We have laws in the EU for the proceeds of crime, so if the money was gained due to a criminal act, the government can seize it!

I would assume that would be true for their bitcoins as well!

Of course, getting access to a brain wallet is a different matter!

The fact a law exists, doesn't mean its enforceable!

I think its extremely important to think about being able to scale to this size because all the evidence from other forms of digital adaptation has shown a far higher rate of operation, once its become an option.

e.g. the number of ebooks that now exist since ebook readers became popular, think how much more people download as soon as their internet speeds up.  

We are also forgetting the current off network transactions.

If you are spending cash, its an offline transaction which most likely isn't recorded anywhere meaningful.
Give people the option to have a digital wallet and then its only possible to do online transactions - the number of online transactions is going to grow exponentially - especially when movements from one wallet to another is also considered a transaction.  
We shouldn't consider forecasting the future using only what we know today and adding time.  We have to put in some extra thinking!

100tps is a good target!

The biggest problem is that this is seen as a financial product or sorts.
If it was a virtual product, like a phone credit, it would not have to go through all these hoops in Europe.

Maybe the real answer is that as users with a drive to make bitcoin work in the UK and the EU, its up to us to define its position, rather than wait for the banks and government to do it for us?

If we are calling it a currency, its financial, and its going to be regulated to death.

If we call it an e-commerce voucher, the cat is still in the bag?

This might have legs?

Think about it, how would you stop bitcoin?

Firstly, you would highlight all the bad reasons people use bitcoin (Silk Road etc) then you would highlight how the political beliefs of the biggest users were all anti government types.

The next step is to create a mistrust of how it would work in conjunction with the current system. Would people suddenly lose all the benefits they already have? Would society actually be damaged if bitcoin was to be popular?  Would people stop paying taxes, and would the government quickly go bust?  Would this lead to the country being at the mercy of its enemies?

A few articles in the national papers asking this questions would certainly create enough distrust of bitcoin to stop anyone thinking its was a good honest idea for a good honest working person to get involved with.

Finally, the government would require all bitcoin exchanges to be qualified members of the financial industry and be fully compliant with every rules required by international banks.

This would not make bitcoin illegal, but it would stop it growing.

Governments prefer to control people than to ban them.  They learnt that didn't work with the drug industry.  They won't make that mistake twice!

As a UK based bitcoin enthusiast, and someone with a number of years as a business advisor, I have been looking at the UK bitcoin market to find a way to take advantage of the opportunity.

The biggest problem is that the UK is getting very risk averse and so anything which can be regulated, tends to get regulated as soon as someone can lobby for it.  Its getting very expensive to get into any market which involves anything to do with the finance industry. It is possible to start up under the branding of a partner, however, with no such regulations for bitcoin, its a bit of a zombie industry.

I would like to see if its possible to start an exchange based on bitcoin trading being entertainment and gaming, but that then puts you under the gambling regulations, which are possibly even harder to work with!

The main problem with the UK is that it has two masters.  The EU sets its directives, and UK agencies interpret them into laws and policies.  When it comes to business, bosses have to worry about satisfying both the local enforcing agencies as well as national agencies; all of them have to find things to get involve with to justify their funding - allegedly!

Running a business in the UK is hard work!

There are many ways to look at what happened here.

How about, the banks were declared bankrupt, and the EU insured the accounts of those with less than €100K?

Anyone with any knowledge of the EU banking rules would have made sure they put their money into multiple accounts with less that the max amount in each ages ago.

Not a bad deal over all?

When politicians get involved in anything that looks like business, strange things happen!

I'm in Chester.

I'm also on localbitcoins.

PM for more details

Interest is a perfectly valid way of making money with a currency!
The 0.1btc comes from the person who borrowed it, just like in the old days of banking!

This is real life verses ideology and it does show one of the problems with bitcoin.

Its not bitcoin, but the attitude of early adopters, which is very similar to some inventors, where they are holding out for a future that never happens, and kills the moment where they could make a difference.

Money is not for saving, its for spending. Having a store of potential spending is not going to help anyone.  However, that isn't a Keynesian idea, its basic economics. What Keynesians do is borrow other people's money to spend, and when they run out of that, then the trouble really starts!

However, saving isn't a bad idea, the problem is actually the same problem that Krugman missed which is that its not the bitcoins which are good for saving, its their relationship with fiat that makes them valuable.

The only element of the original Krugman quote that seriously needs looking at again is the idea of lending not being possible, and with this I think he is wrong.  Mostly because he is not thinking outside the box.  You can lend bitcoins at a very low level of interest, but only if you don't want to work with a different currency as well. 

Borrow 1 BTC, and pay back 1.1BTC can work over any time.

Ironically, while a large number of bitcoiners are ranting for the end of fiat, without the exchange rate, bitcoin would be more useful. 

How we solve that problem is beyond me at this time on a Saturday!

Excellent article!

This is a thread for the history books - an early example of what might kill bitcoins in the future.

While I can understand why the OP is annoyed, the simple truth is that a deal is a deal in time as well as in legal tender.

Buying and selling in bitcoins can only work if the price is set using a fixed exchange based on time.

If this means that bitcoin doesn't become a currency, then we will have lost a lot of the potential which is currently driving the market.

That would be a shame

;(

Very disappointing coverage - especially in that the core USP were not covered in any depth and we ended with a feeling that they were a big silly.

Not that I would expect anything else from the BBC, this is how they operate.

The BBC is the most advanced propaganda machine on the planet - they were the inspiration behind George Orwell's 1984.

What they have done with this story is prove that they have not censored bitcoins, and given the subject a fair amount of airtime with a financial expert.  By leaving out the questions that would have revealed why the growth is potentially justified, they have ensured that most listeners are satisfied with the result of the coverage they got - that its just a fad, and nothing to be taken to seriously.

That is what the European Union would want its residents to think, and the BBC delivered!

Well done, Auntie!

That is a phenomenal idea, especially for regions who have to use money they have no control of - like maybe a Euroblock country, or a US state.

Looking at it practically, if you had an area with let's say, 4 million people, but their currency was being issued by a central bank somewhere, these people could use the regional crypto coins for their day to day purchasing, while letting the government carry on using fiat. Each person would have a few bitcoins, and the cap value of the coins wouldn't go to much more than gold today.  Assuming that once people had paid their taxes, their pay packet would be converted to bitcoins.  It would be a win / win because the government auditors wouldn't get upset, as they could still print out money to make the books balance, while the people were not going to get taxed by stealth inflation!

Its far too sensible to be legal!

There are a number of interesting elements of the bitcoin code which doesn't make sense to someone who just reads the forums.
I know the transaction limit is throttled, and I would guess a number of other elements of the scaling that we are currently discussing is more about power than technology.

Read the original paper, the mail archive and the wiki carefully, and a totally different picture of the potential of bitcoin emerges - one that could easily be a worthy alternative to the global credit card market.

However, taking your investment advice from a few very vague comments on a forum without other info seems stupid!

LOL +1

It will hit $70 today, but in all honesty, I want it to stop so that Litecoin can catch up!

I have all my cash in LTC for that rise a week or so ago, and didn't sell when I should.

So, now that bitcoin is gone silly, Litecoin is retreating, and I have to wait for them both to catch up again!

I would guess that $70 + is the maximum for a few days, but with all the bitcoin in the news as a potential fix for Cyprus, its going to attract some new money - and the whole pattern gets changed again!

I love it when people moan about the writing skills of others and failing dismally in the same sentence!

<pedantic correction>

quiet - defined as Making little or no noise

the word you want is:

quite - defined as To the utmost or most absolute extent or degree

</pedantic correction>

Ironically, the word Damn comes from French as well!

I guess the OP is quickly learning about the political divides of the world!

It might feel that it would be good to share the coins out equally, but as a late arrival, you do get more than the first miners got.

They started with nothing, and had to build their wealth from some useless files with no financial wealth associated to them. 

A few years later, you don't start with nothing, you have a free infrastructure where you can spend coins, people know what you are talking about, and the coins have a real value.

For $60, you get access to this world, and you won't even lose your money, because you can change from a bitcoin back to fiat any time you want.

Seems to me that is better than equal for you.

Maybe you should quit while you are ahead?

Its a nonsense story based mostly on the popularity position of bitcoin watching apps on the iPhone chart.

Seeing Spain is mostly Android, and these apps are English language, its not going to be difficult to get some chart movement if you have an article in an influential magazine to a very niche audience.

Funny, enough, us linking to the story, will give it more credibility to the Google trends when that comes out, and the whole cycle repeats!

Eventually, we we have is a lot of self perpetuating facts about how popular bitcoin is in Spain!

Don't you just love numbers?

The future always brings change, it isn't one thing that causes it, although one thing can lead to another, which leads to another etc.

Email has changed the post office, however, it might be useful to get our diaries sync'ed!

Email was invented in 1973.  The post office only started noticing email in the late 90s, but mostly in the last 5 years.

The reason email has had an effect on this, is also connected to the way that companies interact with their customers.  They started sending their bills by email, so the amount of official post went down. We also had the introduction of direct debit as a way to pay bills, so we didn't need so much of our accounting information sent to us.  It wasn't just because of eBay and Amazon that the post office is having problems. People, generally, didn't send letters to each other on the scale that we send emails.

With that background, how much do you think bitcoin is going to effect the banks?

If anything, the internet has already effected the banks, and bitcoin is a bit late to that party.  Local branches are disappearing, and the whole banking experience is very centralized. The difference with bitcoin, compared to email is that its not the same analogy.

Bitcoin is just a variation of what the banks are already doing.  If you want to pay a factory in China, you just talk to your bank who will arrange it.

What bitcoin offers is a cheaper way to do it.

If bitcoin takes off, I wouldn't be surprised to see that the biggest users of it will become banks - after all they already know all the people who would gain from using it.

If you want a better analogy, think of how VOIP didn't kill the International telecom giants like many thought it would, it just became another of the products they offered!