Bitcoin Forum

Is anybody else really disturbed by these recent quotes from our favorite mad economics reporter? 

He says bitcoins "can't be confiscated".  WTF?? 

e.g.:
http://www.youtube.com/watch?feature=player_detailpage&v=_t39jCXXIrY#t=312s

As it stands this is a large hanging bad omen on the community and seemingly an open invitation to rob Max for everything he's got.  I sure hope that doesn't happen, so please Max --  give the public some clarification on this issue?  Perhaps you mean to say it is more difficult to confiscate bitcoins than some other assets if the holder of the bitcoins has made certain precautions?   

I think he means that governments can't confiscate bitcoins the way they confiscate other property: by decree.

To confiscate =  To use one's authority to lay claim to and separate a possession from its holder. (https://en.wiktionary.org/wiki/confiscate)

So do you think that is accurate? 

Yes. And even Jon Matonis:
Bitcoin and the Rebirth of Financial Safe Havens
http://www.financialsense.com/contributors/jon-matonis/bitcoin-and-rebirth-of-financial-safe (http://www.financialsense.com/contributors/jon-matonis/bitcoin-and-rebirth-of-financial-safe)

edit: and this is one of the biggest reasons why I am a BTC believer

Yes. If he had said, "bitcoins can't be stolen" then it would be an error.

Max knows what's up. :)

same reason for me.  when we are old, there will be no social security net. 

It would be seriously difficult for a government to confiscate bitcoins.

First, you don't know who owns bitcoins.

Second, assuming you know someone owns some bitcoins and you want to take them from him, you need to scare him into giving you his password.  It's quite different than, say, confiscate a house.  Unless the owner is heavily armed, you can just basically take the house and kick the guy out.

Now sure, you can put the guy in jail until he gives his password away.  Or you can torture him.  But then you just make it clear that you're fascist.

Max Keiser is correct.

Governments would find it difficult to impossible to confiscate (or outlaw) bitcoins effectively. The reason is for every action governments might take bitcoins can be routed around. A government outlawing bitcoins would simply drive their use underground.

Regarding confiscation Max Keiser references Roosevelt confiscating gold in 1933:

http://en.wikipedia.org/wiki/Executive_Order_6102


There are several differences bitcoins would have from the above. First, gold or silver being tangible items could be argued to be natural resources. Governments often feel automatic authority/jurisdiction over such things. This along with the argument "hoarding of gold" was prolonging the depression probably seemed sufficient basis to push the action through.

For people not wanting to comply what were their options? The threat of men with guns showing up with metal detectors, and rewards for nosy neighbors was probably sufficient deterrent to try hiding large quantities of the physical stuff.

On the other hand bitcoins are obviously not natural resources nor tangible at all. One could literally hide/keep secret over 1 trillion dollars worth of value from the government in the form of a bitcoin brain wallet (https://en.bitcoin.it/wiki/Brainwallet), which of course is immune to metal detectors, satellite imagery, nosy neighbors or whatever other means governments might successfully employ to locate physical things.

That depends on how clever the bitcoin holders have been, doesn't it. 


No?  I think you have a better idea of some places to start looking than Roosevelt knew where to look for the gold. 


Yeah, and taking the house and kicking the guy out isn't facist?  And when did "making it clear you're facist" ever stop facism?  Or maybe what Max means is " you can't confiscate bitcoin unless you don't mind people knowing you are facist" ? 

You mention two differences between gold and bitcoin:  1) metal detectors  and  2) size (brainwallet / paper wallet)

These both will make it easier to hide your bitcoin stash than your gold stash if the browncoats come a knocking.

However nothing here prevents folks from trying to grab your coins.  Yeah, we could discuss the motivation of Roosevelt at that time (I don't fully understand) or the motivation of police today who confiscate thousands of coins worth of assets every day.  I sure hope it doesn't happen, but that discussion doesn't really matter:    Bitcoins will be, have been, and can be confiscated.   

Confiscation differs from theft in a sense that with confiscation, you don't have to try, you can just do it.   It's effortless.

Same author:

http://www.forbes.com/sites/jonmatonis/2012/09/12/key-disclosure-laws-can-be-used-to-confiscate-bitcoin-assets/

I'm not sure that's accurate.  Nothing is effortless.  Collecting gold was probably not such a walk in the park.  What fraction do historians think they got?   Confiscation of bitcoins could start out even more easily, by first grabbing every wallet.dat from online computers. 

Another possible difference between the two very similar words:  confiscation is when the powerful take from the powerless.  Theft is when the powerless take from the powerful. 

Bold emphasis mine. What you don't understand is what's most important. By confiscating gold Roosevelt effectively forced the market to prefer to use dollars instead of gold.

Using gold as money is superior to dollars in terms of guaranteed value. Gold has been valued by people for thousands of years and can't be easily counterfeited. That's not true of dollars (dollars are easily counterfeited by the Federal Reserve). So a free market if left on its own would probably choose to use gold (whatever is superior). Roosevelt took that option away from the market. He couldn't do that with Bitcoin.

 

Make sure you understand the definition of confiscation as opposed to theft:

confiscate - Take or seize (someone's property) with authority.

I'm not aware of any government seizing someone's bitcoins on authority, and even if so, certainly not on a large enough scale to influence a market.

It's like saying gold cannot be confiscated like bank balances.... yes and no.

Even if the US law could force one to "confess" his passwords (so the Miranda rights exist just in cops' telefilms?), since you can have as many wallets as you want, encrypt them in the way you want and store them wherever you want at zero cost, your BTC assets remain infinitely safer against any banana government endowed with metal detectors than gold/silver/anything else.

It is not innaccurate, there is no way to legally confiscate BTCs - you can also make it incredibly hard for them to find a way to take them by putting them in cloud storage for example...

They can't be confiscated.  Unless they figure out the code to my brain wallet...

Mind-reading devices aren't a thing yet, are they?

Actually it was.  They didn't go door to door and search houses for gold.

They said, "Go turn in all your gold for paper money by this day, or you're breaking the law."  And people did it.  There's no reason people couldn't have buried their gold in the back yard and traded it on the black market if they wanted to.  But just about everyone decided holding gold wasn't worth the risk.

Technically Max is wrong.  The government could declare that private ownership of bitcoins are illegal.  They could even offer to buy them from you and give you amnesty up to a given date so you're not deprived of property.

But effectively it's much more difficult to bitcoins than gold.  There was an article floating around a few weeks ago about someone who got busted smuggling a million dollars in gold across a border.  It would be trivial smuggle a million dollars in bitcoins out of the country.  You could just encrypt your wallet, email it to yourself, and then there's nothing for customs to seize as you flee the country to start life over in Sealand.

The spirit of what he said is accurate even if it's not 100% academically rigorous.

Makes you wonder who would give up their BTC if the government demanded they be confiscated.  ;D

I for one wouldn't.  But as far as you guys know, I have no Bitcoin.  I'm just here for the crazy philosophical threads.

True crypt hidden volume.

What bitcoins?

Bitcoins absolutely can be confiscated by a government the same way that Cyprus confiscated Euros.

The Euros were in the bank and Cyprus forced the bank to hand over the Euros which it controlled.

If you have Bitcoins in a "bank" (like MtGox or any service which actually holds the private keys themselves), then the government can force the "bank" to hand over the Bitcoins that are rightly owned by depositors.


Saying Bitcoins can't be confiscated is the equivalent of saying that USD/Euro/etc can't be confiscated when it is buried in a jar in a location that only you know about.

Exactly. Very important distinction.

Any bitcoins held in an online account with Mt. Gox, Coinbase, Tradehill, etc. are never more than a court order away from confiscation (or being frozen). No different than a bank account, paypal balance, etc.  - A much different scenario than having private keys properly secured offline.

Not just that.

Encryption + stenography + not telling anyone you own bitcoins =
safe from confiscation

The UK government is already doing this:

In the UK you will go to jail for astronomical noise (http://falkvinge.net/2012/07/12/in-the-uk-you-will-go-to-jail-not-just-for-encryption-but-for-astronomical-noise-too/).

When Satoshi returns to earth from the heavens, his first appearance will be before Max with a jar of Ritalin.

Free life-long food and accomodation? Sign me in! And if they put some booze, blow, bitches and parties in it I could even pay some Satoshis for that.
And password of what? One of the dozen of my empty wallets? Maybe if they torture me nicely I could give them one of those.

That's fine if you never want to spend the coins.  But if some confiscation went into effect you're now forced to do all your dealings on the black market even if your coins aren't actually confiscated.  Given that, I think if it went down like the gold confiscation, where the government actually gave you fair market value and sent the bitcoins to the Fed, many people would take the deal.

It's impossible to confiscate bitcoins if the private key remains secret.

Of course you can make bitcoin illegal, but that would only make it stronger.

The only way to pause bitcoin is to remove the whole internet.

About gold confiscation, I believe that the children of those who did not return the gold are today really REALLY rich.

Technically, it's true that brainwallet assets are immune to confiscation,
but if you're sitting in jail for contempt, where's the victory?

At least the coins will still be there when you are out ;)

They have to proove you own coins and if you do it right they can't. Again: nobody can proove you have bitcoins until you spend them, that's also why it's really really stupid to steal bitcoins, since you will get caught when you spend them!

So unless they change the legal system to "guilty until proven innocent" this can't happen.

How can someone prove you have coins when you spend them?

That someone is the one you send the bitcoins to.

Cant be 100% sure if this is true. What can be done right now or in years to come with Hypnosis is open to discussion. Legally is not a problem u dont remember a thing.