2013-01-23 Mencius Moldbug has a new essay on Bitcoin

[cloudswrest]

http://unqualified-reservations.blogspot.com/2013/01/how-bitcoin-dies.html

He's very pessimistic politically.  Expects the USG to get very nasty.

[nguoinhaque]

I believe bicoin and other virtual/digital currencies are the only means that help US and Europe prevent chinese currency becoming a world currency when china GPD surpass or even triple US GDP. So they will silently support bitcoin instead of killing it. The recently ECB's report is an indication

[n8rwJeTt8TrrLKPa55eU]

I generally like Mencius' blog, but he's dead wrong here.  I think he's just trolling for pageviews.
 
No prohibition in all of history has driven the price of the prohibited item to zero.  Quite the opposite.

[marcus_of_augustus]

FUD-spreading view-troll coward.

I feel slimy just by clicking on that link, euchh.

[ShadowOfHarbringer]

No prohibition in all of history has driven the price of the prohibited item to zero.  Quite the opposite.

Yep. I think that USA attacking Bitcoin would confirm that it is valuable and that it is a threat to dollar hegemony.

If the Chineese are smart enough, they should then start massively buying Bitcoin to undermine US dollar monopoly. I suspect chineese don't like dollar very much, but are forced to use it, as is everybody.

[Gabi]

What a fail article, tons of FUD and fail

[grondilu]

Someone made this comment:

I stopped reading here: "The evidence: the defendants knew that BTC were used for organized criminal activity." You don't know what you are spewing here. First, how do I *know* anything? What evidence is there? Do I have a suspicion that there are shady characters that use bitcoin to further their own criminal interests? Sure. But that happens everytime I invest in the stock market here, too. I suppose I am guilty of money laundering for purchasing and investing with the USD when Bernie Madoff was committing securities fraud, or because my dollar ends up as change when a drug dealer buys a Big Mac and is handed one of my $1 bills as change. Don't be silly.

Not sure there is much more to say.

They can indeed prohibit BTC exchanges, but I doubt they'll use such a lame excuse.

[nevafuse]

This is definitely the worse case scenario.  Just look at poker's Black Friday or megaupload's fate.  But there are key differences here.  Bitcoin is not even close to as popular as online poker or megaupload.  Megaupload had a single point of failure versus having multiple bitcoin exchanges.  Online poker may be cut off in the US, but it isn't cut off in other countries.  Poker continues to thrive in the US in person, just like local in-person bitcoin exchanges can.

Don't get me wrong.  It could still kill or severely hinder bitcoin.  And I do agree that a government crackdown is a very likely event.  I'm anxious to see what new ideas people will come up to remove these weaknesses.  I really hope bitcoin grows to a state where it can survive being cut off from easy currency conversion.

[Gabi]

But megaupload is back as MEGA 

[TraderTimm]

My attempt to right that crooked ship is below:

Mencius, your first point regarding a DOJ indictment on an edge-exchange seems to ignore the fact that any kind of prosecution on a decentralized system ever results in long-term harm to that system. Big media companies using collective suits against bitorrent users, for example.

This has hardly stopped any use of the protocol. To the contrary, it has only increased its popularity as people who have never had an inclination such things were going on became informed through various articles on the subject.

Then you assert that because one edge exchange is impacted, and for the sake of the argument lets just assume there was one successful shutdown, that the overall valuation of bitcoin would fall to zero.

While the users of that exchange would certainly be hurt by such an action, the rest of the network would shrug and move on. There are other avenues besides edge-exchanges, and when bitcoin reaches its full potential, they won't be relevant anymore.

You then invoke the general fear-mongering strategy of suggesting a major government would ban the use of bitcoin - again ignoring that it would most likely encourage its use.

As for the rest of your article, you touch on the usual debunked myths such as "hoarding will kill bitcoin", and some rather long rambling about how well the shutdown would kill the network. (It won't, as I described earlier.)

The crowning jewel on the entire affair is how at the end you advocate gold being resistant to government prosecution and seizure, which is laughable in light of its density and material qualities that lend it to detection when carried in refined form.

I'm afraid that suitcase of gold in the lining won't be making it through the airport, while the transfer of wealth across the internet using bitcoin won't even weigh down the traveler using it.

Then again, that is all this piece is - a lot of hyperbolic reasoning sewn together with a rather unrealistic view of government efficiency.

Good luck, you'll need it with that cognitive bias dragging you down.

[cypherdoc]

My attempt to right that crooked ship is below:

Mencius, your first point regarding a DOJ indictment on an edge-exchange seems to ignore the fact that any kind of prosecution on a decentralized system ever results in long-term harm to that system. Big media companies using collective suits against bitorrent users, for example.

This has hardly stopped any use of the protocol. To the contrary, it has only increased its popularity as people who have never had an inclination such things were going on became informed through various articles on the subject.

Then you assert that because one edge exchange is impacted, and for the sake of the argument lets just assume there was one successful shutdown, that the overall valuation of bitcoin would fall to zero.

While the users of that exchange would certainly be hurt by such an action, the rest of the network would shrug and move on. There are other avenues besides edge-exchanges, and when bitcoin reaches its full potential, they won't be relevant anymore.

You then invoke the general fear-mongering strategy of suggesting a major government would ban the use of bitcoin - again ignoring that it would most likely encourage its use.

As for the rest of your article, you touch on the usual debunked myths such as "hoarding will kill bitcoin", and some rather long rambling about how well the shutdown would kill the network. (It won't, as I described earlier.)

The crowning jewel on the entire affair is how at the end you advocate gold being resistant to government prosecution and seizure, which is laughable in light of its density and material qualities that lend it to detection when carried in refined form.

I'm afraid that suitcase of gold in the lining won't be making it through the airport, while the transfer of wealth across the internet using bitcoin won't even weigh down the traveler using it.

Then again, that is all this piece is - a lot of hyperbolic reasoning sewn together with a rather unrealistic view of government efficiency.

Good luck, you'll need it with that cognitive bias dragging you down.

Nice

[cypherdoc]

I believe bicoin and other virtual/digital currencies are the only means that help US and Europe prevent chinese currency becoming a world currency when china GPD surpass or even triple US GDP. So they will silently support bitcoin instead of killing it. The recently ECB's report is an indication

Intriguing idea.  I too have always thought that gubmints might actually step up one day and say this is a good idea.