Bitcoin Forum

How Should Bitcoin Be Regulated?

http://cadmus.eui.eu/bitstream/handle/1814/32273/183UK.pdf?sequence=1

Abstract:

The lack of clarity about Bitcoin’s legal framework has meant that none of the
regulators across the EU have yet achieved sufficient clarity in the legal treatment
of Bitcoin and its stakeholders. This uncertainty poses a number of substantial
risks to Bitcoin stakeholders and creates challenges for regulatory authorities.
Therefore, there is a need for a clear strategy for Bitcoin’s regulation aiming to
ensure the maximum possible balance between the interests of Bitcoin stakeholders
longing for the preservation of Bitcoin’s benefits and mitigation of relevant risks,
and the interests of regulators striving for ensuring the compliance of Bitcoin
stakeholders with the law. In this paper, the author develops such a strategy. Its
implementation provides for the official recognition of Bitcoin as an unregulated
technology, the recognition of that Bitcoin users interacting between each other
and Bitcoin miners are outside the regulatory scope, and the efficient application
of existing legal mechanisms to Bitcoin merchants, Bitcoin exchanges and the
relations between these categories of Bitcoin stakeholders with Bitcoin users. Thus,
the balanced regulation of Bitcoin is achieved in the form of a partial regulation
of the usage of Bitcoin at different levels of Bitcoin’s functionality.

Keywords:
Bitcoin, Banking Regulation, EU Law, Payment Systems, Regulation

I would say, don't create any special regulations for Bitcoin that don't already exist for the financial sector. Don't regulate the technology behind cryptocurrencies; just let it develop naturally. And respect the fact that people can send Bitcoin and receive Bitcoin relatively anonymously. If some spook from the government offers to "help" develop the technology, don't trust them because we've seen that the government can and will deliberately introduce weaknesses into the system that they can then use to find out who is doing what and constitutional guarantees mean nothing when there are courts that only exist to issue warrants on demand.

The Gov't should voluntarily decide to shut down most functions out of respect for the new way of doing things.  :D

Bitcoin is already regulated by free market.

What the government really want is try to "control" it and decide what people can and can not do.

If only, if only ;D

Bitcoin is already regulated by trusted nodes and mathematics. Why would we want to add flaws in the system that can be backdoors for corruption?

By all means regulate the onramps and offramps beause they deal with traditional banking. (With the same guidance other traditional banks have). Once you move on the blockchain the government is not needed and the only thing that is needed more of is nodes, miners, more code debugging/auditing , ect...

Whether it's regulated or not, the native code allows it to run, unaffected by regulation. It was never designed as such, so why would it need it at all? Every country can ban it for all they want, but the bitcoin network will still chug along.

the Bitcoin network and block chain cannot be regulated and influenced by anyone, other than the network itsself. The regulation only applies to the bitcoiner, the BTC companies, BTC exchange etc.

It shouldn't, unless you want it to lose all of its potential positive impact, in which case why even have it?

I don't think that Bitcoin should be regulated by any authority, financial institution, government etc.
Bitcoin should stay free from any official control and develop according to the free market rules.

Regulating bit coin itself is impossible. The only places they can do anything is where it touches currency and there are all ready existing regulations for that in the form of consumer protection laws and aml etc.

Bitcoin should be regulated just as it has been... according to the rules of math and science. The only additional regulation might be to add a method for easy escrow - easy for the non-technical people, that is - right into the protocol.

On the other hand, PEOPLE should be regulated to death. People should be regulated so that they can't use money OR Bitcoin for anything without FULL NSA and government tracking and observation. Why? This will protect Bitcoin from being regulated by government, so that government officials can use it for all the nasty, underhanded schemes that they can get away with. These include ever increasing taxes on the people who are regulated far too little already. It would also include easy transfers of funds by agencies like the CIA into all their slush funds overseas and around the world, so that they can promote more wars and disruption worldwide.

The point? Bitcoin will remain free !!!

:)

Regulation seems like such a dirty word round here. I know they can't really regulate the technology (and I hope they realise that), but the governments are going to want to regulate the way people deal with it or when they sell it for fiat. It's going to be interersting to see how each different government deals with it though and it'll be funny watching how badly they screw up.

I don't think it should be regulated. It regulates itself, though I understand that the powers that be are going to anyway.

Bitcoin should ABSOLUTELY be regulated. It should be regulated just as it IS BEING REGULATED, by the math and science of nature, that are being used in the protocols.

In fact, there is NO OTHER WAY to regulate Bitcoin. None of the governmental regulation is Bitcoin regulation. ALL  of the governmental regulation - 100% of it - is PEOPLE regulation.

Personally, I'm a bit tired of being regulated by government so that they are forcing me to do their will. Isn't this the reason that Satoshi invented Bitcoin in the first place? because he was sick and tired of the banks and governments regulating our lives in ways that we didn't want?

If you want to get regulation out of your life, you need to FIRST recognize that governments don't regulate Bitcoin. THEY ONLY REGULATE PEOPLE !!!

:)

I think it shouldn't be regulated at all, it's fine as it is.

This is a trick question, right?

What does regulation mean? Ha, there should be very little regulation...let the community regulated it based on their actions not a set of by-laws and infrastructure.

I don't think it should be regulated at all.   I do however think that it is naive to believe that there could ever be adoption on a massive scale without governments stepping in and sticking their hands in everyone's pockets.

At the end of the day, they pretend to care about people's financial well-being, but they really don't.   They just want to make sure they are getting their piece of the tax pie.

Minimal regulation, just enough so that bitcoins can be used in ordinary markets. Otherwise there may be a split like this:

"Why Bitcoin May One Day Split Into Black and White Coins

Rumors are swirling that as governments move to integrate and legitimize bitcoin, it could have a divisive and lasting effect on the virtual payment system. Forcing regulations on bitcoin could divide the digital currency into two camps: coins that are regulated and managed by a government or central agency, and coins that remain pseudonymous and decentralized. White coins and black coins." -- Full story: http://motherboard.vice.com/read/why-bitcoin-may-one-day-split-into-black-and-white-coins

It should NOT be regulated!

And if it IS regulated, we should ferociously resist compliance ...

This is an interesting subject because if you regularize BTC you sort of lose that anti-stablishment appeal of the concept. I wonder what Satoshi's views was regulation-wise? Did he want just a 100% free currency careless about what the powers that be had to say about it?

Here are Satoshi's views:

http://satoshi.nakamotoinstitute.org/posts/

Satoshi was either a Libertarian or anarcho-capitalist/agorist and was distrusting of both banks and governments.

"Yes, [we will not find a solution to political problems in cryptography,] but we can win a major battle in the arms race and gain a new territory of freedom for several years. Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own." - Satoshi Nakamoto

"[Bitcoin is] very attractive to the libertarian viewpoint if we can explain it properly. I'm better with code than with words though." - Satoshi Nakamoto

In the Bitcoin network's transaction database, the original entry has a note by Nakamoto that reads as:

"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"

The only way to regulate bitcoin is by enforcing AML on all exchanges.

The problem with this is that small amounts of regulation will give legitimacy to bitcoin, helping increase bitcoin adaption. If people do not use bitcoin in mass then the price of bitcoin will eventually flame out.

I think it should be regulated in some way, so companies willing to deal with/in bitcoin have some legal framework and groundrules they can take into consideration. Maybe the 'right' rules have yet to be found and I, personally, don't exactly know how they should look, but I am certain that there need to be regulations.

I think Bitcoin should be the "official" cryptocoin and a coin like Monero could take the 100% no regulation super anarcho coin with no limits or boundaries on what you do with the money. Only this way people will find enough thrust in BTC imo.

No, other alts can create weaknesses and backdoors for corruption by introducing "regulation". Bitcoin by definition has certain core principles that if deviated from will essentially create a new alt. No compromises, No apologies. They can fight it or benefit from it, progress will move on and they ultimately have the choice of whether or not they wish to become the next Kodak.

Bitcoin will gain mainstream legitimacy through better security(hardware wallets), better software design(More intuitive wallets), a history of holding its value and increasing in value, and by providing secure and low cost transactions.

Political Regulation has proven to not work and will only lead to allowing existing banks the ability to steal our technology to extract greater profits while they refute the whole Raison d'être for Bitcoin in the first place.

Bitcoin should not be regulated, I don't want the banks to think for one second they can get in on this. But it is going to be a very difficult few years for bitcoin with the possibility of becoming very mainstream and regulations, we will soon see.

The bitcoin network is regulated by the network itself, and seems to do well if you compare it to the regulated bank system which continues to suffer from inflation.
I do not think it needs any regulation at present, as it will be in the way of innovation.

I think the various governments have got their words mixed up... I think they meant "how do we tax bitcoin".   Also considering it cost me £30 to transfer £550 between two international bank accounts a few months ago I suspect banks are wondering how to "regulate" bitcoin so they can keep committing daylight robbery on people who simply want to move money around.

If bitcoin will be regulated by someone...it will lose an idea of bitcoin!

That's a very difficult question, indeed! I personally believe that it should be as unregulated as possible, for it is one of the biggest advantages of Bitcoin. But it also needs to comply with the laws of the various countries. So there has to be some kind of compromise or way to adapt those laws to Bitcoin and provide a legal framework for businesses wanting to deal with it!

It shouldn't be regulated, period. That's kind of the whole point. If the government tries to ban or control it with taxes and what not, I'm really hoping the bitcoin community will respond by showing the middle finger.

"We've decided that you can use bitcoin, but only if you use a special government sanctioned wallet that subtracts a tax fee from every transaction you make. If you won't do that, you're going to jail for being a terrorist. Thank you and good night."  ;)

I think the point is as I've seen elsewhere.... if the governments want to regulate the exchanges that reside in their territories then so be it... but as for bitcoin it's self, then no, no regulation.... so money has evolved to a point where in bitcoin they can't tax it when you spend it... or charge bob an arm and a leg when he wants to send money to joe.... TOUGH!  social media and the internet has made a world where distribution/publishers in the music industry are all but not needed... they kicked and screamed (and still do) because they want to keep making bucket loads of cash out of every day people... its amazing because now with bitcoin I see exactly the same thing happening again but this time it the banking industry which frankly are the biggest crooks in the history of all things ever!

I'm not against paying taxes... thats just a collection necessary to keep civilisation running (for now)... but I am against the rich getting richer simply because they have money.... this could be the beginning of a world without banks, or at least banks as we know them, well things evolve I guess.

Yes this is the type of thing many fear.  I know the BTC communtiy would resist but would ma and pa shopowners resist or just go along?  Probably go along and we're stuck right back with the same problems as the dollar.

Luckily its full nodes and miners who vote on the direction of the protocol and not just a shopkeeper who uses a third party payment processor. By the time they start keeping some of their profits in BTC and install a full node wallet than they are likely to think the same as we do.

Goverments always want their say in things even if it's not their property. Bitcoin can regulate itself and people can decide themselves what they want to spend their money on, if it's crypto's it's their choice, any limitation from regulators is like communists, we'll have to overcome. 

This would be impossible to enforce. Since the bitcoin network does not have a specific address, the government would have no way to determine if someone is connecting to it. Not only that but it is easy to use bitcoin via TOR, which would cause a lot of uproar by even liberals if access to this was limited.

For the OP: there should be mild regulations concerning converting BTC to fiat and fiat to BTC to combat money laundering, other then that BTC should really not be regulated IMO.

I was mostly kidding, but you're right, if the anonymity aspect was limited too much not only it would upset the users, it would also make bitcoin much less appealing which would kind of defeat the whole purpose. I'm sure they'll find a way to get at least something out of it though.

I think this would still allow bitconi to be used with anonymity. Actual exchanges would only need to verify the identity of people and would not need to report their identity to the government. People could use mixers to make it so their identity is not associated with the actual coins they bought and their identity.

My thoughts exactly. Bitcoin is simply the exchange of information - bits of data - math. Free flow of information is vital to the health of a democracy...

You can't stop free speech in modern democratic society.

Bitcoin can NOT be regulated. At least regulations can not be effectively  enforced. They tried with alcohol, pot, prostitution, online gambling. Bitcoin will be even more difficult than all of the above to regulate.

But I assure you as tax revenues drop they will try.

IMHO:

Internal regulation: Yes, within the code advancing with the idea that BTC doesn't need anything outside it's own code to work.


External regulation: No. Unfortunately I think this regulation is inevitable, cause all those Dinosaurs will want to control it in some way (yeah, that just shows how they don't have a clue about BTC, I know).



The real question to me is how should the community react to external regulation, mainly the business owners.

Yeah, so it will be forbidden by the government. After all it is still the government that passes laws and has a monopoly on enforcing those laws, even by using force ifneedbe. We need stable regulatory frameworks in order to make it possible for companies to get on the Bitcoin train!

Bitcoin shouldn't regulated. does they seriously think USD will lose to BTC  ???


This happen, bitcoin price might freefall


You right, but some bitcoin service is already try to track you bitcoin (as what i see)

Bitcoin should not be regulated because it is used as decentralized currency to replace the currencies issued by countries.
If it is regulated, it is value will be reduce.

Bitcoin needs to remain UNREGULATED or else it will be vulnerable to monopolization by large corporate entities. We're already seeing this with CoinBase, Circle, etc.

If we want a crypto world bitcoin should stay free.It should be regulated by free market and develop by free market rules.

it shouldn't, thats the idea, wasn't it?

In the US the right to unrestricted and unmonitored use of Bitcoin should be ratified as the 28th Amendment to the Constitution.  :)