Cryptocurrency off-ramps, and the shift towards centralization

It is true that exchanges are a pressure point, and that anonymised transactions are a compliance risk-factor. While the article is notably lacking evidence for the claim that we are &quot;now&quot; seeing this &quot;increasingly&quot;, assuming it is not yet the case, it may well be an increasing problem going forward.<p>Ultimately, this a civic matter; as much as we want to ensure we have the right to encrypt our communications, to not disclose our passwords to police even when being prosecuted for a crime, as activists commonly insist on, so should we fight to maintain our existing rights to financial privacy.

One thing not noted here, and that I&#x27;d love to see some numerate analysis on, is the fact that the KYC requirements among the major exchanges have effectively bifurcated crypto assets. There is &quot;clean&quot; BTC and &quot;dirty&quot; BTC now. One is clearly worth more than another by dint of its greater flexibility (i.e. if you&#x27;re offered 3 clean ETH or whatever for your Pondering Lemur NFT, or 5 dirty ETH that you can&#x27;t convert via Coinbase, which offer do you pick? It seems to me that many people might prefer the former).<p>Yet... no one anywhere is trying to track that price discrepancy? This seems like it would be an important bit of data!

It&#x27;s getting increasingly easier to buy assets like real estate with stablecoins.<p>Barring further regulations I think the peak financial repression era has already passed. The worst time was probably 2018 - local peak in crypto interest bringing in heat, but no dexes with any liquidity. Since then it&#x27;s only getting better - now anyone can hold millions of dollars anonymously and transfer them to anyone in the world, dexes are so liquid there are no reasons to use spot cexes except to cash out, several debit card solutions that can be loaded with crypto and stablecoins. Laundering money from crypto is the easiest it was since probably 2013 when no one cared at all - manufacture fake profits on tokens&#x2F;nft held in clean wallets.<p>Without new laws, the situation is only getting better. Exchanges already demand very heavy kyc&#x2F;aml, so the only thing that would reverse the trend would be making anonymous defi a crime for the users. I think it&#x27;s unlikely at this point.

&gt; someday, goods and services will be exchanged for cryptocurrency rather than traditional money<p>I mean, I&#x27;ve seen that happening at an increasing rate since 2013 (the first time I bought a drink at a bar with crypto). Today, there are several monthly services that I pay for with crypto. It&#x27;s not for everyone of course, but there is a virtual world where crypto is the preferred or only currency. Over time, that world and the real world will converge.<p>We can already see that starting to happen with China&#x27;s national crypto currency. As more exchanges support that currency, it will bring this convergence full circle, at least for part of the world. The rest will follow in time.

For off-ramps, can&#x27;t you just put up a bunch of orders on something like Bisq? Slightly more work involved, but it is a totally decentralized way to do it.

Any financial system is built on on an element of trust.<p>Crypto doesn&#x27;t displace trust --- it misplaces it.<p>Instead of trusting the <i>regulated</i> banking system, you end up trusting <i>unregulated</i> &quot;exchanges&quot; --- where fraud is not even illegal.<p>Need an example of crypto-fraud? The most widespread example is Tether, USDT. The idea that USDT is backed by USD is a well known joke. No one really knows the full extent of this fraud but all indications are it is one of epic proportions.<p>Yet the exchanges maintain the $1 peg for USDT.

How much do people trading on exchanges need to worry about counterparties giving them tainted crypto and ending up in a situation like this?

I like this recent South Park clip<p><a href="https:&#x2F;&#x2F;youtu.be&#x2F;N8f-BQFo7lw" rel="nofollow">https:&#x2F;&#x2F;youtu.be&#x2F;N8f-BQFo7lw</a>

This is a valid criticism and part of why privacy-by-default MUST become the new norm for major cryptos if they’re going to thrive.<p>A lot of people don’t understand that when you deposit to say, Coinbase, they are looking at the COMPLETE history of your wallet back to genesis. If there’s anything they don’t like your funds are toast.

No word about the lightning network?<p>The receiver of a LN transaction does not know anything about the sent coins.<p>Are any exchanges accepting payments via the LN? I so, the issue is solved, no?

It sounds like buying cryptocurrency might be risky.

Crypto has always been about centralization. It&#x27;s how the VCs make their x10000 return.

yes, US has been doing regulatory capture to extract profits from crypto since 2016, it&#x27;s horrible but the silver lining is that crypto was forced to innovate and produced the wonderful jungle of DeFi that currently exists and is used by many

&gt; cash out<p>you&#x27;re not supposed to do that!

Basically people need to launder their legitimately earned&#x2F;acquired crypto just so financial institutions don&#x27;t flag it.

I have a controversial opinion. You don&#x27;t need offramps.

It&#x27;s amazing to watch in real time Crypto Andys learn all the hard lessons that went into making the financial system they seem to despise.<p>The common denominator in the examples in the article is that the crypto system at some point has to at some point interface with the Real World and that&#x27;s where it all falls apart.<p>There&#x27;s an example of a woman whose bank won&#x27;t process the transaction. Just because it&#x27;s crypto doesn&#x27;t mean you can escape KYC&#x2F;AML laws.<p>Another example was the person whose crypto was tainted by going through the same service used to launder ill-gotten gains, which even assumes their story is true (eg their Bitcoins may well have been ill-gotten).<p>NFTs are the same. I could buy an artwork but something outside of that system is required to show it&#x27;s &quot;authentic&quot;. I mean I could save the same image to my hard drive (possibly modifying a pixel) and then create a new NFT and what&#x27;s really to distinguish it from the original? If there is no original NFT, how will a potential buye revaluate the artist actually issued the token?<p>I&#x27;ve yet to see an actual problem crypto solves other than avoiding laws. It&#x27;s the biggest solution looking for a problem I&#x27;ve ever seen.

<i>[EDIT: I wrote a somewhat long comment that really wasn&#x27;t directly related to the article, so I chose to remove it.]</i>

Bitcoin has found product market fit with the correct privacy needed for regulators to be happy with it. A few examples of bitcoin privacy shortcomings, doesn’t mean the system isn’t wildly successful. One of the best electric car company in the world, Tesla, holds $2 billion worth of bitcoin today. A lot of bitcoin is bad and centralized and whatever narratives are missing the big picture.