Bitcoin Forum

Being the extreme realist, if not pessimist, I believe that Bitcoins will be made illegal sooner rather than later. It will obviously be hard to enforce this. However, the fact still remains: it's ILLEGAL. You wont be able to buy or sell your Bitcoins through bank transfers and webpages cannot legally accept payments in Bitcoins.

My thought was that I could buy some Bitcoins today and cash out in the future (hopefully x100 the value  :P), but I have no intent in doing anything illegal.

So in one year (or however long time it takes) will I be sitting with a 1000 Bitcoins that have no (legal) value? What are your thoughts? Am I completely wrong here or what?

also, first post!  ;D

I highly doubt they will be flat-out illegal to possess or use. Barter is 100% legal in the United States.  They will certainly never be illegal worldwide. In the US, at worst, they may become illegal to purchase or sell with bank transfers or credit cards, a la internet poker. Or, even more likely, you'll see people prosecuted for not paying taxes owed on Bitcoin income. But you will still have people willing to exchange goods and services for them.

What happens when Bittorrent is illegalized in the whole world?

Let's say they're determined to close it down. They could port scan every IP in the US and put people running the software in jail. Then you switch from raw TCP connections to Tor or something like that. The Government would need to be extremely repressive in order to stop BitCoin. As in putting people in Jail, for running some software.

That's the nice thing about being decentralized. At most they can close Mt. Gox, but then another mtgox will open somwhere else. In fact, Mt Gox is the Achilles' heel at the moment.

From wikipedia: Remittances totaled US$414 billion in 2009.

You know how much Western Union charges? At what rates?

There are whole countries living of providing the service Bitcoin provides. People actually fly to this places to store their money.

From wikipedia:  Tax havens have 1.2% of the world's population and hold 26% of the world's wealth, including 31% of the net profits of United States multinationals.

Someone, somwhere, will allow you to exchange Bitcoins. Be it in Japan, Switzerland, Isle of man, or Sealand. It will boom and crash, but it's too convenient to completely fail. It just must fly under the radar long enough.

Don't get me wrong, I love the idea, but...

I realize that governments wont be able to enforce a world wide ban to any great effect. However the can still make sure that bank transfers etc. cannot be made to buy/sell bitcoins. And if you can't buy/sell them for real currencies on a site like mtgox, whats the use of mtgox? Also, if bitcoins cannot be tied to a real currency, how would you know the value of it? How could anyone decide on what the value is without an exchange?
 

So I could just set up an account in Switzerland and trade bitcoins legally? And then transfer them back to my home country? Somehow this sounds a bit like money laundering.

Thats why people should start pledging to "colonization of Mars by bitcoin users" project... ;)

  If mtgox is shut down, something else will be available.

Outlawing bank transfers for bitcoin in the US will not stop the exchange of bitcoins for dollars. It won't even make it illegal to exchange Bitcoins for dollars. You could still sell Bitcoins for cash/check/moneyorder or gift cards in the mail, or goods or services.





You will still be able to trade Bitcoins for dollars in the US. Barter is 100% legal.

Why do you need to "tie" bitcoins to an alternate currency? This is an issue that is hard to overcome and wrap your head around and yes I fall for it sometimes too. The value of a bitcoin should never be based on some other currency although it almost always is. You need to look at the value of a bitcoin because you can trade it for some good or service directly without exchanging it for another currency. Once you can trade bitcoins for enough goods or services that you can live your life without participating in another currency then Bitcoin has won.

Buying BTC isn't illegal today.

Most Western nations prohibit the passing of ex post facto laws (http://en.wikipedia.org/wiki/Ex_post_facto_law) in their constitutions, so whatever the legal status of Bitcoin may be in future, you cannot be prosectuted for buying them today if you live in one of those countries.

As soon as your country illegalizes Bitcoin flat-out (unlikely IMO) you will have to destroy all your BTC of course.

The best way to destroy your BTC is to encrypt your wallet.dat with a really long password and to then to forget the password.  One day your government might lighten up and decriminalize Bitcoin and then maybe you'll remember your password again out of sheer joy, who knows?  :)

Careful though,  forgetting passwords is illegal (http://en.wikipedia.org/wiki/Key_disclosure_law) in some countries.  

If bitcoin is ever made illegal worldwide, I'll just hope international organized crime will have already started to use it and offer a shadow exchange service.

But if governments prohibit the possession and selling of bitcoins (much like illegal drugs), would you still be able to trade them?
(would they? I think so, seeing what bitcoins could be used for)

I'm not quite sure how barter would work for bitcoins, but whatever.

Prohibition on the possession of Bitcoins in the US is extremely, extremely unlikely. There is no reason they could outlaw Bitcoin that would not also apply to cash.

Every Bitcoin transaction is barter from the government's perspective.

Good point. But how would you decide the value? Would that be up to each individual trader or what? Clearly this will not work in a global environment...

I'm quite pessimistic about this as well. 99% of the rest of the world has more liberal drug laws than the US; hell, even possession of "drug paraphernalia" is illegal in some of the states (it's perfectly legal just about everywhere else). And like it or not, the US right wing loonies can instill a lot of legistlation practically everywhere through international treaties (and the $billions they pour into their propaganda machine). And bitcoin is not important enough that a significant portion of the rest of the world would resist.

I count on the fact that strict enforcement of any law that is as ambiguous as a ban on bitcoins is going to be impossible to enforce. If bitcoin becomes a significant factor in anything, we will have a "war against money laundering", a lot like the war against drugs or the war against terrorism; civil rights will be further repressed but the stated objective of the legistlation will not be reached in any significant degree.

The same way the value of the dollar is decided. By buyers and sellers agreeing on prices. Clearly it does work.

One possibility would be to keep using BitCoin over anon networks transport.

I think our project fits well here - BtcFn (bitcoin-over-freenet and other crypto networks).
http://bitcointalk.org/index.php?topic=7181.0

Of course it will work globally. And yes, you decide the value individually. What is the most common outcome when an individual allows/trusts someone else (central authority) to decide the value of a currency? Why not place that responsibility in your own hands. Do you really need someone else to tell you what the value of your currency is so you can plan how to spend it? If so then stick with a fiat currency and all is well.

If trader A knows he can buy screws/nuts to create his widgets using bitcoins and trader B wants a widget and will pay for it using bitcoins there is no reason for anyone else to be involved in completing that transaction nor does anyone else need to set a price for the widget. If a third party enters into that transaction they will most definitely want their cut for whatever efforts they claim to have contributed.

Ok, so I'm going a bit off topic here but there would also be an issue where people can't know what other traders are setting prices at (because those kinds of websites are illegal). If you are going to buy something in a competitive market then you usually research which alternative gets you the most bang for your buck. How would this be accomplished?

Look at what price in Bitcoin things are being sold at anywhere in the world, look up the dollar value of those goods being sold for Bitcoin, and there's your going market rate. Even if Bitcoin becomes 100% illegal and subject to a bloated federal War on Bitcoin, it will still be legal for people to publish going exchange rates.

NOOO! Everything about it must become illegal, you won't even be able to speak of it. ILLEGAL I SAY, ILLEGAL!!!

ok, enough pessimism for today, thanks for all the replies  ;)

It doesn't matter if it's illegal.  It becomes illegal, then a IRC Tor channel complete with a trust system like OTC pops up, and people still trade with them.  You send me BTC, I send you Dwolla or Paypal, with a note saying "thanks for painting my house" or something, or hell, I just mail you a prepaid debit card.  The thing about Bitcoin is that it CAN'T be stopped, so it really just doesn't even matter if they try.

What happens when an asteroid hits every national capital all on the same day?

If bitcoins are illegal in us, then:
https://i.imgur.com/PWjYS.png

If bitcoins are illegal in the entire world, then:
https://i.imgur.com/DnNXV.png

Note: illegalization of bitcoin will help with distribution of water to many landlocked countries whilst flooding others out of existence due to the rapid spread of alpaca sock-wearing cryptoterrorism

If that doesn't work, then:
https://i.imgur.com/JZpJD.png

Yay, Antarctica is still left! I hope alpaca socks are warm

Another "illegal" strawman troll I see .... what's that about the fifth one today?

Bitcoin is dangerous for every state in existence today . So i'm certain at some point soon there will be steps taken against it.

Possible scenarios : People chicken out and quit using Bitcoins

                            People don't chicken out and fight back ... this can be either finding holes in the legislation , going underground , and/or even terrorism.


And from what i saw so far people that are using Bitcoins mostly aren't speculators , they are people that really think bitcoins are a way to acquire freedom. Sure bitcoins brings a lot of "dangers" to society today , like paying taxes if you want to pay , like paying anonymously for drugs , sex , guns , murder , cloning , etc. States should start to reevaluate their way of doing business . Bitcoins will bring times when people won't afford to remain ignorant to politics or company/individual behavior and that is a great thing.

Why not?

You don't have to do stuff that's illegal just because you are anti-establishment. I have no intention of skirting the law with Botcoin, because I generally don't feel that the law stops me from doing anything I want to do (and in particular, I feel taxes are OK)

Laws are nothing but the opinions of violent people backed up by violent threats. Most of them ought to be broken as often as possible. Especially since most of them are about preserving the power of those violent people, and with it, their ability to literally get away with mass murder, theft, and fraud.

You're right you don't have to do illegal things if you are anti-establishment. But if you don't, you're not very consistent.

Im know im rehashing the same old ideas, but bitcoin will never
be shut down even if the US criminalizes it and starts prosecuting users
as long as a copy of the source is available people will use it.

The only real threat in my opinion to bitcoin is if the
US or another government decides to drop billions of dollars of buying
enough computing power to take over the network, but then sowhat?
we can always start another.

Precisely. It's like the Boston Tea Party in 1773. THAT was illegal as well. At some point people just say no, and if there are plenty of us we'll win. Bitcoins is Boston Tea Party part II. The only difference this time is that we throw the US dollar overboard :)

Ok, someone has to say it: the word is "criminalized" not "illegalized".

OK so a lot of people think that if bitcoins become criminalized they will drop in value.

An interesting theory, however..  can you think of any other good or service that drops in value post-criminalization? 

If bitcoins became illegal I'd just move my stash over seas and wait it out.  With bitcoin, moving it around is really easy.

If that happens, we will transfer them using short wave radio! :D

this thread may be approaching the matter from the wrong direction.

has it occurred to anybody that probably the most effective way to stop Bitcoin would be to end cash?

governments hate it anyway - printing the stuff is a huge loss.  it fosters hidden income, and untaxed transactions.  and the electronic payment systems (visa, etc.) already in place could easily handle the extra workload.

what happens to something like Bitcoin if governments phase out cash, and decree pay-by-wave, phone-to-phone and bank cards?  maybe keeping coinage for gum machines and laundromats.  that strikes me as a much more likely scenario.  instead of being issued a social security number at birth (like in the US today), you are issued a bank card number.

in a case like that, all the advantages of Bitcoin would go away unless merchants were actually willing to accept raw (i.e., non-exchanged) Bitcoin.  which at that point would be unlikely, no?

The chief advantage of bitcoin is its resistance to inflation and the lack of centralized control. If governments want to compete with bitcoin on those fronts, they will need to stop being governments.

.
Valuable topic.  Thank you, Simme101 for starting this line of discussion.  Worth thinking about carefully:  e-Gold and Liberty Dollar started off with much enthusiasm, but they are no longer with us.

But e-Gold and Liberty Dollar were easy to attack.  Everyone here knows the situation: They had physical locations and human presence, while Bitcoin is designed to avoid that.

Bitcoin looks more like Hawala.  Hawala is either outright illegal or highly discouraged most every place that it exists.  And yet it has endured for 1,200 years.  May Bitcoin do so well!

Reference link: http://en.wikipedia.org/wiki/Hawala (http://en.wikipedia.org/wiki/Hawala)

;D I knew I would get my day to join them in spirit! 

Bitcoin -  The new Boston Tea Party. 

What happens when illegal drugs are illegalized in the whole world?





 ::)ppl still do them!

Bittorrent is not a threat to the very source of the power of the economic elites of the world. Currency creation and manipulation is. So expect a 1 million times stronger reaction to something that puts their power in danger.

"Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits (money out of thin air), and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits (money out of thin air)." — SIR JOSIAH STAMP, (President of the Bank of England in the 1920's, the second richest man in Britain)

"Give me control of a nation's money and I care not who makes it's laws"— Mayer Amschel Bauer Rothschild


Plenty of drugs for the people is part of their agenda, in fact drugs keep the masses content and unconsious in their slavery. Google recent news on big global banks financing drug lords in mexico.




 

There is HUGE market demand for a currency like bitcoin. This abstract force is beyond any government to stop, without destroying itself in the process.

And gosh, I sure do hope it tries.

I really doubt the government of major countries like the US, the UK, Germany, France, or other european countries would ban bitcoin, plus it would be hard without blocking ALL peers outside of their country, and that would pretty much make the government hated and destroy their internet, so I doubt they would.