Re: [bitcoin-dev] BIPS proposal for implementing AML-KYC in bitcoin

[Milly Bitcoin <milly@bitcoins.info>]

>     So where is the solution? What to do?

AML-KYC is mostly something that sits on top of the Bitcoin protocol. 
Take Coinase, inc. as an example.  They check bank accounts before they 
open your account and they link your Bitcoin address to your account in 
their database.  Then they ask for an explanation of why you are using 
the account.  Then they track your coins to a certain extent once you 
actually buy Bitcoins.  None of these activities are directly involving 
the protocol or would require changes to the Bitcoin system.

What you can do is develop standards for using Bitcoin and entities that 
need to follow AML-KYC can choose to follow those standards if they want 
when they conduct business using Bitcoin.  You can add a small amount of 
extraneous data to transactions that could show you followed some 
AML-KYC procedure.  If you did that you could have a "white list" of 
complaint transactions rather than a "black list" of non-compliant 
transactions as you seem to be proposing.  I am not sure how you would 
actually do something like that or how it would work but it is an 
interesting concept (not necessarily good, but interesting).

Russ