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517 sats \ 5 replies \ @supertestnet 7 Jun freebie \ parent \ on: Ecash mints are just like the Fed's Repo Window bitcoin
That depends. Just because you're not custodying sats doesn't mean you're not custodying anything. A mint could pop up tomorrow that gives you an iou for USDT instead of for satoshis. It still has custody of your money in that case. If it gives you any type of monetary IOU then it is acting as a depository institution, regardless of the monetary instrument involved. It becomes a custodian the moment it decides "instead of selling a regular *product* to our customers, we'll let them deposit and withdraw some form of *money*." That's the line. If you cross that line, from merchant to depository institution, you've become a custodian -- a bank -- a money service business.
Yes. If you say or do something that gives your customers a reasonable expectation of getting back the money they put in, or an equivalent amount of some other money, then you're a custodian. If not, you're not. Merchants do get an exception for 30 day returnable items, but if the government thinks a merchant is abusing this exception to get around MSB laws and act as a shadow bank, they come down hard on them.
No, I think there are rollups on ethereum that demonstrate the possibility of creating two different tokens on two different blockchains with a two way peg between them, without relying on a custodian. But on bitcoin, no one has achieved this yet, at least not to my knowledge.
If they can run off with user deposits then any value associated with their IOUs depends on their integrity and ability to evade US law enforcement officers. On an unrelated note, this is a good time to remind readers that I applaud folks who violate these unjust laws and I will continue doing my best to create tools that help you do so more effectively. But also, I value self custody enough to work on that even more.
I think they have more options than that. Some people say "with ecash mints it's all or nothing" but I think they neglect to acknowledge all of these possibilities:
- mints can require users to interact with them via http requests
- mints can then engage in selective traffic blocking
- e.g. they can block ip addresses known to belong to tor, vpns, anything in the USA range, or any other country
- they can even block specific businesses and residences with known ip addresses, specific cities, or individual provinces
- mints can do shotgun KYC and suddenly refuse to issue or redeem any more tokens without each user individually identifying themselves with full official documentation
All of these examples let a mint continue operating and selectively restrict either a class of users or an individual user -- and most of these are exactly the same tools "regular" custodians use to e.g. deny service to people in the USA, or in North Korea, or in Russia, etc.
I acknowledge that someone like Tether can do this on a "token by token" basis and a mint cannot, but since a mint can do it on a "user by user" basis instead, that's a sufficiently powerful set of tools to implement any government compliance requirements as soon as any government comes down hard enough on these service providers. And no amount of claiming to be special will save them from that.
Rather than try to "define" a way out of it, I prefer to make the tech hard to stop, its users and operators hard to track, and -- especially -- make self-custodial alternatives so that users don't have to deal with the extra trust assumptions that come with using mints.
This is a pretty well-reasoned response. I'm not sure I have any tenable stance to take in my argument short of saying that ecash mints should just sell their tokens and abandon entirely this business of redemption and 1-1 value with sats. Sell 'em as an altcoin and see how the market values them. Or, I can concede that they are indeed custodial bitcoin.
Rather than try to "define" a way out of it, I prefer to make the tech hard to stop, its users and operators hard to track, and -- especially -- make self-custodial alternatives so that users don't have to deal with the extra trust assumptions that come with using mints.
I have decided that I need to sign up for your classes.
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I have decided that I need to sign up for your classes
Wow, that's an unexpected result! Thank you. You can buy your ticket here: https://supertestnet.org/workshops.html
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Done!
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Thanks! I DM'd you here on stacker news with the link
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Excellent! I'm looking forward to becoming better at sticking it to the Man!
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