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Author Topic: Protecting bitcoin from government  (Read 3383 times)
prattner
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June 02, 2011, 02:16:37 AM
 #1

I have become fascinated with Bitcoin since first reading about it a few weeks ago.  It seems to me that a successful, thriving bitcoin currency is very threatening to governments, because it reduces their power to trace transactions, confiscate money, and pay their bills in inflated currency.  Bitcoin takes power from government and puts it firmly back into the hands of the people.  It has a small, but real, chance of becoming one of the most liberating inventions since the Internet itself, and will therefore be detested by governments around the world.  If it is to survive, every effort must be taken to protect it from their attacks.

At the moment Bitcoin is like a bird flying under the radar, too small to notice or want to do anything about.  But as Bitcoin grows more successful and people actually start to use it for routine transactions, it will come under attack from all the usual enemies of liberty, and that is a very long list indeed.  The established financial networks, like Visa and Mastercard, and Paypal to an extent, will all view Bitcoin at first as an irritant, then a dangerous competitor.  They will strike at Bitcoin by denying access to Bitcoin through their networks, and by way of the government.

Western governments will also view Bitcoin as an irritant at first, then eventually as something that needs to either be co-opted or crushed.  Expect the attack to start slowly, with some news stories about heinous crimes funded through Bitcoin, then more stories talking about money laundering, drug smuggling, human trafficking...you know how it will go.  As the stories catch on, the media cheerleaders will egg on their governments to take action against Bitcoin.  And they will.

Since Bitcoin has admirably protected itself from having a central server easily seized by some law enforcement agency, they will strike at anything in easy reach.  This website and forum are prime examples of vulnerability, and losing this site would be a big blow to the currency.  If there is some clever way to distribute the site and its functions, or to deliberately make this website a LOT less important, it should be done.

The developers working on this project are geniuses, and very brave.  I expect they will be assailed on all quarters.  Remember what happened to Paypal and how it started out with such high hopes, only to be attacked and sued to the point where they had to sell the company to Ebay just to get away from all the lawsuits and investigations.  It will happen here, too. 

I can't say I find it likely Bitcoin will survive the inevitable assault, but I can hope.  The developers should consider looking for friends in politics with libertarian sympathies who can help shelter them from the coming storm.  It's going to be a big one.
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June 02, 2011, 02:22:35 AM
 #2

I can't say I find it likely that government as we know it today will survive Bitcoin.

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BookofNick
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June 02, 2011, 04:40:14 AM
 #3

The question is: who are you going to sue (if you're a politician, bankster, etc)? Who are you going to shut down? Who are you going to prosecute? There's no one company, no one person.

Blood flows through the body of the bitcoin community with no single heart to push it. It thinks and processes with no single brain controlling the whole thing. It is an entity unlike any other - it is the Internet.

prattner
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June 02, 2011, 06:18:40 AM
 #4

The attack would come from many directions and it would be aimed at anything in sight.  Attacks from the EU or the American government would be aimed at first at this website and the named developers working on the project.  It would be lawsuits, investigative harassment, cease and desist orders, and probably DNS seizure to kill the website.  There would probably be a spate of nasty news stories before this happened, so there would be some warning.

At the same time, all banking connections to anything bitcoin related would cease, or become forbidden in customer policy, like Paypal banning users from trading in bitcoins using Paypal. 

There is no doubt this sort of thing would be damaging to the currency, and it could well deal a mortal blow.  Even if the currency survived, it would become an underground currency that above board businesses would not be interested in trading in.  If the currency persisted and governments still found it to be threatening, they would make it illegal to prevent legitimate businesses from trading in it.

There is another possibility the currency could catch on in places with currency controls, like China.  The Chinese government absolutely fears and detests seeing money move around freely, or hidden from government eyes.  If the currency caught on quickly in China they may not be able to stop it, but if they recognized the threat in time, I would imagine China would take more of a hacker style attack against the system, since they are known to do that sort of thing.

The stage is set for us to see some very interesting times. On one side you have most of the governments of the world, their friends in banking, their media tools and pretty much the whole privileged Establishment.  On the other, you have billions of people looking for a safe store of wealth, one that will not be eroded by inflation, one that is private, and that cannot easily be confiscated or stolen. 

It is this period, from about now to some point in the future where the critical mass is reached that permanently protects the currency that presents the greatest danger. Anything that can be done to spread out resources and avoid negative publicity should be done.

AHemlocksLie
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June 02, 2011, 10:00:02 AM
 #5

I only found out about Bitcoins a few hours ago, and I've been lost in deep, deep thought about since, about how the system works and what it will do. Controlling the money is an EXTREMELY large blow to the government. If even a large minority is ever willing to freely accept Bitcoins in place of real dollars, it's a giant exclamation that the government is unneeded there, and with the way governments seem to be gobbling up as much power as possible lately, they certainly don't need to be questioned on such fundamental level. Running the currency system has been a political move practically as long as there have been currency systems, and it's a strong reminder that you're part of a nation under their control. They will not like such an attack, and they will fight back fiercely, and it will be a dirty fight.

Pretty much all the grim predictions people have mentioned already seem extremely likely to me. If it ever looks like it might be a threat, it will be attacked legally, rejected by and lobbied against by major competitors, and there will be serious litigation against the creators and anyone they think has been seriously enough involved. In line with the Chinese hackers idea, I think something like that will be attempted. I think some organization will attempt to overpower the mining community so they can overwrite the block chain to wreak havoc on the economy.

In order to survive, the community is going to have to be willing to fight back. When the pressure turns up, people will need to stick to Bitcoins through the massive storm it will have to weather. We'll need to continue to build the community and get the mining community as large as possible, in case opponents attempt to overwhelm it. The community will, like the currency itself, need to be decentralized. If they can't ruin the currency itself, they will try to break up the community. Sites will be seized and shut down for little or no real reason. Perhaps a community feature could be built into the Bitcoin software to share major sites over the network in case the servers are ever shut down. Such a move would still cause damage to the community and certainly limit growth, but it would also give the community more strength in case of collapse.

Our strength and their fear is decentralization, the removal of power from a single entity. Any part of it that loses that decentralization will be a target and be viciously attacked.

As always, tips always appreciated. C;
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ben-abuya
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June 02, 2011, 10:22:43 AM
 #6

I agree. Decentralization of everything is the key. Not just because it makes it harder to hunt people down technologically, but because it distributes the risk so that no one person can really get into too much trouble. If the risk is low, and the government has to expend lots of resources just to hunt down one bit player (because nobody is more than a bit player), it really becomes impossible to fight this.

One really cool project would be to try to port a forum like this, with all the functionality people expect from a forum, to a p2p network like Tor. Is anybody interested in putting up bounties for that?

http://lamassubtc.com/
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DarkLinkXXXX
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June 02, 2011, 06:21:28 PM
 #7


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Looks like Anonymous will have to keep an eye on this. :>
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http://bc.x14.eu/sigs/5e5dace1.png

Can i has burned patriot act?

Can I has gpg?
Bazil
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June 02, 2011, 07:41:24 PM
 #8

This is probably one of the major reasons Satoshi never let anyone know who he was.  I wouldn't be surprised if he is actually an American working for the NSA specializing in cryptography.  Then he got sick of the government's monetary polices and decided to create bitcoin.

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garyrowe
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June 02, 2011, 08:44:50 PM
 #9

There is a very interesting article on legal tender in Wikipedia http://en.wikipedia.org/wiki/Legal_tender. Essentially, in the US, while the USD can be used to pay off debts, it is not required by businesses to accept USD in exchange for goods or services. That seems to open the door (by a tiny crack) to allow alternative payment methods to be acceptable without the government having a cause for concern.

Bitcoin enthusiast and Java programmer contributing to https://multibit.org and http://bitcoin.stackexchange.com
Findeton
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June 02, 2011, 09:50:13 PM
 #10

Bitcoin is everything but anonymous.

Bitcoin Weekly, bitcoin analysis and commentary

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garyrowe
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June 02, 2011, 09:57:07 PM
 #11

"How can we protect Bitcoin from the threat of a government wanting to kill it off by various nefarious means?"

1) By pointing out that it is a more open currency than the one they already have so reduces the risk of terrorism, money laundering etc (definitely a good thing as far as I'm concerned). True anonymity on the Internet is damn near impossible.

2) By growing the Bitcoin economy so that it can stand alone. If everything you can get with alternative currencies is available by Bitcoin then you don't need to move outside the currency. Hey, you can live entirely through VISA/Mastercard payments in Western economies so why not Bitcoin?

3) Many Western governments want to phase out cash (the UK is starting this process by getting rid of cheques) and many businesses view it as a hassle due to the increased chance of armed robbery or egregious fees charged by banks who also view it as a hassle to move around. Welcome Bitcoin, thanks for solving our problem and speeding up the process!

OK, I'll take my rosy glasses off now. But let's try to be optimistic about the future of Bitcoin - it's more open than what we have at the moment.

Bitcoin enthusiast and Java programmer contributing to https://multibit.org and http://bitcoin.stackexchange.com
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June 03, 2011, 07:11:32 PM
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I agree. Decentralization of everything is the key. Not just because it makes it harder to hunt people down technologically, but because it distributes the risk so that no one person can really get into too much trouble. If the risk is low, and the government has to expend lots of resources just to hunt down one bit player (because nobody is more than a bit player), it really becomes impossible to fight this.

One really cool project would be to try to port a forum like this, with all the functionality people expect from a forum, to a p2p network like Tor. Is anybody interested in putting up bounties for that?

Putting up a forum is easy. Getting people to visit and use it is not.

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K_Man_Alpha
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June 05, 2011, 12:19:40 AM
 #13

Well if any politician sees the title of this article they will be all over bitcoin. Especially ones near the Mexican boarder. Sheesh....

http://blogs.forbes.com/benzingainsights/2011/06/03/how-to-purchase-guns-and-drugs-anonymously/
unspy
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June 05, 2011, 11:29:21 AM
 #14


In order to survive, the community is going to have to be willing to fight back. When the pressure turns up, people will need to stick to Bitcoins through the massive storm it will have to weather. We'll need to continue to build the community and get the mining community as large as possible, in case opponents attempt to overwhelm it. The community will, like the currency itself, need to be decentralized. If they can't ruin the currency itself, they will try to break up the community. Sites will be seized and shut down for little or no real reason. Perhaps a community feature could be built into the Bitcoin software to share major sites over the network in case the servers are ever shut down. Such a move would still cause damage to the community and certainly limit growth, but it would also give the community more strength in case of collapse.

These are good thoughts which need to be considered.
    
A lot of thought as already been done in this area in regard
to finding a good censorship workarounds for those who live
under the "Great Wall" of China's Internet restriction.

There is the "Freedom Stick"
http://chinesewall.ccc.de/freedomstick-en.html
Freedom Stick Overcomes Firewalls

Developed by Chaos Computer Club of Germany, it relies on
The Onion Router network to cloak your connections, routing
traffic through the world using anonymous computer in order
to avoid getting one’s Internet usage tracked.

There is "MafiaaFire Redirector"
https://addons.mozilla.org/en-US/firefox/addon/mafiaafire-redirector/
Un-censor illegally taken down domains

This Firefox add-on makes it easy for users to access sites that
used some of the confiscated addresses. It does this by redirecting
you to substitute domain names that were out of the reach of US
courts, such as those with a .de top level domain.

You simply type getbitcoin.com into your browser as usual. The browser
sends the address to the add-on, the add-on checks if getbitcoin.com
is on the list of sites to be redirected and immediately redirects you
to the mirror site.

US officials alleged MafiaaFire circumvented their seizure order and
asked Mozilla to remove it. The open-source group said, "Our approach
is to comply with valid court orders, warrants, and legal mandates,
but in this case there was no such court order." Good for Mozilla!

I would like to see these two products offered as an extension for
for "SRWare Iron" (http://srware.net/en/software_srware_iron.php)
that I could run as a portable app off a USB drive.

Then I would want to find a way to set up a Bitcoin client to run entirely
from the thumbdrive, so that no data is sent to the C: drive. Then I
would clone a few iron key USB drives, using USB Duplicator Now, and
start to selling them to all my friends and family.

If someone else has already done this, let me know, I'll buy one.
 









- Honest government requires honest money
- Decentralize everything, start with money
"Revolt now or be a debt slave." ~Max Keiser
Vitalik Buterin
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June 05, 2011, 12:11:52 PM
 #15

This is probably one of the major reasons Satoshi never let anyone know who he was.  I wouldn't be surprised if he is actually an American working for the NSA specializing in cryptography.  Then he got sick of the government's monetary polices and decided to create bitcoin.

Or the NSA itself decided to create Bitcoin. Things as big as megacorps and governments work against themselves all the time, I wouldn't be too surprised if the NSA has some part in at least supporting it.

Argumentum ad lunam: the fallacy that because Bitcoin's price is rising really fast the currency must be a speculative bubble and/or Ponzi scheme.
JA37
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June 05, 2011, 12:32:39 PM
 #16

They could just outlaw it, making sure it never hits mainstream. No respectable company will have anything to do with it. While it probably will live on it will be of little or no significance to most people.

Ponzi me: http://fxnet.bitlex.org/?ref=588
Thanks to the anonymous person who doubled my BTC wealth by sending 0.02 BTC to: 1BSGbFq4G8r3uckpdeQMhP55ScCJwbvNnG
FoolOnTheHill
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June 05, 2011, 01:03:46 PM
 #17

They could just outlaw it, making sure it never hits mainstream. No respectable company will have anything to do with it. While it probably will live on it will be of little or no significance to most people.
As a newbie and also one aware of the problems in my country (US) I appreciate this discussion very much.  Most of the large corporations and controlled by the same criminals who control our government and the majority of the politicians.  I say, screw all of them.  As Gerald Celente has recommended many times, we should be supporting local businesses and individuals and not even waste our time interfacing with "the big guys."  Let them outlaw it.  The criminals are going to outlaw just about everything eventually, including growing your own food.  But their old system is failing and the less energy we invest in that system, the sooner it will fail.  I am so pleased to have found this information and am looking forward to getting into it big time.
SalemRottenberg
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June 06, 2011, 09:17:24 AM
 #18

I can't say I find it likely that government as we know it today will survive Bitcoin.
I haven't read this entire thread but I just want to point out that this is a very alarmist thing to say.
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June 06, 2011, 03:07:08 PM
 #19

I can't say I find it likely that government as we know it today will survive Bitcoin.
I haven't read this entire thread but I just want to point out that this is a very alarmist thing to say.

Protecting Bitcoin from government might be the least of our worries right now.

I can't say I find it likely that any government as we know it today will survive "comet" Elenin.
If Elenin is a Brown Dwarf, as I suspect, Bitcoin won't survive either. How's that for alarmist?

http://www.youtube.com/watch?v=SfOfBrNUOGA

The main point to understand from this video is that if this were just a normal comet it would
not have the gravity pull that would cause earthquakes each time we swing around into alignment.
I don't what Elenin is, but it's no comet. Something BIG is out there, and coming our way.

Do your own research, I have nothing more to say on the topic, see the off-topic thread:
https://forum.bitcoin.org/index.php?topic=12643.0

- Honest government requires honest money
- Decentralize everything, start with money
"Revolt now or be a debt slave." ~Max Keiser
FooDSt4mP
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June 06, 2011, 04:46:46 PM
 #20

I can't say I find it likely that government as we know it today will survive Bitcoin.
I haven't read this entire thread but I just want to point out that this is a very alarmist thing to say.

Protecting Bitcoin from government might be the least of our worries right now.

I can't say I find it likely that any government as we know it today will survive "comet" Elenin.
If Elenin is a Brown Dwarf, as I suspect, Bitcoin won't survive either. How's that for alarmist?

http://www.youtube.com/watch?v=SfOfBrNUOGA

The main point to understand from this video is that if this were just a normal comet it would
not have the gravity pull that would cause earthquakes each time we swing around into alignment.
I don't what Elenin is, but it's no comet. Something BIG is out there, and coming our way.

Do your own research, I have nothing to say on the topic: http://ele-nin.tumblr.com/

Since that video was made, the projections have changed again.  The new estimations show the object arriving more quickly and not coming quite as close.  Also, when we cross the trail, it will be later after it passes, so there should be less debris still there.  The model can be found here: http://secchi.nrl.navy.mil/STEREOorbit/C2010_X1.html  Still, it will probably have a large effect.  Unfortunately, the latest data is from March, so until we get an update these projections could be way off too.

As we slide down the banister of life, this is just another splinter in our ass.
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