2012-12-09 Forbes.com - Bitcoin's Greatness Not Realized By Succumbing To Regul-

[proudhon]

Bitcoin's Greatness Not Realized By Succumbing To Regulation - Jon Matonis (obvi)

[Gabi]

The title is so much fail

[proudhon]

The title is so much fail

Why?

[justusranvier]

Interfaces with the legacy financial are transitional technologies that help make the conversion easier.

Most people right now can neither obtain a salary in bitcoins, nor use bitcoins to  pay for their expenses whether or not regulated companies like this exist.

What these transitional technologies allow individuals do is take the first step towards Bitcoin adoption by using it to store their savings. A smart European customer of Bitcoin-Central could use them to convert his paychecks automatically to bitcoins, immediately withdraw them to an offline wallet under his own control, and then add small amounts bitcoins to the account to fund the debit card. This provides the maximum amount of security and usability.

As more companies begin to accept bitcoins directly the user will have less need to use the debit card, and eventually won't fund it at all. The final stage will come when his employer is willing to pay him directly in bitcoin. At this point the transitional technology will no longer be necessary and Bitcoin-Central will either move on to provide other services or will close shop.

[TraderTimm]

Interfaces with the legacy financial are transitional technologies that help make the conversion easier.

I agree, this is part of the transition phase from sovereign currencies to a worldwide internet currency. In the end, "edge" processors that convert BTC to other vehicles will slowly go away, in addition to banking "bridges".

It is also amusing to see the confusion from people who want to hate bitcoin, but can't wrap their heads around a banking bridge existing alongside it.

[knight22]

Interfaces with the legacy financial are transitional technologies that help make the conversion easier.

Most people right now can neither obtain a salary in bitcoins, nor use bitcoins to  pay for their expenses whether or not regulated companies like this exist.

What these transitional technologies allow individuals do is take the first step towards Bitcoin adoption by using it to store their savings. A smart European customer of Bitcoin-Central could use them to convert his paychecks automatically to bitcoins, immediately withdraw them to an offline wallet under his own control, and then add small amounts bitcoins to the account to fund the debit card. This provides the maximum amount of security and usability.

As more companies begin to accept bitcoins directly the user will have less need to use the debit card, and eventually won't fund it at all. The final stage will come when his employer is willing to pay him directly in bitcoin. At this point the transitional technology will no longer be necessary and Bitcoin-Central will either move on to provide other services or will close shop.

I totally agree with this. Bitcoin-Central is also giving bitcoin huge CREDIBILITY for normal Joe who is not aware of bitcoin and how the banking system works. Bridges are very important and inevitable for the transition of wealth toward bitcoin.  

[davout]

This article is a massive pile of fail.

My reply

John, I'm used to much better coming from you.

As Erik Voorhees stated in response to the slaves that just got freed metaphor : "Or it's like a bunch of slaves breaking out, and then running back with tools to free everyone else instead of hiding in the wilderness."

I'm quite unclear as to what you are suggesting we should do. Are you suggesting we should break the law and hold fiat-denominated funds without a license putting ourselves and the funds entrusted with us at risk ?

Do you really believe that just because you use an unregulated exchange your anonymity is somewhat protected ? I hate to break it to you, but as soon as you use banks to fund and cash out from an exchange your anonymity is gone, plain and simple. If it is really what you want there are plenty of brilliant initiatives such as localbitcoins that will cater to your needs.

Also we didn't "temper our announcement", we corrected some misconceptions and factual errors that got spread by some journalists unable to read a statement in full. The original announcement wasn't modified.

Oh, and by the way Daniel Stuckey ridiculed no one but himself in his article ridden with factual errors and moralist statements.

I'll remember all the brilliant stuff you've already written about Bitcoin and its ecosystem to forget this piece of nonsense.

[hazek]

Did John Matonis lose some of his objectivity when he partnered with MtGox through the Bitcoin foundation ?

Although it's well known that I'm not a big fan of Bitcoin foundation, I think your question here is a bit unfair to Jon, especially since mtgox is likewise effectively heavily regulated. I think what you read is Jon's view that he really believes in and I don't think he had alternative motives writing about it.

[davout]

Did John Matonis lose some of his objectivity when he partnered with MtGox through the Bitcoin foundation ?

Although it's well known that I'm not a big fan of Bitcoin foundation, I think your question here is a bit unfair to Jon, especially since mtgox is likewise effectively heavily regulated. I think what you read is Jon's view that he really believes in and I don't think he had alternative motives writing about it.

You're right, statement removed.

[davout]

mtgox is likewise effectively heavily regulated

That's yet to be confirmed by a mtgox representative.

[Gavin Andresen]

Did John Matonis lose some of his objectivity when he partnered with MtGox through the Bitcoin foundation ?

I think Jon has been pretty consistently on the "less regulation is better regulation" side of the debate. Given that the big criticism of the Bitcoin Foundation (and Mt. Gox) around here was that it is on the "more regulation" side of the fence, I find your comment kind of amusing.

As for it being "a big pile of fail" :  I think reasonable people can disagree here.  I have no idea whether trying to work inside the existing system or working around the existing system is a better approach. You have your opinion, Jon has his, I think we'll be arguing about it for years to come; happily, there doesn't have to be One True Answer.  I just hope we don't spend all our time sniping at each other over the best One True Way to reach the goals that we all share.

[Gabi]

The title is so much fail

Why?

I mean the title of the article, of course. The article is full of bullshit, and the title too is bullshit.

[imanikin]

Go Jon!

Testify, dude!

Tell the banker wannabes like it is!  

[hazek]

mtgox is likewise effectively heavily regulated

That's yet to be confirmed by a mtgox representative.

It doesn't matter what is true officially that's why I said -effectively- which they are, they are effectively regulated given their actions of requiring their customers to provide all sorts of personal identification and are required to follow strict rules how they may access their site. If they're doing this out of fear of regulations preemptively or because they have agreed to these measures is irrelevant.

[davout]

I think Jon has been pretty consistently on the "less regulation is better regulation" side of the debate. Given that the big criticism of the Bitcoin Foundation (and Mt. Gox) around here was that it is on the "more regulation" side of the fence, I find your comment kind of amusing.

I haven't really criticized the foundation as being "more regulation", that would have shown a quite weak understanding of Bitcoin.
My opinion on the foundation overally is "Good thing for Gavin, he gets a salary, he deserves it after all. Also meh."
I'm however eagerly awaiting to see how the foundation will cover this as it, IMHO, undoubtly deserves at least as much attention as "the banks dirty secrets"

As for it being "a big pile of fail" :  I think reasonable people can disagree here.  I have no idea whether trying to work inside the existing system or working around the existing system is a better approach. You have your opinion, Jon has his, I think we'll be arguing about it for years to come; happily, there doesn't have to be One True Answer.  I just hope we don't spend all our time sniping at each other over the best One True Way to reach the goals that we all share.

I'm not even arguing his opinion is right or wrong, we all know there is no such thing as the Absolute Truth™. But I do point out that he's kinda making big deals about stuff that's really not the main point of this news "will we be able to remain anonymous using BC ?", well, you're not anonymous on any exchange as soon as banks get involved.

The way he talks about graph analysis forgets all we learnt with Shamir's paper.

His statements about how Linux didn't start by integrating with Microsoft are laughable as someone pointed out on Reddit : "Linux did coexist in a sense with Solaris, HP-UX, and other proprietary UNIX(r) OSes, which is the market in which Linux eventually came to dominate."

Anyway, let's not waste our time here, I respect his opinion but I think he could've made a much better article out of it.

It doesn't matter what is true officially that's why I said -effectively- which they are, they are effectively regulated given their actions of requiring their customers to provide all sorts of personal identification and are required to follow strict rules how they may access their site. If they're doing this out of fear of regulations preemptively or because they have agreed to these measures is irrelevant.

It does matter, because if you act like you're regulated without actually being you only get the negative side and reap no benefits out of it. MtGox was doing AML/KYC when they got kicked out of France, they got the bad side of regulation and still got everyone angry by suspending their EUR business for a while. They neither had nor ate their cake.

[Technomage]

I posted my views on the main thread:

https://bitcointalk.org/index.php?topic=129461.msg1388723#msg1388723

[marcus_of_augustus]

I'm not so sure that the main defence being put up here for more regulation actually stands up that well to close scrutiny. The defence is along the lines of "the more bridges we build the faster we can flow the mainstream funds into bitcoin and out of the fiat system"

Ok, so let's take a look at what happens when one person decides to change all their fiat money into bitcoin (say I'm Rick Falkvinge ) ... before the transaction the bitcoin network had 10.5 million btc and the fiat system had XXYY fiat pesos ..... and amazingly after the transaction there are still 10.5 million btc and XXYYXX fiat pesos in the respective systems. So how is that all these "funds flowing into bitcoin" have not changed the number of units in either system? Of course the answer is that there was another willing seller of btc to exchange with Falkvinge's fiat pesos.

The conceptual error here, and what undermines the "building bridges" argument, is that funds are NOT flowing from one system into the other, it is VALUE that is flowing. But what is value in this case? It is the collective illusion/delusion/belief, call it what you will, that we all choose to engage in to make this thing we call money a reality. For example, just imagine that tomorrow we all wake up and bitcoins are valued at $10,000 a piece (or equally say $0.0001), have any funds been "flowing" to and fro to achieve this? Maybe, but not necessarily so, there will still be the same number of BTC in circulation, and ~ the same number of fiat pesos but massive amounts of value can flow without any exchanges functioning whatsoever.

Just something to consider, how much do you VALUE your financial privacy?

[jimbobway]

Matonis continually points out the problem but does not give a solution.  Right now the only clear deregulated website is silk road.  How does one build a non deregulated business without getting arrested?  Move to africa where system D thrives?  Any volunteers? 

[justusranvier]

Ok, so let's take a look at what happens when one person decides to change all their fiat money into bitcoin (say I'm Rick Falkvinge ) ... before the transaction the bitcoin network had 10.5 million btc and the fiat system had XXYY fiat pesos ..... and amazingly after the transaction there are still 10.5 million btc and XXYYXX fiat pesos in the respective systems. So how is that all these "funds flowing into bitcoin" have not changed the number of units in either system? Of course the answer is that there was another willing seller of btc to exchange with Falkvinge's fiat pesos.

You're neglecting the velocity component of the money supply. There's a huge difference between 10.5 million BTC sitting idle in the blockchain and the same amount being continually spent.

If people are converting their paychecks to bitcoin, and then converting back to fiat as needed to pay expenses the total amount of bitcoins they will move in a year vastly exceeds their balance at any given time.

[mrvision]

I liked the article