Will bitcoins be illegalized in 2013?

[Jakers]

The forums are just one place BTC are used. For one, gambling here is illegal for the majority of the site, and that's one of the most profitable areas. Illegal gambling, drugs, guns, stolen items, hitmen (not for sure on this), and illegal services are all examples of what Bitcoins are used for. If you go to the Deepweb, the only currency people take are BTC. It's only common sense that a payment method that can be used like BTC is, and stay completely anonymous, would be used for illegal activity, right?

[Zebulon Pike]

I think that people here are missing the point.  While they can't eliminate bitcoins themselves because of the peer-to-peer network and blockchain/wallet system, if the government (for the sake of argument let's say the US govt.) wants to stop the spread of Bitcoin they can "ban" them, and then prosecute any businesses that accept bitcoins and freeze their USD funds (like WordPress).

Then they go after Dwolla, BitInstant, etc..

They don't have to wipe Bitcoin out of existence, but if they are able to stop what is currently some decent momentum towards wider acceptance/adoption by forcing large scale legitimate businesses out of the market, then the value of BTC will drop, demand will fall, and it will go back to being something that hackers play with on Tor.

I'm not saying that this is about to happen, or that they have a huge interest in stamping out Bitcoin right now, but it is very naive to think that they can't do it.  If they provide a strong enough financial disincentive for merchants to accept bitcoins, they can strangle the movement in its cradle, so to speak.

[granolageek]

Care to prove that statement? Most of the Bitcoin trading I've done here, or even seen here on the forums, has been pretty legal.

I agree. Miners need fiat for juice and hardware. Sellers of illegal good need fiat for food, clothing and shelter. It's far from obvious that a majority of bitcoin trades are for illegal goods.

[novusordo]

No.

[rng29a]

I think that people here are missing the point.  While they can't eliminate bitcoins themselves because of the peer-to-peer network and blockchain/wallet system, if the government (for the sake of argument let's say the US govt.) wants to stop the spread of Bitcoin they can "ban" them, and then prosecute any businesses that accept bitcoins and freeze their USD funds (like WordPress).

Then they go after Dwolla, BitInstant, etc..

They don't have to wipe Bitcoin out of existence, but if they are able to stop what is currently some decent momentum towards wider acceptance/adoption by forcing large scale legitimate businesses out of the market, then the value of BTC will drop, demand will fall, and it will go back to being something that hackers play with on Tor.

I'm not saying that this is about to happen, or that they have a huge interest in stamping out Bitcoin right now, but it is very naive to think that they can't do it.  If they provide a strong enough financial disincentive for merchants to accept bitcoins, they can strangle the movement in its cradle, so to speak.

True, only a few key services would have to be disabled to make paying with BTC much more harder.
Say the US govt. would make up some money laundering excuses and shutdown exchanges or just disable payment for them (Mt.Gox, BitInstant etc).
Suddenly the most important nodes and all bootstrap nodes would disappear from the network (DDOS).
Mining pools wouldn't work anymore because the domains will be seized (seems like all important ones have US domains).
Users couldn't communicate anymore efficiently since the biggest forum would be shutdown.
Seems scary...

[debianlinux]

A better question might be whether or not Bitcoin (and crypto currenty in general) would be the subject of any enacted legislation in 2013. "Illegalized" is almost a non sequitur. Legalization is the process of legislating a statute or ordinance into the standing record. AFAIK there is no standing legislation surrounding Bitcoin or other crypto currency (with the exception of crytpography export laws). So, if any legislation, regardless of how it is interpreted (good or bad) is made part of the standing record then Bitcoin will be legalized (yes, even if the spirit and intent is to prevent you or I from having and using it).

[Tessellated]

Governments can't even keep heroin out of prisons, good luck on making bitcoins illegal.

[Tessellated]

If such a black market future scares you, don't worry, gold has worked like that for ages. And no government would consider it illegal gold is to big to fail, Bitcoin maybe also.

Private ownership of gold was illegal in the US for several decades. But it did not stop people from stacking it.

[Schadenfreude]

Those who claimed, that it would be unlikely for statists to organize any coordinated effort to control Bitcoin because it would be profitable for a country to not partake...

Example:
International Opium Convention and successors. Tell me one modern country where the partaking in opium consumption is as legal as the consumption of alcohol is. Same with cannabis, because it was on the same lists. Those kind of international contracts are also usually bound to other contracts in about the same way as the US federal government coerces states to enforce seatbelt laws by making the flow of various funds to the state depend on enforcing said bollock laws.

[Jakers]

I agree. Miners need fiat for juice and hardware. Sellers of illegal good need fiat for food, clothing and shelter. It's far from obvious that a majority of bitcoin trades are for illegal goods.

There's a lot more illegal activity that Bitcoins are used for than you may think. If you explore the DeepWeb you'll see what I'm talking about. The people doing illegal activities are usually the ones making the most money, because, well, for one they're taking the most risk. They're taking advantage of risky services without the risk involved. It all comes back to the anonymity Bitcoin provides. If somebody wanted to sell 100M's worth of guns and drugs, there best option would be to use BTC, because it offers absolutely no paper trail whatsoever.

[cedivad]

I agree. Miners need fiat for juice and hardware. Sellers of illegal good need fiat for food, clothing and shelter. It's far from obvious that a majority of bitcoin trades are for illegal goods.

There's a lot more illegal activity that Bitcoins are used for than you may think. If you explore the DeepWeb you'll see what I'm talking about. The people doing illegal activities are usually the ones making the most money, because, well, for one they're taking the most risk. They're taking advantage of risky services without the risk involved. It all comes back to the anonymity Bitcoin provides. If somebody wanted to sell 100M's worth of guns and drugs, there best option would be to use BTC, because it offers absolutely no paper trail whatsoever.

Except that you can't sell 100M of bitcoins. In every sense.

I don't think that you can prove your statement, anyway. It's just your tought.

[Jakers]

I used that number as an example. I also just proved my statement, the forums on the Deepweb are bigger than this, and there are 100's of them. Even the biggest profitable section of this forum is illegal. At least for about 90% of the forum. Do you have any statements to back up why you think it isn't used for a large majority of illegal activities?

[hope2907]

http://evoorhees.blogspot.com/2012/04/bitcoin-libertarian-introduction.html

following topic will help you figure out why bit won't be illegally

[b!z]

Well, it's obvious that the large majority of Bitcoin usage goes toward illegal activities.

Care to prove that statement? Most of the Bitcoin trading I've done here, or even seen here on the forums, has been pretty legal.

Are you sure that Bitcoin Talk is where the large majority of Bitcoin transactions take place?

[Atruk]

I can't really think of a way to make BTC illegal. Unless everything related to computers become illegal as well.

Not exactly "a way" per se, but the US gov technically "owns" the sha2 encryption algo, and can disallow the use of it. Still, the enforcement would be tricky.

No. All publications by the US government are in the public domain. The GPO may have a nominal charge if you want something on paper, but everything the US Government makes available is completely unrestricted by copyright. When the NSA published suite B which includes SHA-256 and ECDSA they both became public domain. Actually they became that earlier in the process of being proposed for inclusion in suite B.

Anyone saying either algorithm is encumbered by patent or copyright is spreading FUD.

[cedivad]

I used that number as an example. I also just proved my statement, the forums on the Deepweb are bigger than this, and there are 100's of them. Even the biggest profitable section of this forum is illegal. At least for about 90% of the forum. Do you have any statements to back up why you think it isn't used for a large majority of illegal activities?

The problem of the proof stands to who brings up the theory - show me these deep web forums.

[Jakers]

I used that number as an example. I also just proved my statement, the forums on the Deepweb are bigger than this, and there are 100's of them. Even the biggest profitable section of this forum is illegal. At least for about 90% of the forum. Do you have any statements to back up why you think it isn't used for a large majority of illegal activities?

The problem of the proof stands to who brings up the theory - show me these deep web forums.

Here's a post where I describe a site from the Deep-Web in depth   - https://bitcointalk.org/index.php?topic=135976.msg1448469#msg1448469

[kbroadfoot]

http://en.wikipedia.org/wiki/Fear,_uncertainty_and_doubt

Look for FUD first, before the effort to eradicate begins...

I am a bit suprised this has'nt happened form a company you can "trust" i.e. instead of Bitcoin why isn't there YahooCoin or MSCoin?

Patrick

[turboNOMAD]

It's already 12 days into 2013 here where I live and Bitcoin was still legal last time I checked. Hanging on for further updates...

[erik555]

it would be easy to make bitcoin illegal.... but MUCH harder to cripple or eradicate it completely... so doubt they'll even bother making laws on it