Did Coinbase just become anti-censorship darlings?
Ohhhh, Coinbase is going to get a whole lot of brownie points for this statement!
Coinbase CEO, Brian Armstrong, just said he'd rather shut down the exchange's staking platform, than impose protocol-level censorship.
And if you just muttered: 'Christ, why does all of this language have to be so confusing!' under your breath, and got a sideways glance from the lady sitting next to you on the subway - you're not alone.
Here's what all of this means:
Last week, the U.S. government banned the use of Tornado Cash (the service that makes your crypto untraceable and easy to launder).
In reaction, it's expected that most crypto exchanges that don't want to end up in court, will stop accepting any coins/tokens that have been processed through the service.
Here's the issue: if you take $20 out of an ATM, and that bill was used in a drug deal ten years ago - you should still be able to spend it.
(Because you had nothing to do with it...right? Right!?)
Point is: marking and banning any cryptocurrency that has at any point been through Tornado Cash, is some hardcore financial censorship.
And it throws a huge spanner in the works with staking - where you hold a big pot of tokens and use it as collateral to process transactions on a crypto network (and collect transaction fees for doing so).
If you try and fake a transaction, you loose your pot of tokens. But if they're blacklisted and unusable anyway - who cares?
So, if Coinbase is faced with the decision to:
A) Comply and blacklist tokens
Or
B) Shut down their staking service
They're opting for B.
And this hypothetical act of non-compliance is winning them major brownie points with the crypto community.
