Bitcoin Forum

This really worries me.

What chance does bitcoin have of long term survival if the governments can shut it down any day of the week?

http://glaws.in/2013/04/currency-of-the-year-bitcoins-gain-popularity-for-online-gaming-transactions-will-the-indian-government-regulate-and-prohibit-bitcoin-transactions/

they can make it illegal though

How would they enforce that exactly?

Well quite easy really... Just say it's illegal to trade in bitcoin. Shutdown Mt Gox, and all the other exchanges.

Clearly, they can't get rid of it entirely but they don't need to. Shutting down the exchanges would pretty much mean the end of bitcoin for the mainstream anyway.

How will they shutdown all of the exchanges in the entire world? Not to mention, there are several exchanges that are currently in development due to the events of the past 2 weeks.

In fact, this is similar to bittorrent sites. Governments all over the world have been trying hard to shutdown sites like Pirate Bay, and we all know how that turned out(Read: Still live and thriving).

Money laundering is already illegal. So they need to expand it's definition to include "participate in an distributed internet money laundery activity". It doesn't matter if your bitcoins are legally acquired and used. Some people use Bitcoin for money laundering, that is obscuring the proceeds of crime and by participating in the bitcoin network you are a contributory. Just like every bit that you send online is legal but participating in a torrent swarm is illegal. There is no constitutional right to financial privacy and if the law does not already cover Bitcoin they will expand it to cover it.

This means that you can't run an exchange, you can't wire money to an exchange abroad, you can't meet in a dark alley to trade bits for cash and you can't connect to the Bitcoin p2p internet network. All punishable by 2 to 5 in the fuck-me-in-the-ass prison.

Can they ban Bitcoin ? No, just as they can't ban drugs. People can still grow weed at home. It's just that no sane people will do business in that particular field of activity. We're just under the radar right now, that's all. They will come down on it like a ton of bricks when Bitcoin becomes more than a nuisance.

It's illegal to download music and movies in most places yet I can still do it in just a few moments.

Shutting down exchanges?  They will just move to friendlier countries.

Cheers

Owning, Spending, buying or selling bitcoins is NOT illegal. Exchanging them without knowing who you're exchanging to is, though.

This is a turning point in history and will be a wake up call. If one country decided to embrace Bitcoin and act as a backbone for the technology, it would be unstoppable and so would the country who chose to embrace it. It is a race for acceptance and a race for global dominance. Who will choose to let go of an old way of thinking? Only time will tell. Sure they could make it illegal in every country around the world. Though if one country decided to embrace it they could become the most wealthy country in the world in a very short period of time. This would also require the country to accept the idea of individual financial sovereignty and all the consequences involved. It will be interesting to see how this all plays out. Adapt or die, the cold hard truth of life on earth.

Yup, that's how they made drugs go away, don't you know?

No. If one country decided to embrace it would get sanctions imposed and be poor as shit in a very short period of time. (end up like Zimbabwe, north korea...)

At first, it is impossible to "ban" Bitcoin - the only thing government can do it to outlaw exchanges (I think they could do it right now even with existing AML laws, look at situation with Bitcoin-24 and Bitfloor) and make impossible to accept BTC for offline businesses. But they never will be able to close P2P exchanges, operating through TOR. Silkroad is an example.

Bitcoin may even go up in value because various organized criminals (narco mafia, gun traders etc) will threat Bitcoin as safe way to save funds from confiscation.

Silkroad works because of bitcoins. So you can do the cash or bank transfer legally, and receive the illegal goods. If Bitcoin in itself is deemed illegal, you need a legal "bitcoin2" to purchase bitcoins. Get it ? But of course they will ban all distributed online currencies in one swift blow.

They can do much more than close exchanges and local business. They can ban you to connect to the bitcoin network, just like they will SWAT your home if you share childporn on P2P. Tor, Truecrypt and paranoia for everybody, yay. They can put you in jail for meeting someone to trade bitcoins for cash, just like trading stolen creditcards numbers for cash is illegal. They can monitor your bank account and convict you of money-laundering if you send money to an entity abroad connected to the bitcoin trade; just like you can't wire money into PLO's account. They can tap you phone and convict you upon mentioning a bitcoin transfer.

In short, a prohibition like this would put an end to Bitcoin's use as a currency. Narco mafia doesn't need something that only the mafia uses, they want clean legal cash like everybody else, that's the whole point in money laundering. If all users of Bitcoins are criminals then you need another way to launder them. Bitcoin might survive prohibition as a mafia only currency, but that's hardly a reason to "invest" in it; especially given it's vulnerability to the "10$ wrench attack" when you try to sell it to these guys.

Sell cash on SR = get Bitcoins.
Sell Bitcoins on SR = get cash.

"Bitcoin2" not needed.

Child porn is considered unacceptable by 99.999999% of population, while Bitcoin, TOR, TrueCrypt and spirit of freedom at all is essential values for large part of population. If governments and corporations will pressure too hard, some people will resist physically, even risking with their lives! Very high probability that this prohibition could start civil war!

not true. A minority of people would fight to defend Tor, and lots less for Bitcoins. 99.99999% of world population could not care less.

I don't think any country is willing to embrace a money it can not collect taxes on. It would be financial suicide.

Well, so is inflation, but that's at least a slower form of suicide, and you get to enjoy the ride.

We're talking about the leeway government has in this problem and the whole "Bitcoin is indestructible" mantra. So if for the sake of argument the law is presumed passed , it's irrelevant if people at large see you as bad as a pedophile, the penalty is the same and that's what the SWAT team and the judge care about. As to how such a law against cryptocurrency could came to pass, let me just say your internet money is very low on the priority list of the vast majority of citizens. The law would be written by lobbyists, passed by a large majority, and wouldn't make it even on the evening's news. No civil war will ensue, I can assure you of that; I lost all hope in humanity after CISPA.


That's like saying Silkroad could work even without bitcoins, people could mail each other cash and the site would keep track of the accounts. That won't work because if I'm a drug dealer with a stash of 10 pounds, I will never ever type my address anywhere in order to receive a cash envelope. If the whole bitcoin seller's market is composed of criminals I can't blend among regular people and a sting operation when selling my bitcoins will lead straight to my stash.

GO SEALAND! ;)

Uh... you know you can buy cash with bitcoins on SR now, right? BMR, too.

Yes, but you aren't a criminal and your bitcoins are legal, that's why you have no problem giving an address to receive cash. A drug distributor would not sell his drug earned bitcoins for cash, especially if bitcoin trade is illegal too. Double whammy in the slammer.

By definition, if I sell my bitcoins for cash anonymously, I am a criminal.

https://en.wikipedia.org/wiki/Bitcoin#FinCEN_regulation

What will we do if the government bans the sale of drugs in exchange for bitcoins?

I think they already did that.

Forget about taxes and centralized government, think about individual sovereignty and collective groups of like minded thinkers who care of nothing more than eliminating traditional forms of government. When I say a "country" I mean a collective group of people outside the box we call "our country", country is just the best way I could explain my point of view. it wouldn't take much for a group of people to scrap an old way of thinking and experiment with something new, especially if they are already in a state of chaos and disarray. The direction we are headed could easily lead to a virtual economy, government, and social structure. These are the building blocks for someone to declare independence from any traditional "country".

Now.. THAT could lead to tanks in the street and civil war.

If you haven't yet, you might enjoy reading this:
https://en.wikipedia.org/wiki/The_Diamond_Age

(btw, the word you're looking for is "phyle")

My worry exactly, but this is what decentralization is. While I don't really want to see this happen this is the direction we are headed. And getting into decentralized currency is really the only choice anyone has. Sure you could stay behind in a horse and buggy and let criminals fly by in a hovercraft but... I think this is why decentralized technology is such an event horizon for the global financial system.

We are experiencing a blind spot when trying to predict the future. Every blind spot throughout history has brewed innovation, terror, change, and prosperity (well for some anyway, someone always suffers). While bitcoin is simply just a digital commodity that is freely tradable, it is the seed for what is to come. Be that good or bad. The massive speculation due to the uncertainty is a dead giveaway about a massive shift in our way of life on a global scale.
 

In my opinion it will be exceedingly important for everyone with a positive outlook to get on board with decentralized wealth building and try to stave off a coming chaotic occurrence. It is a race to the top and a battle between good and evil, just in an unexpected and abrupt way. Hopefully enough people realize that prohibition only empowers criminals. Embracing this technology on a massive scale is the only option, if we don't we are only bowing down to the new rich and elite criminal class. I for one hope everyone understands this fact. Prohibition has never worked.

Sure, I guess we could head the route the "preppers" "know" we are headed and shut down everything. Allow a total economic meltdown and kill the internet all together. Sure this is possible, though its only a matter of time before we experience the same scenario all over again. To allow economic collapse is the same as running from your problems. Eventually your problems catch up to you and they are worse than if you dealt with them when they presented themselves.

Just some food for thought. after all that's what bitcoin is, food for thought. Otherwise no one would debate about it like they do.

Plus, a big big problem with confiscating it...

Oh nos...then I guess Silk Road was shut down?

Um... no....

But these places already exist. These social experiments have been going on for decades if not longer. If you want your own island outside the box you could have it. Problem is, so far noone got it to actually work. I think these things usually break down because of social problems. Funny thing for groups of likeminded people, don't you think?

Also remember that there are no shops where you can buy computers or other electric devices outside of the box of countries.
So no virtual anything actually. Well, virtual computers, if you like. That is the consequence of living outside the box. Good luck.

lol I hear its easier to out law gold. If they do your bitcoins will be more expensive and it will go underground. Governments hate underground economies. They're better off infiltrating it through taxes.

Then they would have to outlaw cash. Cats out of the bag now.

I don't mean to sound offensive, but your still thinking inside the box, the box I am referring to is metaphorical without boundaries. I never said start my own country on my own island. I am talking about right in your back yard, your neighbors backyard, Africa, Russia, second life . I am merely implying that this is a seed that has been planted. Prudence, understanding, and an open mind is imperative. These are valid issues if decentralization continues in this direction.

I want a debate, I want a full out global discussion, lets get dirty here and quit pretending like nothing will change. Macro economics is an ever evolving beast and it just grew a third arm. I think a drawn out discussion is in order, not to mention full implementation of this technology on a global scale is inevitable. Pretending like it is not an issue or wont get to this point is a blatant lack of prudence and understanding of what is actually happening.

The following post shoots for the stars much like I am guilty of doing quite often. However, I think it is a valid concern and a large stick in the spokes that has yet to throw us off course (For lack of a better term). 

http://lifeboat.com/blog/2013/04/bitcoins-dystopian-future

Pretty sure that was sarcasm...

And you had to go and ruin the joke. ;)

It is possible that Bitcoin is made illegal. They made online gambling illegal in the so called Land of the Free (which does not make sense at all, by the way). They can do the same with Bitcoin.

The only thing we have on our side is the fact that governments move very slowly, and in fact quite predictably. We'll get a warning beforehand.

When they make Bitcoin illegal, only criminals will use bitcoin. Then we'll have an actual real assessment how much the Bitcoin economy is worth.

outlaws* ;)

It will be big with Agorists.

no worries, doesn't matter if they ban, (the ban woth be effective, people will still be buying bitcoin in that country...) and anyway most governments don't mind bitcoin. its legit big business, what's not to love!

It wouldn't be difficult to do enough to discourage 95% of the poopulation from using bitcoin. Scare campaign plus a few high profile busts should be enough. Shit, some miners have been raided already because the cops thought they were running grow ops. If mining was illegal they should be able to catch a few.

And a bunch of gambling sites still accepting U.S. players. This ban never be effective!

I keep hearing this, and it is wrong. Governments can invent and levy taxes even in a Bitcoin economy.

Taxes on electricity from the grid, mains water, land and buildings could be levied at a higher rate instead of retaining an income tax. Consider vehicle taxes. Anyone who wants to use a car on a public road has to tax it (in most countries). That tax could be raised 1000%. Taxes could still be levied on petroleum products. Oil majors would not be able to hide how much petrol and diesel was sold at the pump each year.
Governments could levy 100 BTC to renew a passport. There are many methods to extract money from the people. Bitcoin just changes the focus of taxation, and probably makes it far simpler, making obsolete great swathes of crap tax law.

I used to gamble semi-professionally. The ban had an enormous impact on US players and a substantial impact on the part of the industry that was US-facing. Few if any credible European books still accept US players and many "offshore" (caribbean)  books folded. The ones that survived are much less generous than they used to be. Goodbye bonus, hello $100 withdrawal fee.

The impact on the bitcoin price would be greater because the average gambler is more dedicated than the average bitcoiner. The current price is supported by the flood of money coming in from Joe Average who has heard about the spectacular price rise and wants a piece of the action. A ban will mean that flood stops.

It also makes avoiding those taxes by using black/gray markets dead simple.

If all else fails, there's still taxes on land and buildings.

True. But when it is impossible for them to freeze or seize your funds, flipping them the bird on property taxes is easier, too.

Not "easy," mind... just easier.

Think about it, that already exists. It is called cash. You can pay a plumber in cash (at a reduced rate) while he avoids declaring it. An easy win-win. But most people are not comfortable doing that all the time.

But more importantly there are essential services which are obtainable only through large companies or government departments. Electricity, for example. Unless your house is off-grid you will have to pay the electric co in bitcoin, which they will have to declare to government revenue inspectors. So, it is easy for government to levy a percentage tax on all electricity bills.

You are right. BTW I already see the same approach in Latvia. Our govt have set insanely high income taxes (25% flat rate, almost no deductions, high social security tax resulting >50% of salary goes to the govt), which forced many people to work unofficially (receive salary in cash and don't pay taxes at all). To get funds in budget they introduce many new indirect taxes and raise existing which is almost impossible to evade (land, real estate, cars, fuel, even 21% tax on all cross-border parcels from online shops). Now they even plan to force all unemployed to pay compulsory fixed sum "healtcare tax" (govt think these people have unofficial job, however real unemployment in Latvia is more than 20%).

That's what ya might call "incentive to innovate." ;)

That is why government hate cash and love digital currency. cash is 100% anonymous, digital 100% traceable every single penny of it.
There is no question a state coin will come and u can pay taxes, go shopping, pay util bills....... and receive your pay with it too because it is the only gov. sanctioned legal tender. To what extent other currency's (btc,ltc...) are allowed to run in parallel is up to the individual country. trouble is every time u change back and forth u have exchange rate to worry about so the fast majority wont bother.
Scandinavian countries right now are looking for ways to outlaw cash, cryptos are a god sent aid in implementing this next step of total control.  

I made a post about Phyles and Bitcoin back in the newb-section but nobody cared. In any case, here it is:

https://bitcointalk.org/index.php?topic=153644.0

I think the combination of Phyles and Bitcoin is a really potent concept.

I've been reading this page.

"For our first thought experiment, let’s imagine a world where distributed currencies like bitcoin have become wildly successful due to technological advances which make them easy to use and completely stable. In this world government-issued money is as good as dead."

This is a false premise because to get to the technological level he describes you would need a functional fiat economy to drive the technological developments.
Besides that, bitcoin is very expensive energy wise. If fiat fails most of our society will fail.
There will be no electricity, no computers in the shops, no high bandwidth internet etc. All of our fancy networked society will break down if fiat breks down.
Bitcoin would become lame in such a situation.
So this whole premise is irrelevant as it could not exist.

Basically his whole argument is that if too many people go into bitcoin it will crash fiat so you better get into bitcoin.
He is just trying to scare people with brainfarts.

If you dare, please explain to me how bitcoin could ever survive a breakage of fiat and its related services that are needed for bitcoin.
Where do you get the electricity from?
Where do you get the fat internet from to download the block chain?
Where do you get a computer from?
How could i use bitcoin to buy food when fiat has broken?
I mean, will mobile phones still work in a broken fiat economy? Would i be able to go to a store and buy food with bitcoin on my phone if fiat is dysfunctional?
And if not, then what use is bitcoin to me in asuch a situation?
Who will provide the fiat services to run bitcoin on when the fiat economy is broken?
The reality is that as soon as fiat realy breaks down our whole society will fail and there will be complete chaos.
There will be no electricity (unless you make your own)
There will be no food (unless you make your own)
There will be no technology (unless you make your own).
Noone will be so out of his mind to even think of bitcoin when society has failed.
Bitcoin would become meaningless in a world without fiat.

They can make local exchangers illegal to slow BTC but they can't make BTC illegal

You'd be surprised just how much of a majority enjoy social conformity and the grass eating. Like someone else here said "most people couldn't care less if governments declare crypto currency illegal" . The vast majority will complain that prices are going up, that life is getting harder, but when you offer them a path to Liberty they reject it and would rather remain in the delusional comfort of the system.

Can someone explain, in small, grampa-compatible words, why is bitcoin un-taxeable?

I mean, I am an old, possibly senile, Canadian, and maybe I am missing something big, but... I recieve payment to single-use addresses, but I pay my gas, my taxes, my food, and pretty much everything else in fiat, so I exchange btc > fiat (and since I want money to go to my bank account, I do that in my very own name)

Obviously, government can detect income at this point, and tax me (also possibly audit me because I have this very strange income structure going)

Even if I could buy stuff with BTC, if I want to stay below tax radar, I would only be able to buy small-time stuff, like groceries and occasional small items, because as soon as I buy something huge (like a house) with my undeclared BTC riches, tax folks can come down on me like a blivet, right ?

So... where does the "cannot be taxed" idea come from, again?

How is getting BTC different from getting small-denomination worn cash?

Give me your bitcoins.

See, if it were dollars, I could just reach into your bank account or your mattress, or wherever you keep them, and take them. Can't do that with bitcoins.

Yes, taxes can be levied on BTC, you can even pay them. But it's voluntary.

That changes the whole game.

Torrents are illegal, Have you seen how easily they got shutdown? Oh wait... They CANT shut them down without some extreme shit that'll come from SOPA/PIPA/ACTA/CISPA.

Most entrepreneurs will fight against this crypto ban because strong cryptography (SSL, VPN, disk encryption etc) is essential now for any business.

As Bitcoin grows, it will surely become a political weapon. There's no reason to think every country would follow Canada or India. Couldn't you imagine ideologically opposed parts of the seeing value in something another rejects?

I'm not even sure that it can be effectively outlawed.

That's just out of practicality.

Anyone who possesses your private key has your coins.
So its more like bitcoin gives you a very strong box for holding your value and gives you a key.
This key can be taken from you and you could lose it.

Yes, in that it's impractical to calculate between now and the heat death of the universe to get a 50% chance of guessing the right private key.

I am confident in my hiding abilities - despite advanced age, I am still capable of concealing smallish items beyond most people's (and I would be willing to claim, police's) ability to find them.

However, I am also confident in government's ability to facilitate cooperation on fund recovery, so I don't see why government couldn't be very convincing about handing over the private keys to undeclared btc.

Full disclosure: I intend to pay taxes on my profits from wallet.is

they can also make the internet illegal

it would "stop" many bad things yup yup yup.

Sounds a bit familiar no?

Oh certainly. Quite convincing. But at least the gun is out on the table, for all to see.

Back in the good old schooldays, a teacher told us that the core distinguishing feature of a government is a monopoly, or near-monopoly, on violence.

So I don't think govenment is going to be shy about using violence to procure stuff that it "thinks" belongs to it.

Also, even if they fail to procure the keys, they could still send one to jail for tax offenses (and possibly a lot of bla-bla bla in regards to "transaction structuring" and whatnot)

Bitcoin is, essentially, equivalent to an unbreakable safe.

It can protect your wealth from forced seizure (to a fairly large extent), but not from taxation per se.

Precisely. But when/if everyone has the viable option of saying "make me" when the government says "pay up," that's going to make the government's job a great deal more difficult.

Just like would be the case if i hid my coins and encrypted the location...

In both cases the only protection is a piece of information that exists somewhere.
And someone could steal the information.

If they don't have your key then they cannot prove you own the coins.
If they cannot prove you own the coins then they cannot send you to jail for tax offense.

https://en.bitcoin.it/wiki/Brainwallet

We can't compare downloading movies and music with currencies. Banks make wars. Controlling money is there bread and butter.

If they make BTC illegal in just a few countries it goes underground. If that happens it will be hard to sustain any kind of price.

It isn't that governments can end bitcoin, but for it to be viable we have to be able to spend it. If it is illegal, where are we going to spend it?

I'm all about BTC and what it stands for but we have to hope that currencies continue to crash. If that happens then the people will will BTC into being another currency.
If we stay in between for too long, they will attack us. Luckily, their currencies are collapsing all over the globe. We have a chance. We have God on our side...

Exactly. The thing we will always have on our side though, is the incredibly small float.

Right now and for the next few months I think we are ok. In that time the Sh*T may hit the fan with many currencies all over the globe though.
If that happens, we will probably be ok. If we aren't ok, we have bigger things to worry about.

The good news is that we don't yet have "the" government. Instead, there are a few hundred of them.

People can, will, and do right now sell cash on .onion sites for Bitcoins. All making Bitcoin illegal will do is move all the exchanges into onionspace.

Where do we spend it? It would become a person to person exchange if possible.

Spend what, the cash? Wherever you want.

If you mean the bitcoins, well, those sites usually have a large number of options for you to spend your bitcoins on....

Again, I'm a bitcoin fan. But it will not be good if it becomes illegal. (Which sounds crazy but that is the world we live in.) Trading them is one thing. But do you think someone is going to risk getting thrown in jail using an illegal currency? (Again that just sounds so crazy.)

I don't think we are close to making it illegal, that would really suck.

Can you prove that I have ever "used" a bitcoin?

Sure could. Most Western countries now have laws requiring you to hand over the keys to any encrypted data (http://en.wikipedia.org/wiki/Key_disclosure_law) the cops want to look at.

Sure. But do they get the key to all your riches, or a mostly empty show wallet? How would they know the difference?

The thing is, this goes for any information, like the location of my pirate treassure...
And in some ways information is hard to contain, even harder than physical keys.

If bitcoin owners as whole paid their taxes then the gov. would be reluctant to shutdown it down. They are not going to give up any source of money regardless. If you could use bitcoins to fund stocks and commodity trading that will give the government an even more reason to keep bitcoins legit.

So...does Bitcoin really need to go begging at the governments heel for permission to exist? Nah...stand tall and proud and defy the statist sociopaths I say. Don't provoke the beast needlessly though, a dinosaur in its death throes can be dangerous in its thrashing around  ;D

Fincen is your Friend and Mtgox et al will never be shut down.This is the dream that will never come true...
We will see if coinlab gets all the licenses to be able to trade bitcoins by mid may. If there are further delays, one should prepare for the war..