The future of Bitcoin is illegal

[BeetcoinScummer]

I have elderly grandparents living in a poor country that is on the terrorist watchlist. I used to wire (from the US) about $8K a month to pay for their medical and hospice care bills. I make a faily decent salary working in an investment bank and I live well below my means, so sending them this money should not be a problem one would think. It turned out that each wire transfer I made tripped some kind of AML/anti-terrorist trigger and subsequently got delayed for weeks while I had to keep contacting the bank and explaining to them why I needed to send this money ... over and over and over again. We are talking about $8k/month here, not millions of dollars. I wonder how businesses can freely wire millions of dollars while an individual can't send a few thousand?

When I head of Bitcoin about a year ago I devised a scheme where I can send money using coins through my sister. She lives in an intermediate country where she can still easily cash out the coins through Mt.Gox, and then wire the money to my grandparents without the unreasonable restrictions placed by the US authorities. Problem solved!

So yeah, I use Bitcoin to bypass AML and anti-terror restrictions.

[sturle]

Credit cards are just the easiest and safest way to buy things. You know it and I know it, so don't be ridiculous.

I would have to disagree about that. Bitcoin is way easier than a credit card.

In what way? I can understand that it is equally easy to make a credit card payment as it is to make a Bitcoin payment if you already own coins, but if you don't hold any coins then it is a much more convoluted procedure.

While paying with a credit card is easy, even if you don't own money or the credit card.  And that sums up the main problems with credit cards.  Paying with Bitcoin is impossible if you don't own any bitcoins, or can buy them from someone willing to take the risk off the merchant, and that is exactly how it should be.  It is a feature.  If you don't understand that, you have missed something very important.

[sturle]

Put yourself in the shoes of someone who doesn't already hold coins (99.99999999% of the population.) Do you still think making a Bitcoin payment is easier?

False.  I hold bitcoins, and I am more than 0.00000001% of the world population.

Edit: I just realized I have sold or given away bitcoins to 0.005% of the population of my own country, and that is probably just a small part of the coin holding population of my country.

[CharlieContent]

Put yourself in the shoes of someone who doesn't already hold coins (99.99999999% of the population.) Do you still think making a Bitcoin payment is easier?

False.  I hold bitcoins, and I am more than 0.00000001% of the world population.

Edit: I just realized I have sold or given away bitcoins to 0.005% of the population of my own country, and that is probably just a small part of the coin holding population of my country.

*sigh*

You're the autistic guy aren't you?

Is it too much to hope that you concentrate on the actual argument rather than the completely inconsequential numbers that I used illustrate it? Or am I in the wrong forum for that?

Let me ask you a question. If someone says "Can you wait a second?" do you look at your watch and wait for one second to elapse?

[CharlieContent]

While paying with a credit card is easy, even if you don't own money or the credit card.  And that sums up the main problems with credit cards.  Paying with Bitcoin is impossible if you don't own any bitcoins, or can buy them from someone willing to take the risk off the merchant, and that is exactly how it should be.  It is a feature.  If you don't understand that, you have missed something very important.

TAre you saying that it's easier to do credit card fraud than Bitcoin fraud?

I actually can't argue with that, since I have no idea how credit card fraud works. I do know one thing though, people go to prison for credit card fraud but Bitcoin fraud seems to be done openly and with impunity.

If you take Satoshi Dice out of the equation, I wonder how many bitcoin transactions have been people sending money to a place where they expected to get their coins back somehow and didn't in the end. I'd imagine a not inconsequential percentage.

[Wekkel]

While paying with a credit card is easy, even if you don't own money or the credit card.  And that sums up the main problems with credit cards.  Paying with Bitcoin is impossible if you don't own any bitcoins, or can buy them from someone willing to take the risk off the merchant, and that is exactly how it should be.  It is a feature.  If you don't understand that, you have missed something very important.

I tend to look at this differently.

Paying with credit card is essentially no more than saying that company X will pay you on my behalf. Subsequently, company X will come to me for the amount paid increased with fees/interest.

The same type of construction is possible with Bitcoin. Company X will pay you on my behalf, but not in USD but BTC instead. Subsequently, company X will come to me for the amount of BTC paid (or USD if agreed upon) increased with fees/interest.

From that perspective, speaking about credit card payments on the one hand and BTC payments on the other hand is comparing apples with oranges.

The more I think about it, the more it dawns on me that BTC's essential property is really ease of payment. Not the software, not your HDD rumbling for hours, correction, days without end to update the blockchain but the pure and simple fact that I can send 'something' to anyone, even the moon (figurally speaking) if an astronaut has some sort of Internet connection. In fact, an internet connection is not even required for the receiver for the payment itself. He can generate his own unique key throuhg brainwallet.org or similar algorithm available offline to send BTC to.

The purse simple fact of a payment requires nothing other than me, my internet connection, the Bitcoin protocol and a receiving address. No blockades, no interference, nobody skimming fees in between and holding up one of the most simple and valuable things on earth: exchange between humans.

In a very abstract way of thinking about Bitcoin, everything that was not possible due to payment frictions, is now possible due to Bitcoin. Just to round off this little brainstorming event, a lot of things are alread possible:
*electronic money
*mobile money
*international payments

Not considering its flaws, Paypal is already immensely usefull due to its property of easy online payments outside of the banking system.

Very rough, Bitcoin enables the following additional properties:
*virtually no fees
*receive electronic payments without a bank account/Paypal account
*no central control

I do not see myself paying with BTC at the grocery store due to BTC's unique properties. But the same properties make it immensely usefull to make payments all over the world/universe to anyone, literally anyone, without limitations (if waiting for confirmation is not a problem; exactly the reason why I do not see it happening for BTC at the grocery store).

It is already possible to purchase the most outlandisch tablet from the most remote tablet factory/seller from China. Within time, you can also pay the chap without limitations.

Trust is not the problem (its a topic of trade as long as people have existed). Ability to pay/receive is, at least for a large part of the world (not our 1st world). Let's wait for smartphones and mobile internet to break through in developing countries. From where I am now in my line of thinking, that will be the most important source of BTC's upcoming success. Secondary properties (such as the fixed amount of 21 million BTC) are helpful (e.g., for the 1st world users).

It's gonna be great 

[markm]

So I use my bitcoin credit-card instead of bitcoin, so what, I don't see that invalidating bitcoin or making it "niche", and I expect I have a better chance of actually being able to get a bitcoin credit card than to get a fiat credit card though that would just be an artifact of which credit-rating agencies are consulted by the card-issuers I would think.

-MarkM-

[sturle]

Put yourself in the shoes of someone who doesn't already hold coins (99.99999999% of the population.) Do you still think making a Bitcoin payment is easier?

False.  I hold bitcoins, and I am more than 0.00000001% of the world population.

Edit: I just realized I have sold or given away bitcoins to 0.005% of the population of my own country, and that is probably just a small part of the coin holding population of my country.

Let me ask you a question. If someone says "Can you wait a second?" do you look at your watch and wait for one second to elapse?

No, but I certainly don't expect to wait for a whole week.  IMHO a long series of made up 9s expresses the same as the same number of exclamation marks.  Your argument doesn't get better by yelling it, but people would take it more seriously if you wrote it like this instead:

Put yourself in the shoes of someone who doesn't already hold coins. Do you still think making a Bitcoin payment is easier?!!!!!!!!!!

Or you could make it look even better, and make people notice your point, like this:

Put yourself in the shoes of someone who doesn't already hold coins. Do you still think making a Bitcoin payment is easier?

If you read this thread closely, I answered that.  It's a feature.  People who don't have money can't pretend to pay.  That is very important if you sell things, and the main reason why many stores are reluctant to take credit cards.

I tried to buy stuff in the U.S. and have it mailed to a friend there to avoid VAT.  (Sending it via my home address would mean 25% VAT and much higher shipping costs.)  It turned out to be impossible, because no store would send to another address than the one registered with my cards.  I wish I could pay with bitcoins then.  It takes maximum one business day to buy coins if you don't have any, unless you live in some third world country.

[Roger_Murdock]

Was sending an email easier than mailing a letter in 1995 if you didn't have a computer, an internet connection, or an email account? Well, no, probably not. But the new technology was so superior to the old that it's hardly a surprise that over the next decade and a half millions of people acquired those things and learned to use them. Nor is it a surprise that people designed systems that worked with the underlying technology and made it much, much easier to use.

[VogueBlackheart]

I'm just in it for the money. The actual, folding, bank account, Visa card money.

YEAH! ACTAUL MONEY. The kind made of paper! Not that unbacked stuff. That's what I'M talkin' 'bout!

http://www.youtube.com/watch?v=1zG8wp82bsQ

The fact that the only legitimate successful businesses are in the business of moving Bitcoins from national currencies and back merely serves to underline the fundamentally auxiliary nature of Bitcoin.

Replace 'auxiliary' with 'monetary'. I don't agree with the premise either but that's unimportant.

My succinct response to your posts is:

• Good call on the 2011 bubble.
• Replace 'Bitcoin' with 'gold' in your examples and see how they read. Bitcoin's suitability as a currency vis-a-vis dollars and its suitability as money relative to fiat are separate issues. The former is highly contingent; the latter less so.
• Check out Gresham's Law/Exter's Pyramid.

I also don't really see hoarding Bitcoins in the hope of them raising in value as a "use"

It is.

[jojo69]

I'm just in it for the money. The actual, folding, bank account, Visa card money.

YEAH! ACTAUL MONEY. The kind made of paper! Not that unbacked stuff. That's what I'M talkin' 'bout!

the sad thing is that some here will not even perceive your masterful use of irony

[johnyj]

I believe that if BTC ever becomes mainstream, it needs to be legal, so help it to get more positive view and cooperate with certain regulations are necessary

If most of people find this thing insecure and illegal, they will not bother

Or, let it just be a currency in the virtual world, anyway the virtual economy is going to be as large as real economy in the future, and there are far less regulation in the virtual world

[FrogBBQ]

There is nothing virtual about bit coin, it is an electronic currency, not monopoly money!

[Roger_Murdock]

Where are the successful Bitcoin businesses that aren't exchanges or money movers of some kind? The fact that the only legitimate successful businesses are in the business of moving Bitcoins from national currencies and back merely serves to underline the fundamentally auxiliary nature of Bitcoin.

Yeah, but those are the only (or at least the primary) kind of companies that would seem to fit a reasonable definition of "Bitcoin business."  If you deliberately set out to start a "Bitcoin business," it will probably have something to do with exchanges or moving money. If it doesn't, you're almost certainly setting yourself up for failure.  

"Bitcoin is so cool! I want to start a Bitcoin business! Hmm... I know, I'll make custom hats with my Bedazzler(TM) and sell them online for bitcoins!"

Well ok, great, but you're forgetting something.  Bitcoin is a currency and a payment system. It's not a business plan. It doesn't magically make the goods and services you intend to provide valuable. Now it's true that in SOME cases, the revolutionary properties of Bitcoin might enable a completely new business model (e.g., Silk Road), but that will be the exception.  For the most part, what you'll see are existing businesses adding Bitcoin as an additional payment option.  Making it the exclusive payment option is (in almost all cases) like opening a fireworks store that only sells snakes and sparklers -- it probably won't do great things for your sales numbers.  And things will likely stay that way for quite some time as Bitcoin becomes more widely known and used.  But remember - the fact that a hat seller allows you to buy their hats using bitcoins doesn't make them a "Bitcoin business" any more than their acceptance of dollars makes them a "dollar business."  So if you want to start a business that leverages one or more of Bitcoin's unique properties (e.g., ability to send micro-payments), then that's great.  And if you just want to sell Bedazzled hats, that's great too.  But in either case, understand what you're getting into.

[markm]

The laws are set up to "raise the bar" for "competing" financial infrastructures such as bitcoin from arising.

For example merely setting up experimental "exchanges" for exchanging the experimental currency "bitcoin" ran into quite a bit of hassle due to legal concerns, and setting up an experimental "stock exchange" seems to have, or to have been about to have, run into more.

Preventing the experiment from actually being run long term is problematic, maybe we should also have set up an experimental "school" where people would create "student" usernames who would perform these experiments, or something.

I have been taking the approach from the start that no one is going to participate in such experiments day in and day out year in and year out with play money they consider worthless, thus that at the very least we need our experimental institutions to be set in an experimental world/universe in which the experimental currency / currencies are valued, much like EVE online's currency is valued and World of Warcraft gold is valued and so on.

If the experiment is a success, that is, if it succeeds in developing robust, reliable institutions, solving the "rampant scams" problem players attempting to participate in investment and finance in EVE Oinline constantly encounter and so on, then we can consider the experiment a success and start looking into what would be involved in expanding an experimental, aka game or "not real just a simulation so far" currency and its institutions into the "real world".

Unfortunately the scammers seem dead set on convincing people not only that their scams are legitimate experimental uses of this experimental software, legitimate instriturions of its experimental world/game/universe, but also that the whole thing is not in fact an experiment but an actual deployment of an actual currency.

That last part is probably a huge part of the problem. The whole thing has been massively misrepresented by people seeking "a quick buck", bringing bad rep to the entire experiment and the experimental settings and institutions in which and means of which the experiment is conducted.

-MarkM-

[FrogBBQ]

For the most part, what you'll see are existing businesses adding Bitcoin as an additional payment option.

I totally agree with that and this is what makes the most sense indeed. This is the most efficient way to legitimate Bitcoin like it has been for PayPal for example. If this payment option is given, people (most of which have never heard or seen a bitcoin name and logo) will be curious. Combined with some free advertisement/endorsement (e.g. Max Keiser and the like) it will slowly get traction.

At present it is a very small volume currency. To date with ~10 million bitcoin mined at $12 per coin this is only a $120 million market, a drop in the ocean of paper currency (that can be printed ex nihilo) really. Value will have to increase significatively.

As always, time will tell.

[dbox]

The bitcoin system is ahead of its time, it's unclear if the society will be able to adopt its model in a short time. Investing time and money other than in a speculative way could be not a win situation at this time. Selling products for bitcoins is very risky for those who need an immediate profit.

[becoin]

I believe that if BTC ever becomes mainstream, it needs to be legal, so help it to get more positive view and cooperate with certain regulations are necessary

Bitcoin and every kind of bond that have face value in bitcoin and are traded in bitcoin, will not be legal in near term future. Bitcoin is changing the status quo while financial laws and regulations are crafted to preserve this status quo. Learn from history!

Before the printing press was invented only the Holy Church has the right to sanction the writing of books. People should read only true stuff and someone should take care about that - they say. The printing press was invented by the German Johannes Gutenberg around 1440. And guess what, it was declared illegal and all the books printed were outlawed by the Church. Many people were sentenced to death and burned to death. The printing press changed the status quo and challenged the POWER of gatekeepers of human knowledge through controlling horizontal communication between people! As early as 1620, the English statesman and philosopher Francis Bacon could write that typographical printing has "changed the whole face and state of things throughout the world". Same repeats now with bitcoin. Just this same theater has modern decors.

[becoin]

So true, but I've not seen too much evidence that governments are all that interested in Bitcoin itself yet.

Oh, they are believe me! Red lights are flashing and alarm bells are ringing at many government agencies. People that helped start bitcoin project intended to create a substitute to physical gold. But they are wrong. Bitcoin and gold are perfect additions to each other.

[johnyj]

I don't see any reason why government will claim a potential investment target illegal, is gold or silver illegal? Some even more close example are Linden dollar or WOW gold, are they illegal?