Treasury Sanctions Open-Source Software
The listed below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazines premium markets newsletter. To be among the very first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.Early on August 8, 2022, it was revealed by the U.S. Treasury that Tornado Cash was contributed to the U.S. OFAC (Office of Foreign Assets Control) SDN list (the list of specially designated nationals with whom Americans and American companies are not allowed to negotiate). Twister Cash, a non-custodial open source software application job constructed on Ethereum, allowed users to blend their coins through using the Tornado Cash wise agreement, obfuscating the previous path of the coins (which are of course being transacted across a transparent ledger). The sanctions placed were particularly significant because they were placed not on an individual person or specific digital wallet address, but rather the usage of a clever contract procedure, which in the many standard type is just information. The precedent set by these actions are not ideal for open source software development.All-time Tornado Cash data – Source: Dune AnalyticsAll-time Tornado Cash data – Source: Dune AnalyticsFollowing the statement, it might be seen that Circle, the centralized issuer of stablecoin USDC, blacklisted every approved address from using USDC.These actions have led many to question the security of holding central digital properties, even for non-criminals who just choose to use privacy-enhancing tools. The overall number of USDC addresses that are blacklisted now stands at an existing total of 81. Readers can track the banned address list here.Source: Dune Analytics On a similarly scary note for active bitcoin/crypto designers, the co-creator of Tornado Cash Roman Semenov had his GitHub (open source advancement repository) account suspended. This ought to worry freedom-loving bitcoin/crypto enthusiasts, provided the nature of the sanctions put on Tornado Cash– which, as stated previously in the piece, is simply non-custodial software.These actions likewise plead the question as to what is the future of lots of tools in the so-called DeFi space, that depend upon centralized stablecoins and that might have centralized development choke points. As ruthless as it may be, the decentralized and natural nature of bitcoins increase is the only factor it is still standing today. Open-source software application will continue to run as developed, however offered the increasing pressure that will likely be put on software/wallet/protocol developers, only the greatest and most truly decentralized networks will not be co-opted. It needs to be reiterated that stablecoins themselves, while helpful to escape the short-term volatility of bitcoin/other crypto assets and assist numerous around the world gain access to U.S. dollars, are centralized.Zooming out even more, when looking at the long-term case for bitcoin, amongst its greatest value proposals is the fact that its an asset that has no counterparty risk nor dilution (decline) risk. Yet, more notably in light of numerous federal government regulations that are taking shape and are likely to come, Bitcoins true decentralized residential or commercial properties and censorship resistance will be simply as crucial.
