcoin unit can be tracked, but that there is a list of every transaction ever made with bitcoin, giving every wallet ID and how much changed hands. That tracking is baked into how BTC works. This ledger is shared with every BTC wallet, when you make a new wallet the first thing it does is download 7 gigabytes (probably way more now, I haven't checked in a while) worth of transactions dating back to when the first transaction was made and building to present day. Tallying up who made what transactions and for how much can tell you how much BTC is in any given wallet and you can trace those transactions back to whatever wallet was credited for mining any particular "unit".

[@nilp0inter2]

Peter Charij That makes a lot of sense to me.

[@hecko-yes]

Ad. 1: On the lowest level of Bitcoin, bitcoins don't actually exist. There are only "outputs" with unique identifiers which specify how much bitcoins they represent and who can use them in a transaction. When sending bitcoins to someone else, you're actually taking one or more outputs which "belong" to you and transform it into new outputs which "belong" to someone else. Outputs can be only used once; when you split an output, it creates new ones instead of the original being changed. This all means that you can search for the output's identifier on the blockchain and find the transaction it was created in. Then, you can take the "inputs" (spent outputs) of *that* transaction and find when *they* were created. You can keep doing this until you find the transaction in which the bitcoins were mined. Sounds complicated, I know. There *are* ways of getting around this, mainly involving sending someone some bitcoins and having them sent you the same amount of different bitcoins, but even those can be sometimes circumvented with enough effort.

[@knifefest]

>marcusius

[@patrickwienhoft7987]

Then the idea of mixing is displayed quite badly imo. What really happens is that those black coins are sold to several middlesman and then onto a fresh account that can't be connected to the original account owning the orinigally black coins. That's pretty much how money laundering works with cash, too. Following your argument that'd make all money involved in money laundering black money. You'd buy some art with your money from your illegal activities, sell it again and the money you got from selling would still be black money? That's the "9 white bitcoins" in your analogy that are thrown in, partially by unknown people. The whole argument boils down to this: If bitcoins were money, coinmixing would be illegal. And that's fine. However, it does not break Bitcoin as a whole. For Zcash, they just provide built-in money laundring. It's like if a bank said they exchange your dirty money for new, white money. That's illegal, but only for the bank, not for cash as a whole. Btw 2:14 The toaster example: I don't see how that connects to anything... What exactly is the "black bitcoin" analogy here? Lastly, the argument that bitcoin is used for drug trade etc is really not justified as that's exactly what happens with real money. And yes, I can see a coin's history, but I only see a bunch of user an transaction IDs. I'm not able to tell for what is was used.

[@nikize]

This is just as incorrect as the last one, why is this guy allowed to continue with these lies?

[@parteuy3434]

Because this is the internet, we are all decent people on here. Trust me, nobody is going on the internet just to tell lies. I am an expert.

[@andljoy]

I will support whatever makes it so all the miners who have 1000s of GPUs lose all there money

[@gyroninjamodder]

Why are you so against people owning computing hardware? Do datacenters make you angry because they have 10s of thousands of servers in them? Do you want enterprises to go out of business who have servers offering them petabytes of storage. You have quite the guts coming to a computer related channel and wishing harm to people who own more computers than an average person.

[@JaapVersteegh]

Whishing for people to lose all their money is sad. Get a life!

[@alvallac2171]

Andrew Joy *their

[@alvallac2171]

Jaap Versteegh *Wishing

[@YourTVUnplugged]

Relax, the 1180's are coming out soon... Grab one when they come out and chill!

[@driesdeboel]

You're saying Bitcoin is no real money because it's not fungible because it can be traced and then you say that ZCash and Monero should be banned because they solve this problem? So should we ban cash? No thanks

[@rikwisselink-bijker]

Nope, that's not what he said. The reason why the should be banned IFF you consider them money in the legal sense, is that they make money laundering so easy they might as well be designed for that purpose only. Being fungible is not a prime requirement, nor is it necessarily a problem in need of solving.

[@lenn939]

Rik Wisselink I don’t get why people think that they make money laundering so simple. If I come to an exchange with millions worth of Monero, that’s gonna look pretty suspicious. It’s pretty much the same problem as with lots of cash.

[@jonathanguthrie9368]

No, he's saying that Bitcoin is not legally money because it hasn't been declared to be legally money. He's also saying that it would be bad for Bitcoin to be declared legally money. In addition, he says that converting your assets to cryptocurrencies that seem to be designed to make money laundering easy might be a bad idea from a legal perspective. Of course, from a practical (as opposed to legal) standpoint, money is just something that many people are confident can be exchanged for the goods and services that they want. For me, that does not include cryptocurrencies, but for you it might.

[@lenn939]

Jonathan Guthrie Monero was definitely *not* designed for the purpose of money laundering. It was designed for the purpose of creating a trustless digital currency with transactional privacy and fungibility.

[@jonathanguthrie9368]

I didn't mention Monero, and I did not talk about whether or not any cryptocurrency was designed for the purpose of money laundering. Professor Anderson said something like that about Monero and Zcash, but I expect he was speaking loosely. I've only a layman's understanding of law, and I'm in the USA, not the UK, but if a cryptocurrency, in Professor Anderson's words, "provides a built-in laundry" then a court may declare that it so facilitates money laundering that it may just as well have been designed for the purpose and so any transactions using it may be presumed to run afoul of laws against money laundering. I don't know how to reconcile a typical person's desire for privacy against a typical person's desire to see the law punish those who wish to launder money. (The set of "typical persons" in the one case may not even be disjoint from the set of "typical persons" in the other case.) I do know that both of those desires are held by reasonable people.

[@parkerbeck3580]

There are legitimate reasons to hide transactions besides illegal laundering. Would you want your landlord knowing how much money was in your bank account?

[@samwise2588]

Good info, bad moral. How does a stolen note even end up in an ATM?! They're not "designed for money laundering", they're designed for privacy. Just look at the arguments over the recent hard-fork in Monero, wherein some of the forks believe that even vanilla Monero is too centralized because it has the ability to fork! Monero caters to the paranoid. Moreover, I guess we'll just have to treat a $250b mostly-traceable market (present sum all cryptos, $850b last December) as the largest crime-mob to ever exist since a few people value privacy from over-zealous technocrats and political elites... And just to break the idea that bad-faith currency cannot exist, take a look at counterfeiting. If I make a good-faith transaction with an individual and receive counterfeit notes and then later discover they're fakes, I lose all the given notes and receive no reimbursement for my losses. When push comes to shove, rational players would rather have bad-faith goods than no goods at all.

[@sasukesuite1]

Tell me how cash has any value? It's not backed by anything, neither is crypto. If anything, cash is printed with an insanely high valuation. For example, the US $100 bill costs 12.3 cents ($0.123) to produce in a matter of seconds, where as 1 BTC costs almost $3000 to produce and can take upwards of a year with a $10,000 investment in hardware. The key difference here is that *the people* reap the profits, not the centralized corrupt *government*

[@user-zz6fk8bc8u]

Modern currencies (USD, EUR, crypto) are worth something because of trust(!). Bitcoin doesn't get it's value from wasted energy in proof of work - it's just an economical correlation (not causation). Let's assume a single bitcoin is worth 1000 MU (money units) based on trust. Now many people start doing stuff to get bitcoins that take a smaller investment than 1000 MU - nobody would invest 2000 MU to get 1 bitcoin because they would lose money. It's exaclty the same with proof of work. People invest fiat money as long as they get out more bitcoins (measured in MU) than the put in. Thats why the amount of energy wasted(!) in bitcoin closely resembles the BTC value. There are many crypto currencies that are worth a lot even without proof of work. TL;DR: *It's not the wasted energy that gives bitcoin it's value, but people are willing to invest (hardware & energy) until it's more expensive than the produced bitcoins are worth*

[@JustinDeFouw]

In the old days sheep were to trade... cough...

[@Batfly01]

If someone can subtitle it (in eng or Fr), he's welcome because my French ears don't get all words: I almost understand he explain Bitcoin transaction as cash is not possible because of "Faith" of transaction. But I wasn't understand he's explanation about the "washmachine" and the pot story.... In add of this, the state money is also based of this faith, no? But the state money can be corrupted either, so.... Well, I need a subtitle here ^^" .

[@smithanderson3511]

When lambo?

[@jmiquelmb]

Smith Anderso when valuation is lowlo, there’s no lambo

[@parteuy3434]

31st of December 2019

[@HisCarlnessI]

I can name many other reasons that Bitcoin doesn't work as money... But very nice video!

[@intellivision-amico]

Its not anything