Please may we have a formal response to the KYC requirement for ASIC producers

[mistfpga]

Hi,

Sorry for posting this here. I couldn’t really think where else to post it now the forums have moved to the foundations control.

correction: Joshs did not meet with innosilicon he met with canaan.

As outlined in the other thread about bitmain KYC rules it was pointed out by a @joshs who met with bitmain and innosilicon, that innosilicon would need to do similar if they wanted IPO funding.

correction: Joshs did not meet with innosilicon he met with canaan.

So this is an issue that impacts all single purpose mining machine manufacture. (how long before they say they need the info for tax reasons or some other excuse?)

This is a massive threat to the privacy of zcash.

Can we please have an official statement by zcash co addressing this issue.

Thanks,

[johnwisdom]

@mistfpga

now the forums have moved to the foundations control.

The forum is in hand of the community now, not the foundation.

@mistfpga

This is a massive threat to the privacy of zcash.

Only for miners who buy from bitmain and that don’t have a company to hide identity from them.

[mistfpga]

@johnwisdom

The forum is in hand of the community now

Oh, right, I thought I read that they were given to the foundation and shawn was going to run them with time locked zec.

@johnwisdom

Only for miners who buy from bitmain and that don’t have a company to hide identity from them.

No, it is pretty much any company that needs to be audited for one reason or another it just so happens in this case it is for an IPO. Anywhere where numbers can be ‘fudged’ a kyc audit could be applicable. This is only a privacy issue for companies that produce single use cryptographic hardware (be it an HSM or a cryptominer)

They say Price Waterhouse Coopers (hopefully that is just an example. jeez imagine deloitte doing it. This is big league, it will filter down. it also gives the banking system an ‘in’ in the crypto world.

BITMAIN Real Name Authentication

I sat down with Jihan yesterday. We were both at a small conference in Singapore. I also met with the CEO of PoEx / Canaan. While he competes with Jihan, he confirmed what Jihan told me. It’s a banking requirement necessary for a potential IPO. An 3rd party audit is required (by PWC, etc) to verify sales numbers. It’s common practice for company to fudge numbers by selling a large volume of product to a 3rd party, or group of them, that are essentially owned by the seller. It’s selling to yours…

It is this post that made me ask for a public statement. Even if I am wrong, there must have been some discussion about it. This is a huge deal. much bigger than the asic thing.

[Shawn]

@johnwisdom

The forum is in hand of the community now, not the foundation.

@johnwisdom That is not accurate. I am contracted to Admin and Moderate on this Forum and the Chat.

Legally they are part of the Zcash Foundation. See the Terms of Service: Terms of Service - Zcash Community Forum

[johnwisdom]

my bad and thanks for clarifying!

[Shawn]

Pinging @acityinohio and @sonya about this thread. I’m not sure that the Zcash Foundation has a position on what third party vendors like Bitmain choose to do with their customers information.

[acityinohio]

Thanks for tagging us @Shawn. The Foundation does not have an official position on this, but I articulated my personal position here:

BITMAIN Real Name Authentication

FWIW, my personal opinion (not of the Foundation officially) mirrors yours, @daira’s, and others in this thread—the KYC is an absurd requirement, and sets a dangerous precedent. @vgm’s suggestion is a good one; if you want to buy a Bitmain miner, go through a reseller without a crazy KYC requirement. Or vote with your dollars and buy a competitor.

[mistfpga]

Hi,

Yes, I had read your response, however I felt it lacking in useful information. the kyc is not bitmains idea. They are just doing what they are told. This could easily be a govt tax dept that wants to check the balance sheets.

Yes in the short term use a different vendor. but in the long term? then what? is it really only me that sees this as a really big issue? I cannot see why people are not concerned.

Why doesn’t the foundation have a position on this issue? it is not vendor specific but technology specific. Is there anyway to propose the idea to the foundation for discussion?

Thanks for your time.

[acityinohio]

I appreciate your concern but I also am not sure there’s much the Foundation could do in any official capacity in response right now, at least in the short term. To your own point, if we assume this is true:

the kyc is not bitmains idea. They are just doing what they are told. This could easily be a govt tax dept that wants to check the balance sheets.

…then I cannot imagine the Chinese authorities would listen to a (comparatively) very very tiny US-based 501(c)3. So short term there’s not much we can really do, although as stated I would encourage folks to vote with their dollars or buy through re-sellers without KYC.

Your longer term question is fair, but this development just underlines the need to have a more competitive mining ecosystem—although there is much debate on how to get there (see various discussions on simple PoW versus ASIC resistance, PoS, etc). But I think everyone is aligned on getting there, whether from the Foundation, community, or company.

[mistfpga]

Hi,

I am not asking for a response to this issue like “fork fork fork”. I am expecting acknowledgment that this issue is an ASIC issue. There are a number of responses and positions that the foundation could be discussing and suggesting to the community. I am not asking for a call to arms, its just you see where this road leads right? I think I might not be expressing myself too well.

@acityinohio

I also am not sure there’s much the Foundation could do in any official capacity in response right now

Not even discuss the technical merits and pitfalls? for example the foundation mission statement mentions they are shepards of the protocol and community.

@acityinohio

I cannot imagine the Chinese authorities would listen to a (comparatively) very very tiny US-based 501©3

I cant imagine they would listen to a large US-based 501c3, they just about listen to your president. So obviously this isn’t a solution. What other alternatives are there? The list ranges from forking monero style so commodity hardware is a thing. all the way through to shell companies that resell the equipment. - yes I think neither of these is a good idea. however it just shows how many options their are.

There is a huge, risk now from ASIC’s themselves, due to the single use money printer ideology. if they could be designed in a way to say have an FPGA core that allows mining of both privacy and non privacy coins then KYC might be less of a problem and non existent on the secondary market.

KYC is an ASIC issue not a bitmain issue. once enough customers buy enough from innosilicon they will be the same.

So, I am looking for answers, or statements that include answers for questions like (yes I know they are hypotheticals at the moment):

Does the foundation:
1 - Is it an issue IF all mining hardware purchases require KYC
2 - KYC itself is not inherently bad, what is the general impression from the foundation?
3 - KYC can be used as a tool of oppression, what strategies are the foundation considering to stop this?
4 - Should I just shut up and go away?
5 - KYC can be subverted/avoided by various means, who/how is the foundation going to assess this?
6 - Does the foundation consider KYC laws compatible with the privacy goals of zcash?

Sorry for the essay. I guess I am not really expecting much more than has already been posted, Im just showing there are other ways to solve this problem and they should be investigated.

I think we disagree on what makes a competitive mining ecosystem. I also think that getting asic producers to make and market their machines as multi use devices could make a difference. I don’t know. I do know that a discussion needs to take place, informally on the forums or formally within zcash fo. Then zcash fo needs to talk to zcash co, etc etc. You guys have the resources and the skills.

I’m just some bloke on the internet. can you hear the paper roar? - live small die never.

steve.

[sonya]

I understand your frustration. Basically, I concur with what Josh said. In response to these specific concerns:

1 - Is it an issue IF all mining hardware purchases require KYC

Yes.

2 - KYC itself is not inherently bad, what is the general impression from the foundation?

It’s not inherently bad in all situations, and the regulations are certainly well-meaning.

3 - KYC can be used as a tool of oppression, what strategies are the foundation considering to stop this?

All we can do is encourage more competition among miner manufacturers, like Josh said. We don’t have the power to do anything else.

4 - Should I just shut up and go away?

No.

5 - KYC can be subverted/avoided by various means, who/how is the foundation going to assess this?

We’re certainly not going to advise that people do anything illegal! Again deferring to Josh: “I would encourage folks to vote with their dollars or buy through re-sellers without KYC.”

6 - Does the foundation consider KYC laws compatible with the privacy goals of zcash?

Only insofar as KYC laws prevent people’s control over their own financial lives. See the answer to #2.

[joshs]

Hi. Just for clarity, I did not meet with Innosilicon. I did meet with Bitmain and then Canaan, who previously filed for a Hong Kong-based IPO and provided much of the detail on the requirements. Canaan does not currently offer a Zcash ASICs miner.

[mistfpga]

Hi,

Really sorry for misquoting you so much that I had attributed the discussion to be about inno and bitmain. probably because people were saying just buy from inno then.

There is not much point in going back and editing my posts (although I will mention it in the first post I attributed to you.)

The point still stands though. Canaan just verified that it was not bitmain requiring this. They were told to get this information. This is the worrying bit. Who else can tell them to reveal information, or even to start gathering information.

I really think this needs more discussion. The problem is it is a single use device. if it had a switch on it that allowed it to do say Folding@home or any of the @home projects then the KYC of a privacy coin is now not a problem. the secondary functionality /must/ be AI and /must not/ be crypto - otherwise you are opening yourself to more export restrictions.

Now, personally, I dislike ASIC’s but there is a perfectly reasonable idea that would allow for a company to continue to make asics for a privacy coin (something they must all be worrying about) and not have the stigma of KYC.

but like I said, this is a discussion. Why does no one else think this is a problem? Or seem to think the solution to the problem is to buy from firms that /currently/ don’t need kyc (yeah, lets see where that is in 2 years)

The essence of this problem, as I see it, is in 6 months it will be kyc on purchase of single use money printers/heaters for tax reasons. just like kyc on fiat to crypto.

the asic thing took a lot by surprise. can we at least try to figure something out.

Im still amazed that zcash fo don’t think they should be getting involved. If not them, then who? zcash co? Someone needs to sort out some kind of round table for this.(hint hint, looking hopefully at you @bitcartel) Can we stop this before it gets out of hand please?

Am I tilting at windmills?

[mistfpga]

Hi sonya,

Thanks for the response!

@sonya

I understand your frustration. Basically, I concur with what Josh said. In response to these specific concerns:

1 - Is it an issue IF all mining hardware purchases require KYC

Yes.

Okay, so now it looks like that day is approaching. Now what?

8feaca9f2d64652889e0bc08d3eaffce8fc643d1da9b3b792dad0ac7978779c9

What is the foundation for if not to liaise between zcash co, the community and the mining producers. This impacts all of these people in various different ways. Whos job is it to map out all these interactions and contact the various people and open lines of communication?

@sonya

All we can do is encourage more competition among miner manufacturers, like Josh said. We don’t have the power to do anything else.

Really? to be brutally honest that sounds right on the ethical boarder. Wouldn’t a better position be to inform the public of the implications rather than blindly recommend a competitor? So how is this expected to work? what is supposed to be the protocol for this kinda stuff? Im really confused. Maybe I am just looking in the wrong places, but unfortunately I do not have time to keep up with mailing lists, twitter, bitcointalk and the the other 99% of ‘news’ outlets.

Has zcash co made an official statement? Is the foundation allowed to ask them? or is that beyond their remit?

@sonya

All we can do is encourage more competition among miner manufacturers, like Josh said. We don’t have the power to do anything else.

That does nothing to address the underlying issue though. It is like forking to get rid of asics. you either keep doing it (creating new companies to sell asics that fall under the KYC limitis, or you give in.)
Remember they need to do this KYC for the IPO to prove sales figues, they are not fudging the books, etc. Can you give me one reason why a govt would not do this to any registered business under the guise of taxation?

Im not sure where this conversation goes either, but we need to start having it. If the foundation could press the company on this issues that would be nice.

@sonya

We’re certainly not going to advise that people do anything illegal!

Neither would I, but what is a crime in one country is not always a crime in another. This can be greatly exacerbated when money is involved. hence why we need zec. None of my suggestions so far have been illegal in the country I reside in.

@sonya

6 - Does the foundation consider KYC laws compatible with the privacy goals of zcash?

Only insofar as KYC laws prevent people’s control over their own financial lives. See the answer to #2.

Im not sure I understand this. I thought a primary usecase was I can spend some zec and no one (not really even the ledger, knows how much I hold. so unlike bitcoin I can spend z-trs and know my financial privacy is safe from govts (lets face it, it is already hidden from merchants - pki and all that) so if a govt knows I bought a machine that mines zcash. and it should have mined 3 zec in the time I have had it, and I only exchanged 1.5 zec at your favourite fiat to zec exchange. I now have no privacy, they could even correlate electrical bills like they do with some cannabis grow operations.

thanks

[bitcartel]

https://www.bitmain.com/jobs/623

Department : Engineering

Job Description

• Support in regard to the implementation of KYC/AML policies, AML-monitoring and sanction screening