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Culture War Roundup for the week of April 22, 2024

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Dispatches from the War on Horny/Payment Processors: the other shoe has dropped for Pixiv.

A year and a half ago, Pixiv made signs that they'd be clamping down on content on some of their services to appease Visa and MasterCard. Today, Pixiv announces that US and UK users will face restrictions on content they can upload. (Specific details here.)

Currently remains to be seen how much this affects the Western artists who are on Pixiv, but it doesn't bode well. Some think this portends a coming era of digital pillarization, and while I won't rule out the possibility that things will get so walled off that VPNs become a necessity, it's hard to say how likely that actually is.

EDIT: This may be the rationale for the change.

This is the kind of problem that crypto currencies were meant to solve.

To elaborate:

  1. Cryptocurrencies are a bit like cash in that transactions are never reversed (I know it can be done, but its mostly not done). This is important when the products might be embarrassing and for digital goods which can't be fully "returned" once you have access.
  2. Cryptocurrencies do not have to actively endorse all the transactions that go through them. If a government doesn't like a transaction going through a traditional payment processor, they can lean on and pressure the people running that payment processor.
  3. Cryptocurrencies can have a degree of anonymity. Bitcoin doesn't have great anonymity, large-scale actors like government can figure out who owns specific wallet addresses. But personal anonymity is pretty easy compared to credit cards. Its not a payment to pornhub on your financial statement, its a payment to wallet [string of characters]. Which is often enough to hide from girlfriends/wives.

I'm not sure if I'm supposed to have sympathy for these websites/users, because the failure of traditional payment processors to handle this sort of thing was recognized and predicted before cryptocurrencies existed. When bitcoin/cryptocurrency was first released/invented it wasn't a bunch of people saying "oh look at this cool toy, we have no idea what its for, but it seems neat!" No, they were specifically saying "yay! we have solved this hard problem of digital payments that has been plaguing us for the last decade on the internet! These are the cool things we will now be able to do: [same list as above plus other things]."

For any kind of business that once needed cash to function: switch to crypto or die a slow death as payment processors leave you.

I think the bigger problem for shady companies switching to crypto is that they are going to have expenses they cannot pay in crypto, necessitating entities that will swap their crypto for fiat. These entities are almost certainly, if they do business in the US, required to abide by KYC and AML laws. Maybe randos looking at the blockchain don't know address X is Pornhub, or whatever, but whoever is changing Pornhub's crypto into dollars has a legal obligation to know. So the angle of attack can easily shift from payment processors to whoever is doing their currency exchange. Crypto is censorship proof as long as you only ever have to use crypto but that's not a sustainable state of affairs for most people or businesses.

These entities are almost certainly, if they do business in the US, required to abide by KYC and AML laws.

Wouldn't Pornhub (or whomever) and its affiliates be complying with AML rules if they did KYC on customers who pay via crypto? And therefore whatever crypto Pornhub uses to convert to fiat to pay its bills is clean? Or, at least, not their liability?

Yes. The problem isn't the Pornhub customers identity (although that is a general problem in crypto) it's that whoever is doing the crypto->fiat conversion for Pornhub needs to know who Pornhub is and so needs to at least tolerate their business. The benefits of being anonymous (or pseudonymous) when using crypto disappear once you need to turn the crypto into cash.

Yes, agreed. In fact, you probably have less anonymity when you use crypto given all of the KYC intersected with blockchain analytics.

(Yes yes I'm aware of Monero)