Though very much a peripheral candidate, Andrew Yang has garnered a great deal of attention of late. He recently qualified for the first presidential debate and is famous for his Universal Basic Income proposal. Though his website hosts an impressive swath of policies, many simply know him as the UBI guy. His concerns about automation in the near future come really close to setting him apart from the pack. But his solution? Absolutely gutting the crypto industry, setting back what the world needs most in an increasingly global society. That’s right: he’s after your Bitcoin.
Andrew Yang on Crypto
One of Yang’s many policies calls for “Crypto/Digital Asset Regulation and Consumer Protection”. Put simply, he thinks he knows what’s best for you and your money and thinks you need protection, Yang Style™. Admittedly, he recognizes the dangers of strict crypto regulations, condemning New York’s BitLicense law. But just because he opposes one regulation doesn’t mean that he opposes all of them.
Yang doesn’t leave too much for us to guess about his ideas, which is a blessing and a curse. There won’t be any surprises, but what shows is still ugly. Specifically, Yang would “clarify the tax implications of owning…digital assets”, “define which federal agencies have regulatory power over…crypto”, and “create one national framework” for cryptocurrency. He forgets that Satoshi Nakamoto created Bitcoin largely to fight regulation and centralization. Or maybe he just doesn’t care.
In the original Bitcoin white paper, Satoshi explains that Bitcoin eliminates the need for a transaction middleman. Providing cryptographic proof of a transaction “allows any two willing parties to transact directly with each other” without needing to engage anyone else in the process. And now, ten years later, it’s pretty clear that Satoshi was a true visionary; smart contracts, most notable in the Ethereum blockchain, carry out this very phenomenon on an incredibly efficient basis with minuscule energy costs.
One of the founding principles of Bitcoin is that it has no ties to any government or major institution. The decentralization is the key to its success. At best, Andrew Yang is ignoring the very purpose of crypto. At worst, he’s dealing the industry a crippling blow.
As of right now, one of the biggest upshots of crypto is that transfers are remarkably cheap. Unlike banks, which often charge several percent (or flat rate charges), crypto is remarkably lower priced. Though different coins have different exchange costs, nearly all will beat a traditional institution. In particular, Stellar takes pride in only charging one ten-thousandth of a cent to send money anywhere across the globe. As a result, it is a popular coin for remittance payments. This suggests a shift of poorer American workers towards crypto, as 15.8% of Americans sending remittances now use crypto.
So, what happens to that when Yang gets in office and levies federal taxes on Stellar? Well, Juan from Texas doesn’t get to send $20 a week back to his family in Mexico when Stellar prices surge. Now, he pays a portion of that to the federal government; the more that Stellar increases in value, the more Juan loses. And if Juan finds a coin that he thinks will have greater success than Stellar, but Yang’s precious federal agency hasn’t approved it yet? He can ask Uncle Sam or face legal penalties for helping his family in a peaceful but non-endorsed manner.
Any degree of taxation will harm the crypto industry, but the bone-chilling fact is that we don’t know how far Andrew Yang would go in the name of “human capitalism”.
A Lack of Privacy
Though many believe otherwise, Bitcoin is not a private blockchain. By typing in someone’s address, you can see how much they have in their wallet and what transactions that wallet has taken part in. Transactions are secure, but anyone can see them.
However, all that you can see is someone’s address; without identifying information, it is next to impossible to then connect that to an actual person. Some platforms, though, such as Coinbase, require an ID to buy, trade, or sell any cryptocurrencies. Others, such as Binance, do not. Likewise, smaller platforms for altcoins, such as TronLink, require no ID.
Yang: No Right to Anonymity?
Enter Andrew Yang, the crypto executioner. In order to collect tax revenue or regulate the industry, there must be some way to connect an address to the person using it. Certainly, the easiest way to do this would be to require all platforms to demand ID verification for users. This has a disastrous consequence.
Once again, Bitcoin’s blockchain is public, which means that anyone can access your balance and transactions. But if a federal agency can connect your address and your name? They can then know exactly how much money you have and every transaction you’ve made. This is an obvious breach of privacy and once again defeats the whole purpose of crypto.
I don’t doubt that Yang has good intentions. All the while, he fundamentally misunderstands the notion that Bitcoin is supposed to be decentralized and have nothing to do with any government. He states that Bitcoin should be a big part of the U.S.’s future, but it’s already becoming so without his help. These words are a subtle but not foolproof mask for more taxes, more regulations, and more government control over the people. Involving them in crypto would choke privacy and harm many who are simply seeking a better life.
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