US Sanctions Tornado Cash – the need for privacy reveals itself slowly

Now that governments understand what blockchains are and how they work, they start to adapt to its presence. As everything on Bitcoin and Ethereum (and most blockchains) is public and traceable, the US has declared as of August 8 that any US ‘person’ that has anything to do with any Ethereum address ever associated with Tornado Cash is doing something illegal.

(where ‘person’ includes organizations, citizens, permanent residents, whatever)

Read more here.

Among many other things, this puts pressure on centralized exchanges like Binance, Coinbase to enforce US rules if they even so much as have a US branch, since

“While the non-US divisions of exchanges are separate legal entities, they might well be regarded by US regulators as de facto ‘foreign branches’ of the US entity. Bottom line is that if the exchanges wish to preserve their ability to operate in the US at all, they are strongly incentivized to ensure that their foreign-registered group companies also comply fully with OFAC sanctions.”

which means where once you had a neutral, global system/field, now you have politicization, weaponization slowly creeping in.

Privacy is slowly growing in importance and will be a major factor in the future

440 million USD was affected by USDC and USDT blacklisting these addresses. Where is all this wealth going to go?

The demand for private financial tranasactions is not going to go away. Everybody says “but it’s not going to affect me” until one day the government blocks their bank account.

History Lesson: General Magic, smartphone evolution and when the time is ripe for an invention

If you haven’t heard about General Magic before, they were a startup who invented the smartphone in the early 90s. Tony Fadell, young and bright-eyed, worked there for 4 years, living on Diet Coke, before eventually joining Apple, where he made the iPod and eventually fulfilled the dream in the form of the iPhone.

https://upload.wikimedia.org/wikipedia/en/6/69/Magic_Cap_OS.gif

There’s a even a documentary about it.

General Magic made everything from scratch. The UI (back when everyone was still using DOS), they even had an app store. But it wasn’t enough. The world simply wasn’t ready, they weren’t solving the problems that the world had back then. Chips needed to be faster, 3G needed to exist, capacitive touch panels, battery technology all had to improve way more.

Then there were PDAs. I never used one, but going from old gsmarena.com reviews, the use cases were pretty much the same as smartphones today, except instead of apps, you had a web browser.

The real difference was the focus on ease of use and a large screen enabled by ditching the physical keyboard. Once that happened, within a few short years everyone needed to have one. It just made too many things more convenient. It’s your guide in a foreign country, the most convenient bridge between the physical and virtual and most of all entertains you when you’re bored. But it’s important to realize it was already possible with PDAs.

The smartphone was a concept, but refined.

Where are we in crypto? Businesses are just now starting to dabble in it. See NBA Top Shot NFT collection, big fashion names releasing NFTs etc.

Where are we in privacy? We are starting to feel the need for it.

Let us wait and observe the world as it continues to unfold before us.

tokengineer

Tornado Cash sanctions will increase the…