Bitcoin Forum

A serious question.




Major investors and many people have been making predictions about bitcoin rising to 40,000 USD per coin.


Going by recent figures, that would mean the total market size of crypto economy will rise to half a trillion dollars.


That's easily more than half of several top 20 economies in the world. Around near 13% of annual US federal budget.




And it's supposed to be decentralized, anti-government.




Is there really a realistic possibility that a market of such size can exist without either 1. some form of governmental oversight/regulation, or 2. going fully underground as an illegal form of black economy?



Only recently a national government acted to shut down a significant portion of crypto economy. That's only when BTC reached 1200 USD. What do you think governments will do when they figure such a significant market is trying to become a national economy in its own right?


Realistic discussions please. How can crypto survive to reach the level many people want to see? Remember, nothing is particularly fool-proof. What has been made can be unmade. Nothing is absolute.


How can this work?


Discuss.

The question is not whether governments will allow a $X bitcoin economy, the question is whether Bitcoin will allow oversized governments to exist and retain the kind of power they currently do.

....and we have the first jap-anime inclined fool chiming in with deluded sense of 'power' they hold.

Why don't you go hang in chinese and russian government custody with the weaboo kiddy snowden and find out life doesn't work out like a shounen manga/comic?


REALISTIC discussions.

Well governments around the world allow Google which has near 350 billion market cap so yes, why not?

Except that crypto doesn't want such government interference as those imposed on transnational companies such as google.

Main conflict here is that governments are only willing allow things to grow if they get a slice of the action and is ultimately in control. What, does crypto have a standing army?

Its a distributed system. Bitcoin runs on TCP/IP and there will be always smart ways to prevent blocks. Do you think the government will shutdown the internet? US government is trying. Read about the new CISPA bill.

Don't be obtuse. The US government is not trying to shut down the Internet. Regulation is not the same as shutting down.

LOL as if they have a say in the matter. Hilarious :D

Instead of calling contributors to your thread fools, why don't you go study history and quote 1 example of a power being successful in stopping the adoption of a technology they did not like?

Even now they are doing everything they can to destroy Bitcoin. JP Morgan even tried to patent the technology. But the truth is that they are currently powerless to do so.

Depends

If the market becomes large enough, there might be a serious need for more regulation in order to prevent fraud and give every investor an equal hand, in which case there would be nothing any of the coins could do to stop such regulation if the government insisted. Sure, you could argue all you want, but most people would jump on the chance to have more secure investment opportunities and to prevent against frauds and scams that seem to pop up weekly with Crypto coins. 

We haven't had an attempt to stop bitcoin, and in my opinion, we won't see one.

Governments taking precautions and evaluating measures in the form of regulations or likely only temporary distance are not inherently aggressive maneuvers.  Not sure why they're seen in that light.  

It has the potential of becoming heavily adopted internationally, and can be of great benefit to many individual nation states.  It is in the best interests of any one country then, especially the powerful, to not make a detrimental long-term negative move.  In the same light, a similar positive move may be a bit premature.  If all the powerful governments could figure out a way to band together and put up a economical wall against the nation states who have every incentive to adopt bitcoin, then perhaps they would do so.  Unfortunately, that is not at all realistic or likely, not only because said countries are battling for supremacy against each other, but also given the intense rate of adoption.

So in that light, no, there's nothing governments can do.  They can play along, not play along and turn a blind eye, or not play along and expend policing on an inevitable underground market.

The people have spoken, many countries, understandably, are hugely in favor of it.  The fact that the powerful are so bent on power is part of bitcoins anti-fragility.  If the powerful don't want to experience even a slight tip in the scales, which they won't, then they simply have to find a way to mesh the old with the new.

I don't think we can have any sort of civilized discussion if you are going to insult people.

Ultimately, yes.

(note: I just read the title of this thread)

And that wraps up this thread.

ROFL

Anyway.. no, governments won't allow it, they will try to extort as much as they can from people to retain their power.
This is just the beginning, they are trying to understand if they can make some money out of it before killing it.
The only problem with this is that cryptos are decentralized which not even a censorship can stop

you noob Honeypot, haven't you ever heard of Bittorrent? Thanks to Bitcoin being released open source that is exactly what will happen in the future, it will be a never ending game of whack-a-mole anyone who is in the Bitcoin business will simply have servers etc. in Bitcoin friendly countries that the governments can't invade easily.

Why do so many people view governments (aka "they") as monolithic, organized, single purpose organizations? The truth is that governments are just a bunch of fallible human beings.  The current system is working for these individuals, so they support it.  But if they see a credible threat, they will hedge (buy bitcoin in private), and if the see a sinking ship, they will jump.  


WHAT THE OP ASSUMED: governments will fight to maintain their power

WHAT HE SHOULD HAVE ASSUMED: individuals in government will fight to grow their power


OP, if you re-run your analysis assuming that individuals in government will look after their own self-interest and that of those closest to them, does this change the game-theory outcome?  

The way I see it is that once bitcoin is a credible threat, individuals in governments will hedge.  Those that hedged early will see they have more to gain by allowing bitcoin to win than by supporting the collapsing status quo.  They will tow the party line in public, but act in private in ways the stealthily support bitcoin.  

Excellent point.  :D
You are absolutely right my friend.

governments are there to serve the people, not the other way around.

Do we really allow a handful of people to decide what the rest of the world should do?

Do we?

That's what we are doing in the majority of countries.

Yes, excellent. Neither Gold nor Gold 2.0 will disappear as long as the civilization doesn't. It is the state that always disappeared, together with its debt. The history of the state is the history of failed states. If Bitcoin will destroy all states (and it has the potential to do it) Bitcoin and Gold will be obsolete, as it has been in pre-state epoches of humankind. Humans beyond the state live(ed) in self-sufficient communities without Gold, without money, without a market.

You probably mean what the people controlling the government (bankers) will do.
They will do everything they can to hold on to their power.
Would you willingly give away your bread and butter for the "better" of humanity?
I think not.

No, but you may give away your bread & butter for steak & lobster.  Those in power can leverage bitcoin for their individual benefit too. 

Those in power are already controlling the entire planet.
They can produce endless amount of money at will.
Bitcoin with its limiting factors does fit well into current setup.
If anything, it will be limiting their ability to manipulate the system.

Last time I checked my government was still fighting a pointless and utterly futile war on drugs (estimated $1 trillion spent in the last 40 years excluded the oppertunity cost).
Last time I checked people still grew, smoked, consumed, bought, sold, transported and generally used those things the government doesn't want them to.
Someone interesting the estimated value of the global drug trade is pretty close to your headline number ... $321 billion USD annually.

Note this doesn't mean I advocate a war between crypto-currencies and global governments.  Bitcoin will "bootstrap" much faster if it can springboard off the existing financial system.  The point is that it doesn't really matter what governments want to do, it is what they are capable of doing.  Governments are generally able to attack centralized institutions (like other governments, companies, singular leaders, etc) rather well but they tend to be rather inept at killing decentralized global networks even when they waste forty years and a trillion dollars trying to do it.

They don't need to spend any money to stop bitcoin replacing fiat in the long-run. They just make a new law saying any ISP suspected of allowing bitcoin related traffic will be shut down. Bitcoin would then truly only be a currency for 'criminals', the price would crash and mass adoption would be almost impossible.

In fact, IMO this is virtual currency's only possible future other than completely replacing all fiat currencies.

The forum needs a "Concern Trolling" section where threads like this can be moved.

Agreed.  It is important to remember that the introduction of Bitcoin in 2009 was as a result of the epic failure of our governments and banks worldwide in 2008.  If the people employed to run our government offices/departments are unable or unqualified to do so, then what justification would they have in interfering with a solution (provided by a brilliant mind) to the mess they allowed to happen.  They should concern themselves less with Bitcoin and other fun things "the people" do with their time, and focus more on the jobs they are employed to do "cleaning the sewers" , "fixing roads" , "building schools".  They have shown they (the current generation of leaders) are completely incapable of running the finances of the countries they are responsible for.  It is entirely laughable that they should want to be involved in anyway with Bitcoin, why would we want them to screw this up to?  I say "get back to work" and stop worrying about things that do not concern you.

The one world government?  A government may do that and innovation and technology will simply flow to where governments are more realistic in their regulation.   I don't think cryptocurrencies will replace national fiat but they will coexist.  The genie can't be put back into the bottle.  Stilll the global money supply is on the order of $75T (M2) so even if Bitcoin grew to support a $500B money supply (the number from the OP), it is a rounding error and thus hardly is a danger that it will replace all national currencies.

Let's take a look at the bolded statement here.   Historically you are 100% wrong.  What actually happens to the price when the gov makes something the public wants illegal (alcohol, pot, gold, etc.)?

Another tinfoil hat wearing paranoid delusional fool.

True, it is decentralized but anti-government?

YOU may be but bitcoin is a protocol, not a semi-mythical power.  If the government you speak of tax bitcoin, own bitcoin or even start to mine bitcoin it will not become self aware and fight back.

Get a grip.

Ahh the oil industry, always looking to find the next thing to replace oil, and make sure it never gets out of the laboratory.

Good find though.

Now lets rephrase the question to actually suite bitcoin: (this is like trying to stop the internet, or bittorrent)


To OP, you shouldn't shoot down contributors to your thread... out of principle I shouldn't reply by here is my 2 cents,

You can't ban or regulate bitcoin. Thats impossible, in order to regulate bitcoin, you would actually have to change the code and consensus would have to be achieved. (since no-one likes taxes no-one would vote yes for tax regulation into bitcoin, per example)
You can attempt to ban it... You can actually become quite successful at this... However go ask in China, Iran, Egypt, Syria to name a few, whether you can truly ban something on the internet, making it impossible for anyone to access.

You should already know the answer to that, we wouldn't have heard about either the things in Egypt or Syria without it.

So allow... they don't have a choice, they can speed it up, or delay it. The only way however that they will stop Bitcoin reaching 500 Billion market cap is by inventing something that is even better. (though luck after the financial industry has been sitting on their ass and not innovating for 50+ years. -- Andreas Antonopolous has great comments on this, (innovating with and without permission) google his talks on conferences --

And after all that, as a group of governments it has no benefit to them, and the banks will beg them to put a stop to it. However, if you look from the point of any individual government, excluding the US, you see a foreign reserve currency that no-one controls, opposed to a foreign reserve currency that is being controlled by a government, a competitor. (if I may call it so) Since its obvious no-one trusts a foreign government, everyone is looking at this non-government controlled currency and is thinking... How much shit will I get for jumping in first... And how big will be benefits be... And currently this is being weighed in a good 50 nations (the other 100+ not being fully aware yet... but will be soon and weighing the same thing)
Where does this put us... We need to keep pushing our governments... to accept. The only unknown in this whole story is the US government... Will they voluntarily give up their place at the top of the food chain... I don't expect so... On the other hand what are they going to do... Go to war with the rest of the world all at once? (Note, Canada & Australia are looking pretty positive towards bitcoin, so does Germany, Switserland & East Europe, haven't heard much in the south of Europe about it yet, but kinda expecting it to be a boom there too, since they are having all those issues in Greece, Italy and Spain / Portugal) Then you have the unknown in here, which is China, will they remain neutral, side with the US or side with the rest of the world... Personally I'm expecting China will do whatever they can to piss off the US.

Either way, the next 5 years are going to be very rough, and a lot of things are going to happen very rapidly. Hopefully in 5 years everything will have quieted down again and we live in a better world.

Nice post Mylon.

government is just a stupid idea in peoples minds, bitcoin however is real

definitely deluded. whether BTC makes big leaps depends on whether government wants to control it. the ball is in their court, not BTC's.. unless you are deluded.

It will be interesting to see how this all plays out. The community can brainstorm ways to defeat bitcoin through regulation in order to figure out ways to circumvent it quickly when it happens because there is little chance of bitcoin being allowed to evolve without interference.

However, I think the crypto cat is already out of the bag and it isn't going back in. You say that what is made can be unmade, but I disagree: what has been invented cannot be uninvented.

As Nassim Taleb said a while back the thing that kills bitcoin is a lack of publicity. If it continues to grow in the public mind, it will be a case of adapt or die. So far, so good.

The regular punter is frightened about regulating bitcoin out of existence (and so far the Chinese have put a dampener on the market by doing so) but like bittorrents we all know it cant be eradicated completely, and the brightest minds seem to think the protocol is the basis for the major disruption, not the bitcoin currency itself.

Knowing this, it's a cat and mouse game: the compromised financial sector is nervous but they no doubt see the potential for profit. Governments will want to maintain control & their tax revenue. But, regulate it and risk a whole sector moving to friendlier areas.

Imagine Greece set up a bitcoin friendly financial environment. Jobs, boost to local economy and potential for longer term economic benefits if bitcoins grows further. Better than what they are now.

Government is in desperate need of bitcoin to save them from a total financial collapse 8)

Thats a stupid argument, i adresses it several times. Gold banned? Where? Global: Hardly, Locally, maybe... did you see any GREAT swing in price of gold due ot ban? No, maybe swing downwards yes...

About the other two, yeah, but these are substances that make you feel good, you can try to ban these things but because it GIVES something to you, youll never trully ban it, its like hookers :-), if a simple holding and using bitcoin makes you "feel good" then you are weird... :-).

Ig bitcoin is banned by gov. the majority wouldnt give a fuc* and risk some problems due to some stupid virtual money... Belive me that. There would have to be serious financial economical issues globally to encourage people having problems with gov. simply by using bitcoin. You didnt realize that??

Yeah, this is a nice post, didnt consider that the gov. might like a currency which is "noones" so nobody will manipulate with it, this is good argument, didnt thought about it before, nice thought. On the othewr  hand, having a currency that cannot be manipulated is good, but having the currency that i can manipulate is even better... If you are strong, why settle for consensus...why benefit all, when i can benefit only me with greater role/power (sure this is option only for a strong state as russia, usa or china but still is better for them. If you have power... go share it (you wouldnt, states wouldnt)... if you are weak (small states) you would accept the offer, if you are strong (usa, russia, china) you would reject it.).

The first part is nonse however, because govs can really simply ban bitcoin by banning all the bussiness that accept it.. if no normal bussines (grocery, electronic, housing, energy, transport etc. etc. etc.) accept it, the price CRASHES= bitcoin is dead. (using it only in the black market wont save it). Decentralization is worthless argument here.

The US government criminalized private ownership of gold.  Read up on Executive order 6102.  Residents could sell gold to the government at the official exchange rate of $20.67 per ounce or face fines  and up to 5 years in prison.  Less than a year later the US government changed the fixed exchange rate for gold from $20.67 to $35 per ounce.   Those that held (and millions violated the law) saw the value of their gold almost double in a year.  


Once again what government?  The terran overlord government which runs the single police state for all citizens of earth?   Millions of people violated the US ban on gold.  A ban by one government wouldn't wipe out Bitcoin, there are 270 nations on earth.   Unlike gold Bitcoin has deniability.  Pretty easy to claim you lost the wallet.  Prove I have Bitcoins.   People in the US risked hiding an easily discoverable and tangible object even when the US government offered to pay them cash for it.   The idea of hiding a highly intangible, deniable set of numbers which can be encrypted seems a smaller leap doesn't it?

And if this happens how do you think people will react?
This is not a game for nerds anymore, there are serious money invested, serious businesses in the industry and global visibility thanks to internet.

sorry but no, people wouldnt care... omg people get real, do you think that the majority of people would "riot" due to some crypto currency (ban)... you cant be serious, a lot of people arent even sure what inflation is, and you expect that they would "fight back" againts gov. ban on bitcoin... really... sorry but thats naive.

Yeah i know about that gold ban, but this isnt the same even a little, your point is misleading.
There wont be even any consfication of bitcoin, simply Ban the retailers from accepting it, and you have it, do you have your coins, yes, what can you buy for them - nothing.
omg it has been adresses so many times, its so tiring.

BTW i think people should in advance of their post write down their IQ, education (yeah thats not that important, but still), age and job, to give a signal if its worth reading and discussing.

As somebody stated, you are not entitled to your opinion, you are entitled to your INFORMED opinion.

It's really quite amazing when you think about bitcoin like that.  

256 bits to unlock the treasures of the world.

Not everybody is as deficient in imagination as you.

Soon enough we'll be able to use Bitcoins to obtain products and services from virtually all normal businesses whether or not they accept it.

Everyone is right to be concerned about the sinister intent of those in power in the United States. Of course if bitcoin threatens their power they would want to stop it. However, the Constitution is the supreme law of the land and it does not give the government the power to ban bitcoin. Yes, the the government does have a long history of violating the Constitution, but when it does so, it does so secretly or in the name of national security. Another fact about the U.S. government is that it is usually very slow to act. That is why the present moment is extremely important. It is critical that awareness and adoption must increase rapidly now before the government can act to ban it under the radar. If enough of the population cares about bitcoin and is aware of its benefits, there would be sufficient outrage to prevent the government from banning it. Look at the anti-SOPA protests for an example what can be achieved if enough people unite in resistance against an objectionable government action. The United States is not a dictatorship like China; the fate of bitcoin in the United States is in the hands of the people. We need to take responsibility and act.

all normal businesses whether or not they accept it.

OH... I see... :-)... Yeah... "whether or not they accept it"... yeah...

It will make sense in due time and be obvious in retrospect.

Wonder what would happen if, before many governments get around to formulating & passing law on bitcoin, we have another Cyprus style bail in or similar economic event?

Doubt we will see economic conditions change meaningfully to the upside in the next 6-12 months, infact probably more currency wars.

One poster said if no stores / businesses accept it, it will crash. Likewise if everyone flocks to it, it will skyrocket.

If adoption lags price spikes by 3-6 months, then Feb / Mar will be interesting.

Further, if the protocol proves to be as revolutionary as some predict, then regulating it harshly will drive away money, innovation and growth

I'm going long popcorn. Will be great viewing.

In a democracy, it takes some time to pass a law. Imagine if they tried to ban Bitcoin. There would probably be Senate & House meetings. Eventually a bill would be passed, then signed into law.

There would be a date that the law would go into effect.

I will be on a plane to another country before that law goes into effect.

As Bitcoin grows, some countries will embrace it. Those countries will experience strong economic growth. Other countries will try to ban it. This will chase innovation to other countries that embrace.

Eventually, there will be an economic divide, just like we have an internet divide.

We are living in interesting times.

Oh no, the EBIL US government. As if plenty of other nations don't play by the same rule book.

Why don't you bitch at your own governments before mouthing off about US?  Why don't you say the same about the chinese government that took the first major step in actually outright clamping down on bitcoin?


This is called a bitch mentality.




Let's have a serious discussion with substance. WHAT CAN WE DO IN ORDER FOR CRYPTO TO SURVIVE AND REACH THE HEIGHTS WE WANT?

Hint: wild jr-grade conspiracy theories and bitching about 'evils of US government' when you don't even take as much look into your own governments won't cut it. Governing and running a nation is a dirty business. Wake up to reality and stop squealing everytime someone does something you can't.

Within few years, the actual fiat currency will fall appart by itself.. it's inevitable, built-in this system..  
This will be the real start of a world wide BTC economy.  When it will happen, we'll no more price BTC in fiat.

It's money V4..

The governments around the world are all heavily debt laden. They used housing bubble to save the IT bubble from crashing, now when housing bubble crashed, they need another bubble that is magnitudes higher than previous housing bubble (e.g. at least one million dollars investment/consumption from every person) to restart the economy, and the best choice is bitcoin, since it has the ability to grow to whatever size when needed

The first government who mass invest in bitcoin will first get their economy back on track, because the extremely high return of bitcoin investment would help them to get rid of their debt quickly

http://sterlingdesktops.com/Stocks/obama-national-debt-thumb.jpg

I've thought about this too, johnyj.  What if we intentionally blow bitcoin into the biggest bubble yet?  Maybe the bubble that never pops?  A lot of people here say that governments would never want to allow bitcoin to thrive, but, like you point it, it would solve a lot of the problems with government debt and entitlement funding. 

If we can get those cheating and scamming chinos to invest money and get money back for all the IP and fraudulent fakes, not to mention all the bribes paid to the officials, then I say let BTC thrive.

Hell, payment for all that theft alone will wipe out the foreign exchange reserve of china. At LEAST.

Which Government are you talking about?
How many government?
Bitcoin is a decentralized and we are going to cover global
40000$ is minimum prediction it could go more
potential and bitcoin adoption will define it.

This begs the question of the economics of using a nitenol engine to recover some of the electricity consumed in Bitcoin mining from the waste heat produced in order to lower the effective cost of the Bitcoin mining operation.

Hellz yeah! I suggest we arrange for planes to fly with banners over Mumbai, Chennai, and Delhi. The banner should read, "We free ppl of the world choose gold and Bitcoin!". Who is in India who can take our donations and make this happen?

The more cryptocurrencies grow, the more difficult it will be for governments to stop it, why, because maintaining the illusion of a democracy (at least in the west) will become harder and harder if they start to ban it.

However, before bitcoin can reach a 500 Billion market cap is has some current limitations to overcome. Pruning will have to be implemented and block sizes have to be changed to handle more transactions per second.

Right. Give me somewhere that actually upholds democracy with out holes hundred times bigger than the west, only the curtains are thicker and they hide it better from gullible 'progressive revolutionaries' and 'civil rights leaders' of the west.

Jesus the naivte.....


What steps do you recommend to overcome the 'hurdles'?

500 Billion is not much.

try 21T

thats more of a figure you should think about

Govt's have no choice in this

to much money on the table

no crypto has your countries standing army, see when you can't pay your standing army any more or buy provisions due to people wanting crypto not paper/fiat, how exactly are you going to get your army to work?

+1
Governments could controll only there money not a global currency

I always thought CC's /Bitcoin~PeerCoin were going after a much larger cap/target that the global monetary supply rather many of the other asset classes as well. now where's that picture gone
http://img6.imageshack.us/img6/7319/028trillions.png

We're closer to 100 pixels now.  :D

In order for bitcoin to scale up, SPV (Simplified Payment Verification) has to be implemented, this makes light-weight clients possible so that not all clients have to download the entire public ledger. For more information: https://en.bitcoin.it/wiki/Scalability and https://en.bitcoin.it/wiki/Scalability#Simplified_payment_verification in particular.

To put this all into context - big government has been burnt before with the evolution of the Internet itself.

I (para)quote William Gibson of Cyberpunk fame:

"If the government had known what the internet would become, it wouldn't have allowed it to."

Reference: http://williamgibsonboard.com/eve/forums/a/tpc/f/2866012481/m/1156066104 (http://williamgibsonboard.com/eve/forums/a/tpc/f/2866012481/m/1156066104)

What I take away from that quote is that had the governments of the day known in advance what a major impact the Internet was going to have on privacy, security, equality and leveling the playing field then they would have taken early control of it and shaped it according to their own image. Yes, we would still have had an Internet but one I believe would have been tightly controlled with an artificial high cost of entry limiting benefits to all but a select few. They would still have us still using Fidonet style messaging systems that were slow and could be easily intercepted and controlled.

Once bitten, twice shy.

The Internet wasn't originally designed with civil liberty protections in mind - that was an unexpected side-effect of the connectivity the Internet gave us and it didn't happen overnight but rather evolved over time. Cryptocurrency on the other hand is an immediate and direct competitor to the current financial system, designed from the ground up to be an open and free alternative.

People often compare the current stage of cryptocurrency development with that of the Internet circa early 1990's. Big government would be well aware of what developed when they previously chose to be ignorant. It would be folly to think they are going to let history repeat itself, and so close to home.

Still... I'm an optimist, and while I can't predict the future I do have faith that Bitcoin and cryptocurrency in general has the potential to overcome whatever obstacles are thrown in it's way.

It's still going to be an uphill battle, enjoy the ride!

Google pays taxes and also bends over and gives the gov't whatever personal data about us that they want. 

Can the bitcoin protocol create and sustain a 500 billion dollar economy?
The way it is right now , certainly not.

You only need the US and EURO to ban crypto setting the president to make other countries follow suit - they all share the same fear that they'll lose control over their own money supply and with it the ability to regulate their economies.

Enjoy the ride now while you can; there is a lot of money to be made but the clock is ticking.

Yes, the most important part is that this bubble will never pop

A traditional bubble always pop after central bank raised the rate and tightened the money supply, together with the added production of the speculative target, many sellers could not find enough buyers with enough money, so they panic sell and the price crashed hard

But in bitcoin's case, there will never be added production no matter how high the demand is, and when central bank tightened the money supply, the bitcoin holder do not need to sell the coins for fiat money, they can simply spend it to buy goods/services, so there will not be a total panic sell caused by central banks' monetary policy. When there are enough merchants accepting bitcoin payment, the sell pressure on exchanges will get less and less each passing day

It is whether the banking cartels which largely control governments will allow bitcoin. Clearly they are already scared as you see US bank accounts shut down for depositing and withdrawing from exchanges.

But Governments aren't just run by bankers, there are other interests involved, like Silicon Valley in the US which now holds a lot of sway in Washington D.C. and is all for BTC. We in the Bitcoin community have to get organized. We have to support those with counter interests to the banks and the Basel based Western powers, so they can support us. We need to set up a rock and a hard place for the banking cartels of Basel, New York, London etc.

The banking cartels will not allow themselves to be relegated to an obsolete middle-man of history pushed aside by an emergent technology. I'm not saying that their victory is assured, but they will have no choice but to take a swipe at us, as they are already doing.  Right now without any real organization we look like easy prey. We must tip the balance and quickly.

I am considering how good strategy might play out, both from the bankers' perspective and ours, but it is clear to me at least that we must become organized if we are even to have viable discussions of successful strategies. I don't know that being nebulous and distributed/decentralized is enough. Although certainly educating every user back to annonymity is important.

No crypto can make all the banks close down.
You have to understand that banks don't just issue credit cards or allow you to deposit your money with interest.

Banks also lend money!
How will bitcoin lend money? Stop with the transpiration and FUD theory.
Banks and bitcoins can go along very well.

that comment made my day. thank you for that.

i finally found another person on this forum with some clarity - and fucking sense and reason.


on to my opinion: in short, i don't think it really can be stopped. various government agencies have studied Bitcoin long before most people here even heard of it. they are very curious as to what this could lead to. and, how they might benefit from it.

If governments keep losing their legitimacy at the current pace, we will probably reach some kind of critical mass soon, where the population no longer believes the best advice is coming from their governments. In such a world Bitcoin can survive even in the face of a massive government effort to ban or destroy it. It might even become the vehicle for a new way of organizing our societies. The current paradigm is coming to an end. National states as we know them is not necessarily something we will have in 10-20 years.

True that, didn't even think about that possibility :)

agreed  ;)

I think you are conflating two values.   There is the money supply and then there is GDP.  Unless velocity is 1 the money supply will be smaller than GDP.  For example globally the M0 is ~$10T however GDP is $75T that implies a velocity of 7.5.  It is unknown what the velocity of Bitcoin will be but given the low transaction cost it could be very high.   Thus a money supply (I hate the term market cap) of $500B could support many trillions of dollars in annual economic activity.

The size of the Black market economy is 10 Tr USD. So if BTC goes mainstream, and gets accepted by the black market mafias, a 1,000x increase in valuation is not impossible.  ;D

Well once again $1T economy doesn't require $1T in cash.   i.e. the world economy $75T annually runs on ~$10T in cash (M0).

Money supply is a timeless value.  Values of economies (i.e. GDP) are timed value (i.e. usually $x per year).  You can't directly compare the two and they will never exactly equal each other unless velocity is 1.  Usually the same unit (dollar or Bitcoin) can be used in MORE THAN one transaction per year and thus the velocity is >1.

I'm new on here but I always pay close attention to your posts, after reading through some older epic threads (circa 2011) where you posted and seem to always know what you're talking about

I understand that you can't quite compare GDP market caps with bitcoin (it's just encouraging and fun to see the comparison) :)

What would bitcoin's market cap be more comparable to?

Yes, they have to.

Last time  I saw this Bitcoin was but a dot in that figure. One can't help but get sentimental  :'(

 :D

Like usual , appreciating your post.
But can I have your view on the "velocity" of those two ? BTC and $ ?
I have the feeling that currently bitcoin is the tortoise looking at the number of transactions in the blockchain.

The most important historical reference here is the USA's ITAR restrictions on cryptography in the late 90's. (http://en.wikipedia.org/wiki/Export_of_cryptography_in_the_United_States)  They simply couldn't enforce it and had to give up -- not because they wanted to allow it, but because they were forced to admit they couldn't stop it.  It was a colossal loss of face for the US government.  In fact export of a lot of everyday crypto technology is still technically prohibited without a license but nobody bothers to ask for the license.  So crypto export happens even though it isn't allowed.

So, it has happened once already, and quite recently too.  Don't be so quick to berate people who think it could happen again.

To answer your question directly: no, they won't allow it, just like the US didn't allow the export of encryption technology.  But it happened anyways.  So I think the question is likely to be moot.  I think the likely endgame is something similar to the ITAR situation where you're supposed to have some sort of license but nobody bothers with it and the government knows it is unable to enforce the regulation.

Agreed, I think this is a troll thread.

There's a selection effect in play here, where the kinds of people who become career-track civil servants are those who believe the government is somewhat immortal/omnipotent/eternal, or at least damn stable.  Whether it's true or not is another thing.  Some people believe this, some don't… the ones who believe it are much more likely to be civil servants.  These people have a really really really really high threshold for jumping ship… major cognitive dissonance.  As in, about as likely as me applying for a job at the NSA.  It would take something truly apocalyptic.



That's nice, but the in-private actions of bureaucrats are no more relevant to government policy than the in-private actions of non-bureaucrats.  My point is, even if these people are hedging in private that fact isn't going to deter obnoxious+hostile laws and regulations from being promulgated.

We have very limited data to work with.  Velocity is the metric which balances money supply and GDP.
GDP = Velocity * Money Supply.

In plain english terms
(economic activity) = (avg number of times a $/BTC is involved in an economic transaction) * (money supply)


Change in velocity is why we have seen little inflation despite the fed printing an insane amount of cash.  If velocity remained constant we would have seen massive price inflation which would drive up at least the nominal GDP and force companies to spend their rapidly depreciating cash reserves.  Everyone has heard about how much the fed is printing (increase the money supply) however the other component is velocity and in this lackluster recovery velocity has collapsed.  More money is offset by less transactions per unit (dollar) and thus the economy remains sluggish.

http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=M1V&scale=Left&range=Max&cosd=1959-01-01&coed=2013-07-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Quarterly&fam=avg&fgst=lin&transformation=lin&vintage_date=2013-12-28&revision_date=2013-12-28
BCT image proxy doesn't like the image so here is a direct link to the chart: http://research.stlouisfed.org/fred2/graph/?s[1][id]=M1V


In the Bitcoin world I don't know of any detailed analysis of GDP or velocity.  The nature of Bitcoin makes that difficulty,  although as Bitcoin gets larger I imagine economists will attempt to estimate the GDP just like they do other economies.  Even in "real" economies GDP, velocity, inflation, and even money supply are just estimates. 

One crude way would be to look at things like blockchain.info "estimated transaciton volume".  Blockchain attempts to remove the change from the transaction, but not all those transactions are "economic" and thus don't contribute to the "Bitcoin GDP".   Someone moving coins from one wallet they own to another wallet they own is not economic activity, anymore than moving $100 from your checking account to your savings account adds to the US economy.  Per blockchain.info there were 73 million BTC in transactions in 2013.  The average money supply for 2013 was 11.4 million BTC.  If we assume all blockchain tx were economic (not likely) and there were no economic off blockchain tx (not likely) that would be a velocity of ~6.5.  The hard part would be quantifying economic tx vs non-economic txs.

In comparison, national economies generally have a velocity of between 5 to 10 when looking at the M1.  Bitcoin is technically more like M0 but it probably displace the utility of M1 so that might be a better comparison.   Currency is a store of value, and a unit of account (used in transactions).  Bitcoin has been primarily the former but if it was used in transactions heavily I would imagine it would have a velocity on the high end of national currencies (i.e. velocity of 8 to 10 or higher).  On the other hand if BTC remains primarily a store of wealth and not a transactional currency it could have a very low velocity.  I don't know if anyone computes the velocity of gold (or more specifically gold bullion and coins) but my SWAG is that it is very low (<1).  A lot of gold once minted simply never changes hands for years or even decades.

TL/DR version:
We don't have enough information to estimate with any degree of accuracy the velocity, or GDP of the "Bitcoin economy".  Most national economies have a velocity (M1) of 5 to 10.  If we Bitcoin ends up similar that would mean supporting a $10T economy would mean a money supply valued at $1T to $2T.  On the other hand if Bitcoin was used more as a store of value then it would drive down velocity and increase the value of the money supply.

BTCJam is a bitcoin community loan system.  It works very well, bitcoin users fund loans for others and receive loans from bitcoin users.  There is a rating system that works very well, and arbitration system and You choose the loans you choose to participate in and your risk.

Mtnminer

Interesting.  Would you agree that the M3/M0 ratio would be larger in a fiat-based economy than in a bitcoin-based economy?  

For example, I have very little "cash" at home, but plenty in the bank.  Of course my cash at the bank is not my cash at all and is instead lent out, thereby increasing velocity.  In a fully-developed bitcoin economy, I believe I would store a much larger fraction of my bitcoins in a paper wallet, outside any bitcoin banking system that emerges.  Perhaps a lot of economic participants would be content to sit on paper wallets and slowly take advantage of the natural deflationary gains, rather than risking their coins by lending them out.  

When you factor in those in the top tiers of the wealth distribution holding in excess of (say) 75% of the coins, could not velocity in a fully-developed bitcoin economy drop below 1?

I wonder if we can find historical data on velocity during times when gold coins circulated freely (and rich lords had huge vaults full of the stuff).  

We can easily shelve this and reopen it later with more information. Even $1T implies ~$48k per Bitcoin :)

The fraction of government employees who are True Believers is fairly small, at least in the US.

The typical government employee is disgruntled to at least some degree and is there for the pension.

Thanks for the explanation , I appreciate it.
I also believe that lots of those transactions are from people changing addresses not even talking about some betting websites that artificially inflate the volume , or how the scammers from sheep market tried to run with the coins.

But still to think of bitcoins trying to replace this and the value it should reach for this sounds too good to be true for a bitcoin HODLr.

Crypto won't survive. That's the whole point. Look you could have had some other cool and fancy and amazing formula/equation or whatever you want. In the end the government is going to tax/regulate. If anyone is going to sit here and say this will be tax free with no regulations, you literally are some kind of self delusional free spirit thinker who thinks they know everything. Governments always tax, they always regulate, they always create laws/bills/amendments/policies/reforms.

The thing that puts me off the most about the virtual currency community by large, is that you all are so incredibly idealistic to the point of insanity. Come on down to earth and look at the track record of the US government. Don't sit there and say oh ra ra bitcoin da best, oh ra ra nothing can stop us, oh ra ra we are so incredibly hipster in the virtual world. Once everyone gets in on this almost none of you will even want to be associated with it. Same with Facebook, all the adults start using it, your parents, uncles, aunts, grandparents etc and everyone is fleeing Facebook and hopping on the twitter/instagram/pinterest/vine "next best thing that is for cool alt people".

I am extremely prejudiced against these type of people because my girlfriend has so many stupid friends like this (some are even into bitcoin) and they are the most annoying pretentious stupid people I have ever met.

Isn't it funny how people who hate Bitcoin and believe it will fail will somehow still take the time and effort to register on this forum and talk about it?

How often do people actually do that in real life?

I know I've never taken the time to register and hang out in a forum relating to things I'm not interested in, and I also know there are people who are paid to do exactly that:

http://www.rawstory.com/rs/2011/02/18/revealed-air-force-ordered-software-to-manage-army-of-fake-virtual-people/

I like bitcoin if you are addressing it towards me.

Uh, who's talking about True Believers?

The fraction of government employees who think the current form and amount of government will persist for the rest of their lifetime -- and will retain its current degree of control over society and the economy -- is damn near 100%.  Otherwise….



… they wouldn't assign so much value to that pension.

In order to "jump ship" that civil servant has to admit to himself/herself that all those years spent working towards that pension were wasted.  Most normal people have a hard time taking a step like that.

I agree with the fact that some major institutions will benefit greatly from using bitcoin, it might not necessarily be a government  anytime soon, but some major institutions will/is adopting it.  We need to find and encourage those institutions with what little power and influence we have.

We need to create allies to stand up to the banks with us. We need to be able to surround the Basel based cartels with counter-levers.

We will need some legal or at least wink-wink nudge-nudge jurisdictions where we can convert into other forms of liquidity, whether gold or IMF money.

I personally think that bankers and those regulators in China and India (especially China) are already buying big into bitcoin for themselves personally. Watching trading closely with the BTCChina.com price movement, and knowing Chinese culture, where corruption and well positioned networks taking care of theselves isn't really considered corrupt like we in the West do, I think there is little doubt that the very Government officials who banned deposits onto the exchanges are themselves getting Yuan on the exchanges. Even if they aren't getting their own deposits on right now, the Chinese population assumes that's what's happening.  It's just the accepted way their economy and culture works, it's considered normal.


I think we will have to consider diversions and distractions as key in our maneuvering. We will have to show the Basel, London, New York cartel “one main initiative” while actually going after multiple lesser initiatives more quitely. Remember, many within the cartels and governments know just how messed up it all is even more than we do, and are probably hedging their wealth just like we do. So it's not that the beast is totally committed against Bitcoin. Officially as an institution they may be, but as component individuals in those institutions they are not, so we already have our “double agents within the enemy. “

China is a great example, right now as the world's 2nd largest economy they have practically no power in the IMF and global banking/printing regime. They have no derivatives market power from the Yuan, they have no international repo market power. This is why they are buying shit tons of gold and have printed $15 Trillion in the last 5 years (there really is shit tons of money to get out of China). They are getting ready to assert themselves by playing unfairly. They are waiting for the natural cracks in the Western alliances to form, then China will say, oh look, we have real money, gold and real copper, and real, etc., etc. They already have the influence  all over Africa and Asia to the point of boxing out all Western corporations from getting any major new (mostly engineering) contracts.

Why wouldn't it be in  China's interests for example to get a contract with Friedcat and right now on the exchanges be buying Bitcoin , and then back 2 million BTC with gold as a part of asserting themselves into the new global reserve system (whether or not that new system is the reworked Special Drawing Rights regime when the IMF gets reshuffled).
Many states have been screwed by the Anglo-American-Basel power triangle, why wouldn't they give Bitcoin a home and thus let more bitcoin flow to them? The central bank of Malaysia is cuttting edge and has been diversifying into very innovative baskets of reserves for a long time, why wouldn't they buy bitcoin and give it a home?

We just need to provide a few side doors for the powerful who are inside the Anglo-American-Basel triangle to feel secure in the liquidity of their own personal Bitcoin reserves. And then we secure Bitcoin's double-agents in the halls of Basel, the Square-Mile of London, on Wall Street and in Washington.

We should probably set up a fund for legal and political economic lobbying and alliance building. Just laying down when finally libertarians have a real chip on the grand poker table of world affairs would be to act like the slaves they try to make us think we must be. ... When it's time to go all in! Show some f*ck*ng balls my fellow libertarians! Do not just bow down because they dangle power over you like it's naturally theirs in the physical order of the universe. It is mostly in all our minds, it is phenomenological 'power' first! They have pieces on the board of the chess match of perception and belief, but so do we (and most of all, let them play chess while we play Go). Their fiat is weak, everyone knows it. We must see their strengths and weaknesses but also our strengths and weaknesses... And play to win!

http://sterlingdesktops.com/Stocks/obama-national-debt-thumb.jpg

This means that the real value of US Dollar will decline by somewhere around 8% to 10% on a year-to-year basis until 2020.

So what would healthy discount rates be for investments? 10% has been the norm, but that assumes 2-3% inflation.

What is the 'real value' of any currency? By unofficial estimates, black and grey market trades in various nations actually absorb a good 10 % of their GDP. Not to mention the old joke:

A chinese college student majoring in economics, a rising star in the department widely acknowledged to be on track to a lucrative work in the government, is sitting with his friend and makes a bet: I bet you 100,000 dollars you won't eat this bucket of shit. His friend does. Now the friend makes the bet that the econ major won't eat the same shit for 100,000 dollars. Econ major does this. Now they are both sitting with their mouths fully of shit and nothing gained, and econ major turns to his friend and utters the immortal line:

Don't worry friend. We did our patriotic duty. Our country's GDP just increased b 200,000 dollars!


Just a tip of the iceburg. Reportedly, the 'black money' in india accounts for nearly 100 billiion that leaks out of the country. Per year.

People think the GDP figures by the 'evil' US government is 'embellished'. They have no idea what it actually means to lie about a nation's economic figures.

That's the whole POINT of bitcoin.  Once the network gets big enough, they won't have the *ability* to decide to "allow" it or not.  They don't "allow" pirating or The Pirate Bay, and of course nobody pirates any more and the Pirate Bay website has been shut down for good.

This is a fundamental fallacy shared by many bitcoiners. Governments can easily 'not allow' bitcoin (for all intents and purposes) by simply passing a new law saying any ISP relaying bitcoin related traffic will be shut down.

That move alone vastly reduces the number of miners and nodes probably to the point where a 51% attack becomes easy, and the currency crumbles.

Don't get me wrong, I'm extremely positive about bitcoin but you have to understand how vunerable it is.

Cheers, Paul.

I think bitcoin and government could work out very nicely together, and I think people in various branches of governments will eventually realize this.  For example, imagine how we could streamline VAT collection and accounting.  The tax authority could give a coffee shop a small discount on the VAT rate if the merchant chose to accept retail payments to a BIP32-encoded address chain that the tax authorities could monitor.  The coffee shop's payment system would automatically deduct the VAT and remit it to the tax authorities in real time.  If the merchant's suppliers were set-up in a similar way, then the coffee shop would receive its input tax credits instantly as well.  If everyone was using such a system, it would completely eliminate VAT accounting since the process would be automatic and auditable in the blockchain.  No end-of-the-year paperwork!

This doesn't invade privacy either: the coffee shop owner can still have private addresses that he can do with as he likes.

Oh, no. An attack for which we couldn't possibly deploy any countermeasures. I'm scared now.

Suppose such a defense existed and bitcoin was able to continue under majority-of-countries ISP ban. Who exactly would still be using it?

More people than you think.

Trading relatively ambiguous IP of films, images, and songs are not the same as directly challenging the financial system of the nations.

You are seriously deluded if you think internet is some kind of safe haven from others. People run these things. People are very much more vulnerable than most like to admit.

DPR might have a thing to two to say about trying to play at being in over your head.

Just because somebody lets a small fish flap its gums doesn't mean you should get ahead of yourselves.

Controlled opposition?

there would be so many ways around this, look at emunie for instance, also not everyone rely's on mining systems

it's trivially easy to route bitcoin and mining through a proxy.  the reduction would be from the people who don't want to "risk" disobeying the government-- it would NOT be a technological barrier.  of course that reduction would reduce the network hashrate, and probably a price crash, but given that bitcoiners are by and large a freedom loving ideologically driven group, i dont think the reduction would be as great as i think you think it would be.

So after two and a half months.....are people still very confident that crypto will not 'allow' a government or oversight entity to interfere in its operations? ;D


So many people did a 180 and started singing a different tune after they got fucked by Gox LOL


How does this topic apply today?

Re-discuss :)

Governments can go to extreme lengths to stifle innovation. Copyright was invented to restrict the free flow of information after the invention of the printing press. The industrial revolution still happened within 300 years.

Bitcoin proves that financial restrictions are also simply restrictions on the free flow of information. The powers that be will probably try to stop it, but the computer revolution will also happen within 300 years (if we don't kill ourselves first).

The computer revolution has not happened yet. Today's computer systems barley scratch the surface of what computers can do. It is slowly changing, but for the most part, computers emulate the technologies from the last century.

lol, you're the deluded one by diminishing the impact of piracy,which costs the music books tv and film industry a combined loss of well over a quarter of a billion in lost revenue each year. If it was possible to put a end to torrents , they would have done it by now. No different for cryptos, the genie is well and truly out of the bottle.

The Government isn't some omnipotent god-like overlord of the people. The Government is limited to work with certain enumerated powers. Destroying Bitcoin is not one of the powers they possess...

Cryptography isn't new and it's already withstood the government's attempt to destroy it. The government attempted to regulate cryptography as "munitions" in 1993. They lost... The Judicial Branch of the US Government has already safeguarded cryptography. Combine Bitcoin with the Fifth Amendment against self-incrimination and Bitcoin is pretty much secured. You cannot be compelled to reveal your private key if you choose not to... DPR was facing a laundry list of charges; no doubt he was compensated in some way for that private key, he agreed to the deal; whatever it was...

"Two federal appeals courts have established the rule that cryptographic software source code is speech protected by the First Amendment (the Ninth Circuit Court of Appeals in the Bernstein case and the Sixth Circuit Court of Appeals in the Junger case)."

Bitcoin regulation is not possible; USD regulation pertaining to Bitcoin transactions is within the regulatory authority of the Government but it's thin ice because it's illegal to restrict USD transactions for political protest. Bitcoin by nature is a protest against the current financial system. Choosing to use Bitcoin is political protest as protected by the First Amendment; using a competing product is protest be it subtle or not...

The Government destroying Bitcoin is equally as likely as the Government declaring Martial Law and throwing political protesters in FEMA camps... It's just not a fight they're in a position to win and it's not within the scope of power that they possess.

They would need to change several previously existing laws, the Judicial branch would need to reverse its stance on the First Amendment, and then to make matters more complicated, any laws that restrict Bitcoin would also restrict other digital tokens of common use, the digital marketplace would essentially collapse and that's a huge financial sector in itself.

"In the abstract, spending money can be considered a form of speech in the same way that throwing a brick through a window can be considered a form of speech. The issue is a question of balance. Nobody believes in protecting the right of the brick thrower to “speak” by committing an act of violence over the right of the window owner to be secure from destructive acts." --http://www.amendmentgazette.com/how-spending-money-became-a-form-of-speech/ (http://www.amendmentgazette.com/how-spending-money-became-a-form-of-speech/)

Bitcoin needs fiat to survive and grow.  All government has to do is block funds at the source.  The banks.  The same way they did for online poker.  It's not difficult at all.  If they really wanted to get nasty, they could make it illegal for businesses to accept it.  Mass adoption = dead.

That said, I think they will allow a $500 billion Bitcoin economy because that's a lot of tax revenue to be had.  They'll regulate exchanges and any sources of money in and out of the network to get their cut and I think that's a good thing as long as regulations are fair and aren't hindering startups.

Yeah, prohibition without justification has always worked.

Mama don' 'low no bitcoin payin' here
Big brother don't allow no crypto payin' here
We don't care what mama want allow
We're gonna use our bitcoins anyhow
Mama don't allow no crypto using here

Certainly not but prohibition was done against the majorities wishes.  Bitcoin does not have the majority of the population on its side as of yet.  Merely a sliver at best.  Hell, at the moment, most are terrified of Bitcoin.

Haters gonna hate. It's hilarious.

 ;D  Why you think I'm hating?...I'm not hating, I'm just stating reality from my view.

Not you, I don't engage in petty insults unless I am both inebriated and well provoked. That comment was aimed at the reason people fear Bitcoin.