The U.S. Financial Crimes Enforcement Network, or FinCEN, recently proposed a number of new rules for financial institutions that operate in digital currencies such as Bitcoin (BTC). To summarize the proposed rules, the exchange will first need to inform FinCEN when a customer makes a purchase over USD 10,000 and collect KYC information every time a USD 3,000 or higher transaction is completed using an insecure wallet.

This means that if a customer buys $ 3,000 worth of bitcoin and withdraws it from their wallet, they not only have to verify ownership of that wallet, but also provide their name and physical address, as well as additional identifying information.

Personally, my life changes a little. I live entirely on cryptocurrency since 2015, no bank since 2016, I have never used the central exchange and received all my coins as compensation for goods and services. But for very little in my life, we are likely to see a huge impact on how most cryptocurrency users run their businesses. I would venture to suggest that most users interacted with a centralized platform requiring KYC.

For the rest of the cryptocurrency users, the recently proposed rules will become a serious obstacle to deposits and withdrawals. The user is currently logging into the central office, submitting KYC documents for approval, and can buy and withdraw bitcoins to a wallet that they control, including a cold storage hardware wallet. When they want to make a profit, they can return the money to the exchange and sell it to spend money in the bank.

However, in the future, they may be required to confirm ownership of the wallet from which they are withdrawing funds, including indicating their physical address, as well as indicating the source of funds upon returning to the exchange. This can lead to many users, including those who are privacy conscious and independent (there are many in the bitcoin world), looking for other, less intrusive ways to use their digital assets. By paying directly for the goods and services they want, instead of selling them first for fiat currency, you avoid the headache of bypassing the frictional friction that regulation brings about every time.

The ‘closed central exchange’ experience will wake up Bitcoin
There is a reason relatively few people engage in recurring transactions and purchases of bitcoins – they don’t need it. An ordinary user registers a swap account, buys cryptocurrency and can sell for some winnings. Some of the more avid users can buy a hardware wallet and transfer money to it from the exchange, which can be a rare transaction for large amounts without real speed requirements or especially low fees. The basic process of buying for investment purposes, and sometimes selling for profit or use, runs relatively smoothly with centralized exchanges, which is why so far so few people have ventured out of this circular loop.

Many bitcoins choose to stay inside this loop for the same reason they might try to get out of it soon – and avoid friction. Of course, many will simply struggle with additional organizational steps, but many, especially thought leaders and longtime community founders, will choose to stay closer to the saffron spirit.

Bitcoin Certification Environment will give you the chance you need
Bitcoin was born and raised for decentralized digital payments. At some point, this gadget faded into the background of the digital storehouse of valuables, and the tools to restore this goal were not yet sufficiently developed – primarily, of course, extensions.

Bitcoin chose solutions for off-chain expansion (Lightning Network) and optimization of chain transactions (SegWit). In recent years, there has been little development in both cases: SegWit transactions account for less than half of the daily transactions in three years, and the growth of the Lightning Network has accordingly stagnated, with very few exchanges or other large players in the ecosystem integrating them at this time. … As we mentioned above, this was not a big problem given the current state of affairs.

However, when the average user gets to know the Bitcoin network directly as it works today, they wake up rudely when asked to either completely relax or pressure wallets and service providers to prioritize SegWit and Lightning. In a free market that is largely a shift towards cryptocurrency, consumer demand is driving innovation to meet needs. If enough Bitcoin customers start demanding that Bitcoin runs smoothly for small and efficient transactions (other than just posting them on Twitter), it will seriously push the market towards the ecosystem.

Source: CoinTelegraph

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