Bitcoin Forum

I'm trying to decide if it would destroy bitcoin entirely, or make it even more valuable. any thoughts?

initially it would plummet and then recover rapidly i think

many americans would sell thinking they could not cash in their now "illegal" assets

but the international community would buy like crazy if the prices dropped

it would take more than "declaring it illegal" to stop it, it would take regulation and enforcement.
sheesh US govt cant stop a very long list of illegal stuff already -like stuff that literally harms its citizens- I cant see them magically succeed against Bitcoin ;)
track records speak a lot :)

i think it's very likely that the US govt could take action against bitcoin with claims that it funds terrorism and criminals. I'm just wondering if that would actually hurt bitcoin or help it, kinda like the prohibition. I'm assuming that it would only help bitcoin because, if they wanted to, they could have already taken action.

If you look at the current trend of things deemed illegal then bitcoin price would skyrocket.

At the end we could end up with a silkroad type of exchange.

there must be some hub that dispenses the fiat though .currency has to enter and leave the bitcoin world somehow so that would be its weakest point

sorry, but I would like to remind people that Bitcoin is a global thing
iirc most Bitcoin exchanges aren't US based

oh and I prefer to exchange my BTC for goods and services where possible and vice-versa, rather than cash out :)

Yes, cash deposit and likely OTC style would become the norm. There is no way to prevent that unless the world banks deny all cash deposits which would in effect create no cashflow for themself.

So in order to shutdown bitcoin for fiat then banks must stop operating.

I know. That's why i specified "in the USA" in the title of this thread.  I'm not even American.

Hoho, the government shold have known this: http://en.wikipedia.org/wiki/Streisand_effect Previously uninformed people are gonna get really curious as soon as the ban is proclaimed "Hmmm, how dangerous is this thing called Bitcoin that Feds have to go all the way to ban it? I should have a look........"

Those from the government who have realized that Bitcoin cannot be controlled are likely buying bitcoins like crazy.

lol, +1

Do you think the non US exchanges are really up for the job? How much volume do they do all added together?

Are you under the impression that K.K. Tibanne (k.a. MtGox) is a US company? I hate to break the news on you, but the US is not the center of the world.

sarcasm.

There wouldn't be any 'slack' to take up if all the US markets left. People know better than to try new shit in the 'free states'.

I hope they declare it illegal. Then I can start dealing.

But really, I can't see how a ban can be constitutional. You don't "own" bitcoins, you have knowledge that lets you access them. Would it be illegal for me to know the combination to a safe full of heroin, that I have never visited, and then tell somebody else the combination, who tells somebody else the combination?

I suppose they could make it illegal to broadcast signed transactions (TOR integration ftw). But even then, it would be totally unprecedented. My guess is that nerds, libertarians, corporations, and media who previously had nothing to do with bitcoin would come out of the woodwork to stand up for it.

Oh, and the price would go way up IMO.

I think the price would go down quite a bit. Bitcoin would be much less useful if a large portion of its users needed to deal with it under the radar. Gavin and some other developers would probably stop working on the code, as well.

This is unlike drug prices. People want cocaine, but no one really wants bitcoins. People want to use bitcoins. If it's less easy to use BTC, BTC is less valuable.

An outright ban on Bitcoin seems unlikely, though.

I don't know what would happen to US demand, it would probably depend on the way they make it illegal, go after businesses or individuals and how hard etc. But it would be huge publicity both in the US and the rest of the world. The net effect on price has to be up imo.

I don't know what Gavin would do, but I saw a picture of him burning money and he seems like a badass, so maybe he would cash in a few coins and get a flight to Curitiba. The world is a big place.

You could say the many of those same things about online banking ,you dont physicaly have the notes and coins
you only have an access code to them
the code controls numbers on a database
your access code can be used to change the numbers on the database to credit someone else ,who can then credit someone else

and the only thing that counts  is the database change ,a bit like the blockchain

if the GOVT wanted to ban BTC they probably could not ,but they could make it so difficult to use most people just wouldnt bother

 

A historic example about suppression of non-Fiat currency:
http://www.youtube.com/watch?v=UzJ_Pph8jGk&feature=player_detailpage#t=447s

Was not of much use, apparently.

The so called black market is not easy, but it is huge and constantly expanding.

People do not want Bitcoin, people need Bitcoin.

I'm not sure what it is they could make illegal.
The word 'Bitcoin' associated with your activity wouldn't be enough. The word is arbitrary and made up.
All cryptographic tokens of exchange? They'd have to ban all cryptography (which they tried with PGP)^{[not banned, but you know what I mean]}

They could only make it illegal for a business to set up an exchange based in the US.
Someone in the Isle of Man then opens an exchange with the full backing of the Isle of Man governemnt. You then legally make an international money transfer.
They are never going make international money transfers illegal., as they know the more restrictions they place on the flow of money the more problems their economy will face.

If every country in the world can be persuaded then maybe it can be banned, but even that wouldn't be enough, since people using bitcoins are not on the whole doing anything obviously immoral - and if they are it's their immoral/illegal behaviour that will face the law - not their use of Bitcoin.

I think if US makes bitcoin illegal. Only will increase popularity because of all media cover it would get.
+ not many laws work as they intended if people don't think its a crime ;)

Bitcoin will not be made illegal anytime soon.  First we will see banks refuse to work with exchanges at the direction of the US government, which will effectively shut them down and crash the price.  The power of the US government over the world's financial systems is enormous, but it's influence is much lower in states like Russia and Iran.  Bitcoin will need these states to get on board with it.

they won't make anything illegal unless they know they can actually enforce it otherwise the black eye would be politically suicidal.  since they can't enforce it, they won't make it illegal.

How's that been working out for drugs?

If they decide to shut down MtGox, you can say bye bye to most of Bitcoin's value in an instant.

If they shut down MtGox
I'm going to get pissed off, and code you an exchange that runs on the draknet.
Try and stop me team america world police

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I don't think that the US would take this action unless they ('we' in my case) were pretty serious about stopping it as much as possible.  In that case we'd probably leverage our position of global leadership and the rest of the world would for the most part snap to.  "If you're not with us, your with the terrorists."...haven't you heard?  That's the advantage of having the rest of the world being either our toadies (e.g., Australia...our "Sheriff in the South" <snicker>) or are intimidated and cowed.  In the case of Iran and the sanctions, for instance, many countries actually desperately need their oil.  Noting this (and thus the extreme difficulty in fully exercising our will on them because of it) we grant by our graciousness special exemptions to anyone who would be forced to break our rules that is.  In the case of Bitcoin I would bet that it would be the opposite in that most governments would welcome the excuse to clamp down.

---

More to the point of the OP, though, I think a clamp-down is possible and that it would severely limit the number of participants in the economy and also the number and nature of transactions they perform.  This could take the strain off Bitcoin in terms of block chain bloat and induce engineering efforts toward hardening the solution against various kinds of anti-use attacks.  It may not even really effect the fiat/BTC ratios that much and may even send them higher faster.

Touche.  But at least they can make some headway from time to time against drugs.  How much success would they have against Bitcoin?  Seriously.

Other exchanges would take over.

Lots, considering that they can ban all exchanges in the US and EU and extend it over all Euro and Dollar bank transactions. Without that, Bitcoin would be missing lots of liquidity.

I don't see how other exchanges could take over in that case. They would have to be completely anonymous and that would be a huge cost and hassle.

Luckily, governments are so slow and retarded that by the time they would crack down on Bitcoin, it would already be established. But if they did it NOW, I don't think Bitcoin could retain most of its value and it'd have a hard time getting bootstrapped.

Ditto with the earlier poster:  I think the price would go down quite a bit.

Sure, the exchanges aren't in USA, but the bank accounts of most of the customers are.  All it would take is a government not permitting banks to do business with the exchanges by branding them "sponsors of terror" and few users will want to deal with the inconvenience.  The US growth, which is most of the engine of growth, would die quickly because it would become too inconvenient for potential new users to buy coins to use for regular transactions.  It could live on in other countries, but it would set it back several years in terms of valuation and usefulness to the current users...

Exchanges would become mostly irrelevant as people trade goods for bitcoin and bitcoin for goods.  "Buying in" is a black market business, and thus carries a high "exchange rate".

If history is any guide, officials in China will start enforcing Bitcoin ban much earlier than their comrades in the US do. The Chinese have law on their book giving the authorities all the power to ban anything on the Internet if/when they want to. OTOH, if the communist party decide to do it, who needs the law anyway? 

For the US to ban Bitcoin, the socialist elites will have to start with a propaganda campaign, painting Bitcoin as a money of terrorist and criminals (instead of people's money as many believe) ... then there is the legislation process... there will be challenges in the court rooms ... not an easy trick
 

Back to 10k BTC for a pizza.

Exchanges increase liquidity, liquidity increase usefulness and usefulness increases valuation. Deal with it. Bitcoins are mainly speculative right now with a drop of Silk Road, so if that goes, so goes most of Bitcoin's value.

Bitcoins are not like drugs because drugs have intrinsic value. If Bitcoin does its job of conducting transactions more cumbersome, then there's no reason to value it higher.

The best way to prevent Bitcoin being declared illegal in the USA or other jurisdiction is to make it broadly useful.  Quite often people point to Silk Road as a successful use of bitcoins.  That's a great example, but it's also a highly destructive one.  Imagine standing up in court and saying bitcoin is great because it allows users to trade highly illegal substances with much lower chances of being caught.

Bitcoin needs to move beyond being a method to pay for drugs, highly speculative investment, a means to gamble, and launder money.  Yes, people use it to buy snacks and trinkets, but the high value uses for bitcoin also tend to be illegal in many countries around the world.

Without a clear definition of what Bitcoin is, it would be hard to make it illegal. But if it was, it could morph into so many forms it would take a full time Federal Department of Whack-a-Mole to chase down every new form that Bitcoin manifests.

Reads like 19mzL3cAeuSdV76JSusNWBvDQaxMuihQKR to me

Two words - Striesand Effect.

https://en.wikipedia.org/wiki/Streisand_effect

Also, since bitcoin is international in scope - good luck censoring all communications on the globe to 'shut it down'.

Bitcoin is here to stay.

A better comparison would be bittorrent.

How's that been working out for bittorent? I'm sure government/lobbyists would just love to shut down bittorrent. They would love to outlaw it if only they could enforce the ban. But that ban would not be even remotely enforcible, and they know that. Drug laws are at least somewhat enforcible.

Also, bittorrent pisses off a lot more bigwigs, at the moment, than bitcoin does. Yet it continues to thrive, as it changes the world. I'm sure that when bittorrent first hit the scene, these same conversations were taking place.

This I doubt would be as significant a problem as you suggest although it would certainly have some influence.

For one, working on code covertly is vastly easier than running a business of any volume covertly.  People who have a hope of making a worthwhile contribution to something like Bitcoin would have close to zero trouble doing so anonymously.

For two, a robust government attack on something like Bitcoin would be such a blatant display of fascism that it would likely stir the ire of a lot of highly intelligent people.  If might even increase the level of interest from highly talented technical people...like when so many people left Europe for New Mexico to work on a nuclear bomb on behalf of a government which they felt was the most promising at the time.

It is true that there is some utility in knowing who Gavin is and being able to meet him in person if desired and that may be lost but the loss would be completely understandable in the face of an organized legal attack.

Would this scenario be similar to the Gold Reserve Act (https://en.wikipedia.org/wiki/Gold_Reserve_Act) of 1934?

BTW does anyone know the current status of the Gold Reserve Act? Is it actually illegal for people in the US to own/trade gold?

The limitation on gold ownership in the U.S. was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars and certificates by an act of Congress codified in Pub.L. 93-373 which went into effect December 31, 1974

read down in
http://en.wikipedia.org/wiki/Executive_Order_6102
for that quote.

re: OP I think that the US is not the financial beast it once was and is still declining rapidly in that aspect so that the effect on the price of BTC might not be nearly what people would fear.

Thralen

From the same wiki page

Let's help them out. How would *you* write the law making Bitcoin illegal? I guess it would require a definition to label it. It would also need an action that would be observable. I'm just wondering how it can be done without making teaching math itself illegal.

"It is illegal to transfer Bitcoins"

writing the law is easy... enforcing it would be harder.

why look week by passing a law you know you will fail to enforce?

Relabel: BitUnits

edit: and at the pace of government that'll buy us at least 6 years.

This will be the new logo  :-X

plus

how are they going to look when they once again STEAL OUR MONEY!

when are people going to get mad?

"Participating in ownership of transfer of Bitcoin is aids and abets terrorism, threatens national security, and the perpetrator is classified as an enemy combatant in the global war on terror and is treated according to current protocols on the matter."

I may or may not need to remind people that currently in the US 'enemy combatants' no matter what their nationality and location are subject to extra-judicial actions up to and including execution.

There will probably be a golden window where very few people understand Bitcoin and are involved in it.  That could be the best opportunity for a severe clampdown as the vast majority of the population would buy any story-line (particularly after a few false-flag events) and very few families would have a family member who was neutralized.

In spite of my paranoid ramblings on this topic, I think it unlikely that things will get 'that bad' and indeed it is likely that nothing will happen at all.  But if I were charged with the engineering challenge quashing Bitcoin in a no-holds-barred type of way, I think that would be the most effective way to do it.  We (the US) already have the infrastructure in place for such operations after all, and since building up the infrastructure has been politically costly I am guessing that there was an offsetting reason for getting things set up.

the satan spawn Mitt Romney needs bitcoins to get the financial support he needs and to buy more jetskis and buy bombs anonymously to drop on muslims.

Sure, if they want Bitcoin to make the headlines of the international press every other day for the next few years, that's the way to go.

If they want the Pirate Party in Europe to dominate European politics, that's the way to go.

If they want Bitcoin to become the 2nd official currency of Venezuela and a number of other countries, that's the way to go.

I don't see a mechanism by which your projections are the likely outcome of a dedicated crackdown on Bitcoin by the US.  Particularly because the European states are our vassals which will dance to whatever tune we call, and in the case of Venezuela we're going to need an excuse to go marching in at some point when we've finished up obtaining Iran's oil producing holdings.

I do theorize that a crackdown on Bitcoin would be good for my Bitcoin speculative investment in terms of long term payout but partly because my projections of what would likely happen in most other parts of the world are about 180 degrees from yours.

More importantly, I think such a crackdown would help Bitcoin achieve a certain very important utility which may or may not have been a goal of the designer.  That is to point out to the populations that there are monetary alternatives to ones which might otherwise be presented as the only possible solution (upon the collapse of our current fiat regimes.)

Did you have problems with megalomania earlier?

To answer your question even though I fail to see how it fit's into this particular conversation:  Not that I'm aware of or that anyone has mentioned to me.  My propensity to call it like I see it has been noted by others from time to time.

I suggest not to visit certain European nations, then, particularly France. Their hospitality may cool down considerably if you call them vassals.

Ya, I know...The truth tends to be particularly painful.  Why don't you people get a strong leadership like the Ecuadorian people did if you don't like being perceived as our tools?  Or just keep getting blown up in Afghanistan.  Your choice.

I think it would work about as well as making file sharing illegal. Good luck!  :-*

The same thing that happened when the usa outlawed alcohol, it disappeared for good never to be seen or used ever again.   ::)

The substantive difference is that a huge number of people use and appreciate filesharing.  With Bitcoin, only a tiny fraction of people have even heard of it, and a majority of those who have have a pretty negative impression of it (which is likely no accident.)  So, obviously, the impact and 'marketing potential' of a crackdown would differ significantly between Bitcoin and various forms of filesharing.

The press has a hard time sympathizing with Kim Schmitz - he is a convicted criminal. But what if the US would use up huge resources to go after - 13 year old school boys running a miner on their game PC. The press is going to like this.

You forget that Bitcoin is decentralized. You have to work really hard and you need the collaboration of the ISPs to go after all those schoolboys. The ISPs are not going to like it. If Police comes to me with something like this, I will cooperate very willingly. But I will make sure that their faces will make the front page.

Lol!  nice description.  and those same schoolboys will grow up to be the new leaders of our country.  i can't wait.  i wonder what they'll say to all these debt commitments the boomers have foisted upon them? ;)

Thanks cypherdoc! I should add that I do not think anything like pilloring the police is necessary here. This is Bavaria. Bavaria may be a vassal of the USA, but I think I'll invite them to the canteen (which is indistinguishable from a beer garden in summer) and we have a round of wheat beer. I'll explain Bitcoin to them and what they are going to catch is mainly 13 year old school boys. 17 year old school boys using their mined Bitcoins to get pot on SR, if they are really, really lucky. So I'll suggest them to write a report that Bitcoin is too heavily encrypted to trace port 8333 and take another wheat beer.

Guys.  You can't make software illegal (well maybe viruses and trojans).  You can't make using a particular TCP/IP port illegal.

If through some freak of nature something like this happened all the activity would simply be driven to TOR or something like it.  The world is full of clever people who would come up with hundreds of strategies to obfuscate BTC traffic if TOR didn't work for som reason.

are you having beers with the same cops protecting wall street thieves?

It is relatively straightforward to limit utilization of certain things.  Kiddie porn is a good example.  While I agree that dedicated and knowledgeable (and brave and/or desperate) people would always have the capability of using Bitcoin, a clampdown would significantly modulate the makeup of the user-base and the count of said.  That, in turn, would dramatically change the direction and trajectory of the solution.

Frankly, I don't think they send NYPD policemen to Munich to arrest 13 year old school boys for running a Bitcoin miner. But then, the US is known to wage war on a lot of things. Why not on Bavarian school boys running Bitcoin miners on their game PC.

This is America, after all, the Land Of The Free (TM)

I thought of this but CP isn't a good example.  I can only speak for the US but authorities have to actually see CP (or illegal music files etc) on your computer or receive CP from you before they can act.  Merely running file sharing software like uTorrent, LimeWire etc isn't illegal.

The legal system would have to go beyond current limits to do what you say.  It's like saying that they can ban the use of port 8333 and if you're caught using it they can get a search warrant.  Impossible.

;D spit-take

I have not studied the cat-n-mouse game involving kiddie porn since the product is not an interest of mine.  I do know that in spite of a fair amount of time spent looking at internet porn I very rarely happen across it.  Basically never these days.  Thanks for the info on the subject though as it helps understand the game more generally which is useful.  A bit unnerving also as I suspect that it would not be terribly challenging to trick people into sending Bitcoin to an undercover entity.

As for what is possible and impossible, I suspect you may be mis-estimating.  This in light of the ability to execute citizens abroad (and other people nearby) without trial which would have seemed similarly impossible not long ago.  Also in light of focused efforts to enact 'internet kill switch' capabilities and development of the associated infrastructure.

Disclaimer: Any knowledge I have on the subject of illegal content is purely from reading slashdot and similar sources.  I have a nerdy legal interest in the interaction of technology and peoples' rights.

You do sound a bit agitated for a person who has no concern about the government's ability to manage the internet related activities of it's citizens.  Just say'in...

My "agitation" comes from my passion for civil liberty issues in modern society.  Being able to photograph or record police.  Being free from continuous monitoring and surveillance.  The issues go on and on.  Most people don't care about their civil rights until they're gone.  Along the way they were willing to give up little bits of civil rights to feel "safer".

Mine also FWIW.

or maybe he knows the gov't doesnt really have as much power as you think to manage smarter internet users/hackers.

Two 'Huh?'s do not a 'Bingo!' make.

Firstly, I have mentioned on this thread that I've no doubt that a fraction of persons will have no troubles using Bitcoin in almost any circumstance.  Just that a much larger fraction could, and that could change Bitcoin significantly (_if_ a decision to try to quash Bitcoin through restrictions is made.)

Secondly, they guy is clearly documenting a disavowment of any potential wrongdoing.  In case he get's hauled in before the people's court of bitcointalk.org ya think?  I doubt that and read this as a concern over possible future hassles complements of government (who he (and you) seem to be claiming are toothless.)  Me suspects that the guy is concerned that his rattlings are documented and analyzed...and me suspects that he is 100% correct to be.

Quid? What the hell are you talking about?

I was talking about how the U.S. absorbed 3500 tons of Germany's gold and how they'll never see it again and are unlikely to say jack shit about it.  Such is the role of a vassal state before its' master.  Sorry if I was not clear.

I read a funny headline indicating that some wiener from Germany recently showed up to check up on their stash and make sure that Soviets hadn't gotten it yet and was told to take a hike.  Didn't read the story though.

That may be right - I suspect that gold hanging around the necks of beautiful (or less beautiful) Indian women, along with the 8000 tons of gold of the US. Must be a reason why Ron Paul can't see the gold and the Bundesbank doesn't want to.

We may be vile but we're not stupid.  I suspect that the needing to dig into our own stash significantly will be the marker where we consider the cow to be dry and the time ripe to move on the the next monetary system.  Give or take a few years depending on election cycles, homeland security project progress, and other such considerations.