Bitcoin under control: the danger of KYC according to demand pool

In the Bitcoiner community, the centralization of Bitcoin’s mining (BTC) remains a recurring concern, fueled by the hashrate concentration in a handful of pools and large mining companies that dominate the network.

However, for Agustín Krupka, Developer of Demand Pool, a pool that Stratum V2 uses to decentralize mining, this is not the only current risk in the creative protocol for Satoshi Nakamoto.

In an interview with cryptootics, Krupka points out another equal threat of criticism: the Erosion of private use peer-to-peer (P2P) of Bitcoin due to the normalization of the KYC (Know Your Customer) already the comfortable acceptance of these verifications by many users.

While mining centralization could cause loss of technical control on the network, Krupka points to that normalization could transform BTC into a CBDC (Central Bank digital currency). This type of digital currencies has been criticized for its ability to violate the privacy of people and their potential to increase the control of banks and governments.

The Kyc as a vector of Satoshi’s dream

Krupka identifies the KYC as one of the greatest dangers for Bitcoin’s original vision:

«The other biggest attack vector in Bitcoin itself, Bitcoin as a protocol, viewed as Satoshi Nakamoto, which is an electronic cash system, that is, with privacy, is the KYC, the KYC for the purchase and sale.»

Agustín Krupka, Bitcoiner developer of Demand Pool.

For him, the demand for identifications associated with each transaction or address He undermines the beginning of a pseudonym and sovereign system. If all Bitcoin operations are linked to personal data such as «an identity letter, a name, a social security number associated with it», the result would be devastating according to Krupka: «For practical purposes it is a CBDC (Central Bank digital currency). At that time, we will have lost ».

Krupka continues to point out that, although Bitcoin was designed as a pseudoanonym intentionally by Satoshi Nakamoto, KYC’s mass implementation could turn it into a surveillance tool. This transformation would not only betray that ideal of privacy, but also would facilitate state control over transactions. «Today governments already understand Bitcoin, they already know where you enter and where you go out, where to tighten,» he warns pointing out regulations such as the «travel rule«(or travel rule).

The travel rulepromoted by the International Financial Action Group (FATF), requires that virtual asset services (PSAV), such as exchanges or custodians, share information on the origin and destination of cryptocurrency transactions, including Bitcoin, when they exceed a specific threshold.

These measures, according to the Developer of Demand Pool, make users potential criminals for exercising their financial sovereigntya scenario that considers more dangerous now than at the beginning of Bitcoin, when its illicit use was more visible but less understood by the authorities.

The acceptance of the KYC and the criminalization of the P2P

However, Krupka acknowledges that KYC is not a universally rejected problem. «It doesn’t matter if there is the KYC, there are people who want to go through it,» admits, referring to some users preferring the simplicity and security offered by that system.

For them, delivering personal data means protection: «Yes, come, here is my phone number, here is my ID, and if one day I shit it or someone changes my password or makes me whatever, you save me.» This comfort contrasts with Krupka’s concern: KYC standardization should not derive in the «criminalization of the P2P.»

«What should not be normalized is the criminalization of the fact that I as a sovereign person can exchange my bitcoin without it to seem that I am a criminal.»

Agustín Krupka, Bitcoiner developer of Demand Pool.

According to Krupka, this regulatory trend, which punishes those who evade the KYC, represents a growing threat precisely because governments have learned to exploit it. Unlike the first years of Bitcoin, when its anonymity was a myth and its limited adoption, today the most effective «control points», from fines to prison, which discourage the private use of the asset.

Money laundering: a disassembled argument

An additional point that Krupka addresses is the perception of the Bitcoin Network as a vehicle for illegal activities, an argument that often justifies the KYC. «It is always said, in Bitcoin there is 1% of money laundering or illicit transactions,» he acknowledges.

However, the Bitcoiner developer exposes that percentage in a global perspective: «Of all the world’s illicit transactions, detected, how many of them pass in Bitcoin or in cryptocurrencies in general? And you see that most, totally absolute, do not pass in Bitcoin ». For him, who wash money, «Politicians, great entrepreneurs, those who control»operate mostly outside the cryptocurrency ecosystem, denialing the narrative that associates BTC with crime and uses the KYC as a shield.

Technical Centralization: The Power of Pools

Beyond the KYC, Krupka does not ignore the technical risks faced by mining and another of the axes of its analysis is the concentration of power in a few pools. «Today there are only seven miners in the world, basically, which are the largest pools,» he explains, referring to how a few operators concentrate the global hashrate.

According to Mempool. These are Foundry USA, Antpool, Viaabtc and F2pool.

These pools, Krupka followed, act like Unique decision -making what transactions enter the blockswhile the miners who participate in these platforms are reduced to «mercenaries» or «hash suppliers» who delegate their computational power without real control, in exchange for a reward.

«The ideal is like Satoshi Nakamoto looked for it, a CPU, a vote,» said Agustín Krupka, evoking the vision of a network where Each miner can decide for himself.

Additionally, as Cryptonoticias reported in the first part of the interview with Krupka, this developer also questioned a facet of these mining pools: their payment system. According to his consideration, the Full Pay Per Share payment model (FPPS) «is a scam» and is equivalent to a risk insurer, leaving profitability for users of those pools and favoring these platforms.