Bitcoin Forum

If tomorrow all the international drug peddlers, arms dealers, human traffickers, bonsai kitten merchants decided to trade solely in Bitcoins, could the US or any other government actually make the bitcoin itself illegal?  Instead of cracking down on illegal businesses, could a government actually outlaw the process of mining or transfering a bitcoin itself?

Sure. Gold was confiscated by FDR in 1933. That's not necessarily a bad thing if we use Bitcoin to back the economy through official govt channels.

Yes.  Democracy is the original 51% attack.

A Bitcoin private key is data.  When data is created using software running on your own computer it is probably safe to consider that as protected free speech.  So it is unlikely that creating these bitcoin addresses and private keys on your own computer is ever something that could be made illegal. 

However, there are certain things governments could do in response to Bitcoin and an even wider list of things they could try to do (e.g., require any party that accepts online digital currency to follow Know Your Customer requirements for instance).  

Here are some relevant links:
 - http://www.quora.com/Is-Bitcoin-legal
 - http://www.bitcointalk.org/index.php?topic=6247.0

Bitcoins can always be made either legal or illegal.

I'd still use them.
Why?
Because they would be banning IOUs next.

Hmmm, if they did that many, many businesses that have floated bonds (a form of IOU) as well as governments would have some serious issues remaining in operation. No?

- Zed

This is what I love about bitcoin.  It's just a balance.  There no confusion, just a number, and it's never negative.  There's a bit of market manipulation because some people have huge stashes of them, but so does cash.  The FDR is probably wishing that they thought of bitcoin.

FDR isn't doing a lot of wishing of late?

so is an image depicting child pornography.

some types of data can most definitely be outlawed.

But a key can be converted into a song... Freedom of speech in any civilized country.

hahaha, a mother-fucking rap song? hooray for 'free speech' :)

If government's can make incandescent light bulbs and carbon dioxide illegal they can certainly make Bitcoin illegal. You only have to ask yourself, "do I follow natural law or positive-law?" If you follow natural law, then you are already likely distancing yourself from those who choose to use force and coercion against peaceful people and are likely completely ignoring all those "man-laws" anyhow. So when Bitcoin becomes illegal you will already be in the mindset to not give a crap what those (pick your crimnal gang calling their selves "government") have made illegal this time.

-Teej

They could make it illegal, but they will have a lot of trouble enforcing it. They'd have to basically shut down the entire internet as we know it in order to stop it. At this point, there is way too much vested interest from powerful parties to allow the internet to be shut down.

I think the OP is combining two concepts.

Can the US govt declare Bitcoin illegal?  Sure.  Anyone saying otherwise is naive.  The US govt makes thousands of things illegal every year.

Can the US govt enforce that legislation EFFECTIVELY?  Well that is another question entirely.  Marijuana is illegal in the US but it is sometimes easier to acquire than herbs which ARE LEGAL.  Bitcoin would be even more difficult to Police due to the fact that it needs to physical form.  You can encrypt a wallet and claim plausible deniability.  You can't encrypt a physical item.  If the US can't keep tens of billions of dollars in drugs changing hands every year they have no chance of stopping Bitcoin.

So yes govt can declare just about anything illegal but that doesn't mean they can stop it.

Making Bitcoin illegal would only increase the demand and value just as any other blackmarketed item. Illegality would also make BTC more widely known to the masses just as the Napster fiasco brought MP3 to the masses. This of course will make more troubles for government's fiat junk as more and more people begin using the competition.

"An act to criminalize private issue IOUs managed electronically through a cooperative authentication system" is a phrase coming to a bill near you.

I see fascism in your future, now give me back my crystal ball.

FTFY. Must be a hindsight crystal ball.

Yup, we just have to make sure we build freedom tools faster than they can legislate.

i think it is safe for now unless it is used for pirating movies  ;D

It is possible but I suspect unlikely. A more likely scenario is that Bitcoin would be treated as foreign cash or gold requiring the reporting of transactions with a value over a certain amount say 10,000 USD under anti money laundering laws.

Oh man I hope not! Seems like it's already too large and dispersed to take down.

If tomorrow all the international drug peddlers, arms dealers, human traffickers, bonsai kitten merchants decided to trade solely on the internet, could the US or any other government actually make the internet itself illegal?  Instead of cracking down on illegal businesses, could a government actually outlaw the process of hosting websites on servers or browsing the internet?

I wonder if there is a way to pay VAT and sales tax by bitcoin. That would help to avoid government antagonism.

You imply the government is not related to these crimes. But often governments are corrupted and have interests in illegal things...

This to me would seem an impossibility (and thankfully so). Incidentally, the IRS in my opinion IS goverment antagonism.

Robbers and Murderers and even Pirates are eating bread. They even do it every day! Forbid bread! This stuff must be illegal!!!

Of course they could.  In the USA most things to do with securities start off as illegal, and then the good fed declares an exemption.  Just check out the Reg S or rule 144 laws...   

This is a brilliant statement. I might need to put that on a t-shirt some day, or put it in my sig...