Surviving government crackdown

[Sjalq]

http://www.chicagotribune.com/news/politics/sns-rt-us-financial-bitcoitre7573t3-20110608,0,6328122.story

So what lets say they outlaw MtGox on a knee jerk. What do you folks think will happen to the Bitcoin economy as it adapts?

[Meatball]

Man, if they do, that's idiotic.  That's like outlawing ATM's because I can take my cash out and go do something illegal with it

[digdugg67]

so they outlaw mt.gox where in the us only or world wide?
peeps transfer into bitcions, put it in their wallets and move to the next exchange.
Mt. Gox reforms in Iceland we split our BTC's between Mt.Gox and BitCoinMarket and carry on as normal

[dannickherpderp]

The US government won't like it, but it the same way they shut down napster but can't shut down bittorrent I don't think they can really put a cap on this.  it's too decentralized, there is no Bitcoin HQ.

[piuk]

I doubt they could just "outlaw" it, but i bet they could certainly tie it up in a lot of regulation similarly to what they did with e-gold (http://en.wikipedia.org/wiki/E-gold). However I think Mt.Gox is run from japan? So i don't know if the same laws apply.

With Mt.Gox handling nearly 95% of bitcoin exchanges I think in the short term the market would react badly (perhaps a 50%+ drop, maybe more). The #bitcoin-otc irc channel would become a mass brawl. None other the other exchanges look ready for prime time at the moment, but i'm sure a new exchange would pop up fairly quickly and the price would slowly recover (more cautious than before). Maybe instead of a new centralised exchange some clever nut will develop a p2p one.

My 0.2cent

[Sjalq]

I doubt they could just "outlaw" it, but i bet they could certainly tie it up in a lot of regulation similarly to what they did with e-gold (http://en.wikipedia.org/wiki/E-gold). However I think Mt.Gox is run from japan? So i don't know if the same laws apply.

With Mt.Gox handling nearly 95% of bitcoin exchanges I think in the short term the market would react badly (perhaps a 50%+ drop, maybe more). The #bitcoin-otc irc channel would become a mass brawl. None other the other exchanges look ready for prime time at the moment, but i'm sure a new exchange would pop up fairly quickly and the price would slowly recover (more cautious than before). Maybe instead of a new centralised exchange some clever nut will develop a p2p one.

My 0.2cent

+1

I think the closure of MtGox will depress the price to $0 for a while and then it will skyrocket up again.

[zef]

If anything they could potentially slow the growth, but not shut things down.  They could make it very difficult to convert between currencies, demonize it, legislate against it, etc.

Things of that nature would really slow bitcoin down by making it less accessible to the average person.  I could see something like this happening, as the demonizing campaign has already been started.

[SinkBlade]

I doubt they could just "outlaw" it, but i bet they could certainly tie it up in a lot of regulation similarly to what they did with e-gold (http://en.wikipedia.org/wiki/E-gold). However I think Mt.Gox is run from japan? So i don't know if the same laws apply.

With Mt.Gox handling nearly 95% of bitcoin exchanges I think in the short term the market would react badly (perhaps a 50%+ drop, maybe more). The #bitcoin-otc irc channel would become a mass brawl. None other the other exchanges look ready for prime time at the moment, but i'm sure a new exchange would pop up fairly quickly and the price would slowly recover (more cautious than before). Maybe instead of a new centralised exchange some clever nut will develop a p2p one.

My 0.2cent

+1

I think the closure of MtGox will depress the price to $0 for a while and then it will skyrocket up again.

Without an operational exchange, how could the price go to $0?  There's only a US currency equivalent as long as there is a mechanism for converting to US currency...

[Sjalq]

Resale value to anyone except hardcore bitcoiners will be near $0 on a practical level.

[Hans0]

They won't outlaw Mt gox. That makesn o sense. They woll outlaw trade and possession of bitcoin because of money laundry and being an alternative currency. US citizens are required to use the USD. It is illegal right now.

[datguywhowanders]

They won't outlaw Mt gox. That makesn o sense. They woll outlaw trade and possession of bitcoin because of money laundry and being an alternative currency. US citizens are required to use the USD. It is illegal right now.

Could you cite your sources please?

[em3rgentOrdr]

Really don't need a USD to bitcoin exchange.  Hopefully if mtgox gets shut down, then people would be more likely to offer goods and services in order to get a hand on some precious bitcoins, thus improving bitcoin economy.

[marhjan]

The US government, and likely other world governments as well will certainly attempt to outlaw Mt Gox and Bitcoins in general.  They will likely succeed in completely shutting down or at least drastically changing the way Mt Gox operates.  I think this is why most Bitcoin transfers will ultimately be OTC or via distributed markets.  We all know that Paypal has refused to do any more transactions with Mt Gox, but you can easily transfer Paypal as either 'Payment Owed' or 'Gift' options with no Paypal protections, but also no way of them knowing what the transactions are ultimately for.  I think it's safe to say there are few big fans of big government here, and we need to work on developing alternative marketplaces/exchanges to keep the enforcement officers jumping through so many hoops that ultimately Bitcoins can stand on their own.

[Hans0]

They won't outlaw Mt gox. That makesn o sense. They woll outlaw trade and possession of bitcoin because of money laundry and being an alternative currency. US citizens are required to use the USD. It is illegal right now.

Could you cite your sources please?

Regarding required use, I could not find it quickly but I am pretty sure no second currency is allowed.
Regarding laundry, look at http://bitcoinlaundry.com/. I steal money from a bank, buy bitcoins, launder them and cash out to USD. Easy.

[benjamindees]

Could you cite your sources please?

My guess is that, in their zeal to sell fraudulent securities to foreigners, US banks and media have perpetrated the myth that they are all backed by ignorant, hard-working Americans who are forced by law to use the Dollar for everything.

[Hans0]

They won't outlaw Mt gox. That makesn o sense. They woll outlaw trade and possession of bitcoin because of money laundry and being an alternative currency. US citizens are required to use the USD. It is illegal right now.

Could you cite your sources please?

Interesting, by point that alternative currencies are illegal in the US seems to be wrong. I believe it to be true in euro countries though where I live. The point about money laundering is correct though.

[datguywhowanders]

Oh I agreed with the money laundering part, and I know that businesses and especially exchanges have to adhere to strict laws in order to be in compliance in that regard.

I was taking issue with the bit about being mandated by law that we use the USD as our currency. I don't believe such a law exists.

[Hans0]

I was taking issue with the bit about being mandated by law that we use the USD as our currency. I don't believe such a law exists.

I head of it a few times and it sounded plausible because an alternative currency destabilizes the primary one. If nobody uses the USD anymore the US could use their printed money anymore to pay anybody. Everyone knows that the US cannot live without increasing dept or printing money. That potentially threatens the live of a nation.

[datguywhowanders]

It sounds plausible sure, but until I see it in writing attached to a recognized body of our government, it is nothing more than a rumor.

[hawks5999]

TradeHill.com is probably lobbying congress right now for mt gox to get shut down.

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