Buy Monero or zCash, etc. with BTC? What defines a mixer? Etc. etc. Also, then you no longer have a nice transaction system and have to add middleware on every tx to make sure you're not getting "bad" coins. It's a mess, plus it hurts liberty and basically destroys the entire point of BTC.
Those are fine arguments, but unfortunately the reality is that there's not much standing in the way of this idea. A mixer is whatever exchanges define to be a mixer. And a mixer is only useful if it has a large number of coins tumbling through it, so they're pretty easy to classify.
If you ban mixers, it might turn bitcoin into the perfect Orwellian currency. Sufficiently far in the future, it might not be possible to hide any of your activities from the government. That may destroy the original point of BTC, but we don't know the original intent -- the point of BTC is that it exists and people use it, nothing more.
Bitcoin is still by far the most popular cryptocurrency, so Zerocoin and other derivatives don't yet matter much in comparison. And if you ban mixed coins, it's easy to imagine nobody will want to trade you Monero for mixed coins.
It's also easy for point of sale systems to check whether any given coin has been through a mixer in real time, so even if we do enter the era of "pay for everything in bitcoin," this still seems like a possibility. The consequences are pretty steep.
In order to blacklist coins, you do not need to get a couple exchanges on board. You need to get EVERY exchange on board. Because if a single exchange exists that accepts my blacklisted coins, in any country in the entire world, then that means that I can turn my blacklisted coins into real money, and then I can convert that money easily afterwords.
And if such an exchange existed, then everybody would just use THAT exchange. Nobody would use an inferior exchange that has a history of taking away your bitcoin or blacklisting your coins.
In order to censor transactions, you have to take control of EVERY important player, not just most of them.
And even if you DO succeed in that monumentally difficult task of taking over every important bitcoin player in the entire world, well now you need to keep that up. Now you need to stop NEW players from forming that don't follow your inferior blacklisting rules.
And you have to stop them in both bitcoin, and every single other altcoin/cryptcurrency . Because even if you succeed in killing bitcoin, anybody can just create a new altcoin.
It's not true, though. The difficulty is getting USD, Euros, or Yen out of exchanges, not getting BTC into them. And while almost every exchange will happily take your BTC, very, very few will send you dollars without thorough vetting. You normally need a bank account in the country the exchange operates in, for example.
It's true that you'd be able to use a service like localbitcoins to sell your coins, but in this hypothetical future, exchanges are using an agreed-upon protocol to identify and blacklist mixed coins. Even if it's not fully standardized, it's easy to check whether a coin has been tumbled through any mixer of sufficient size. So I'm not sure anybody on localbitcoins would be willing to pay the same prices for these.
But then Bitcoin is no longer Bitcoin. It is now censorship coin.
You have it opposite.
The price of censorship coin would crash to 0. Why would I as a consumer want to buy coins that can be blacklisted? Bitcoins would be useless and therefore worthless.
I'd sell those censorship coins and buy alt coins that are not being censored.
And the price of uncensored alt coins would skyrocket, and the exchanges transacting in inferior coins would go out of business.
Maybe that's what everyone would like to believe, but people believe many things about Bitcoin that aren't true. People love to make up explanations for why the price is rising, but it seems likely that the price is rising because people are buying them, not because people are buying them for a particular reason.
Your vision of how things might turn out is certainly possible, but so is the opposite.
One way the opposite could happen is if the US government officially backs bitcoin. They might do this if they realize that by banning mixed coins, it becomes the perfect tool for monitoring everyone's financial activities.
It's unlikely, to be sure. Especially if implementing confidentiality into bitcoin is a real possibility. But without that, it seems at least equally likely as bitcoin crashing due to the ban.
I read every word. If you have a follow-up argument, let's hear it.
You've been taking the conversations in personal directions -- for example, you accused someone else upthread of having Stockholm syndrome, and now you're saying I didn't read replies. Please engage with the argument, not the person.
I think I've been clear enough. You've been asked repeatedly how a facility could even be constructed that would be effective in your 'go for the exchanges' argument, and have yet to recognize the ineffectiveness of any suggestion you've made. This after repeatedly having it demonstrated to you. Furthermore, you're not presenting new arguments, just re-hashing the same one with more words and the same lack of understanding of the subject at hand.
And I think the stockholm syndrome argument for people who argue for the type of control they think banks have without understanding their limitations is a pretty good description of that argument, especially from someone who, not me, brought up 'denial'. Like I said, these are old arguments and suggestions that wouldn't have been effective four years ago, let alone today, where there is even less possibility of control. For the reasons that have been demonstrated by not just me.
It doesn't take blocking all the exchanges to cause a big drop in the value of blacklisted coins, and make most people not accept them. And any exchange that freely trades in blacklisted coins can itself be blacklisted, making an escape to another cryptocurrency fail.
In the grand scheme of cryptos it doesn't really matter what the current value of a coin is as long as it meets its use case. But that is unrelated to your point. Most people can avoid these strategies with trivial ease. With the introduction of lightning and atomic swaps, trivial will become mundane. Less than mundane? It will quite literally not exist as an issue. My theory is that it is this introduction that is finally getting push back from banker types. Anyone who understands it thinks "pop! There goes the genie"
> And any exchange that freely trades in blacklisted coins can itself be blacklisted
