[every]

Lolcust, the creator of the ‘LolCoins’ (GeistGeld and Tenebrix) has explicitly stated that his intention is to open a money laundering service with the 7,700,000 coins he premined in both chains. Perhaps in his country money laundering is a time honored and noble profession, but in most of the civilized world, it is illegal. This post is intended to educate those not familiar with the legal system in the United States, and to explain why mining these chains makes a miner just as guilty as the worst element laundering money with these coins.  I know that there are a fair amount of people in the community who could care less about laws and prison and such. More power to you, good luck in your battles. This post is for those who do care.

Most of the time in US Federal cases involving 2 or more people, the charges brought will be "Conspiracy to commit <insert crime here>". The burden of proof required for a “Conspiracy” variant of a crime is far less than it would be for the “normal” charge. Most Federal drug convictions in the US involve the “Conspiracy” variants, as witness testimony is usually enough for conviction, with absolutely zero physical evidence. Usually the prosecution has to show that a person 1) knew about the conspiracy and 2) benefitted from it. Under the law, every person involved in the conspiracy is equally guilty. The prosecutors for the US Government use this to force snitching and plea deals. It is an extremely effective tool.

Here is how this applies to the current situation: These chains were designed specifically to enable a money laundering operation. This has been stated in many places on an open, public forum, on the very pages that have the download links. It can be reasonably presumed that anyone mining these chains knows about the creator’s intentions, and therefore knows about the conspiracy. Miner gets coins for mining the chain, and thus benefits from the conspiracy. Also, the encrypting part of the mining as well as securing the network would also be seen as furthering the conspiracy.

Under US law, this makes anyone mining these chains as guilty as whoever is laundering money through it. Whether they be an evil drug lord, a Russian mobster, or a terrorist organization. Not a US citizen? Perhaps you will be ignored. Though if a terrorist organization laundered money via these chains and successfully launched an attack…well the CIA is still running its ‘Rendition’ program I believe. Also note that the Feds do not need to catch everyone. Even a dozen or so convictions would justify the money spent and give them their photo ops.

It would also give them all the ammunition they needed to demonize and shut down all other blockchain based cryptocurrencies.

[And you will let them.]

So let's say Citigroup, or Paypal, or any large financial group decides it wants to offer its customers a handy way to send money to other people. Let's also say they settle on using the freely available Bitcoin protocol. So they buy a lot of hardware and start their own proprietary blockchain, one that doesn't give them diminishing rewards and has no cap on how many coins they can mine. Then they start marketing these new "Bitcoins". Big rollout, mobile apps, nice gui programs for home puters, accepted at all of their b&m locations, commercials on Prime Time tv, etc etc. For many this is the 1st time they ever hear of Bitcoins.

But wait, there's all these fringers and ne'er-do-wells already trading in "Bitcoins", but they are not the right flavor of Bitcoins, so there is confusion on the part of the public. To clear this up, the bank files for a trademark. Their "Bitcoins" are obviously different and a much better product, and therefore needs to be distinguished from other "Bitcoins" that are out in the world. Do remember the primary definition of a trademark (according to the USPTO) is:

A trademark is a word, phrase, symbol or design, or a combination thereof, that identifies and distinguishes the source of the goods of one party from those of others.

Of course people may try to appeal on 'prior use' grounds, but I honestly doubt they will get much traction vs. an international bank. Especially since nobody currently holds a trademark on "Bitcoin", and the coins by the bank will be a proprietary type that is different than any other ones in circulation. "Prior use" is not an end-all be-all argument, and the bank merely has to convince one government employed patent lawyer that they are correct. I have no doubt they can be most...persuasive. Especially with something as important as Bitcoin.

So they win. They own Bitcoin® and immediately start litigating anyone else who uses the term in commerce. They will have legally hijacked the project for a relatively paltry sum. Even if they make no money on their Bitcoin® project, they still win in the long run.

And you will let them.


How? By your inaction, by your unwillingness to trust anyone, your inability to adapt to the situation at hand. If someone friendly to Bitcoin does not step up and start doing the necessary legal actions to secure the project, then somebody unfriendly to the project will start doing all the necessary legal actions to end it. Once a project becomes viable, these things are simply a matter of course. I believe The Apache Foundation exists mainly for this reason.

Others have tried to step up and do this for Bitcoin, but were casually rejected out of hand because they weren't Satoshi. If Satoshi developed Bitcoin under a pseudonym and then disappeared, I highly doubt that he will break cover to register for a trademark. It is up to the community to find a solution. Of course one of the critical questions is can a community of individualists find a workable solution?

I don't know what the optimal solution is going to be, that is for the community to decide. Ideally some kind of 'Bitcoin Foundation' made up of people who have proven their loyalty to the project with the sole purpose of legally protecting it would be great, and I would gladly toss a few bitcoins toward something like that to help cover legal fees, etc. I know that many chafe at the idea of any organizational structure being applied to Bitcoin, but if we don't make sure that all the i's are dotted and the t's are crossed, then someone will use this exploit to damage or end the project.

Oh, and let me be clear, I personally in no way want to be on any sort of Foundation or council or whatever, nor do I want to try and collect btc to fund anything. I am writing all this simply because I believe that this is an issue that needs to be addressed. Trademark applications for "Bitcoin" are already popping up in countries across the globe. Failing to act soon will mean death by thousand cuts while swimming in the shark infested waters of international finance.