What if the US Government forced exchanges to close?

[bootmii]

Every heard of the website Megaupload?  So far, the US hasn't been able to extradite the executives of this website, but they got what they wanted.  They were able to shut down Metgaupload without any due process.

You mean they didn't get a conviction against Kim Dotcom, and they only got him to launch the all new Mega, which is generally a huge improvement and step forward from the old Megaupload.

Or what about The Pirate Bay. They've been trying to shut that down for years.. to no avail whatsoever

If exchanges were actually being forced to close (which I don't see happening), we'd see new exchanges appearing immediately on TOR, darknet, freenet, China, and whatnot.

No sir, there's no stopping Bitcoin for governments, bankers, or anyone.

Exactly. The US has no power over foreign banking (with the exception of outlying territories and Japan) to speak of.

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[marcusrider]

It would be interesting if they tried to close the exchanges.

[Lethn]

And hilarious, since we know that most politicians and police officers can't even use a computer for things like browsing the internet without help.

[TheButterZone]

Who's "we"?

[Gabi]

The US government forcing something on europe? Lol will they bomb us with drones?

Remember that america is not the world

[Troutner]

Well, think about how pirate bay and mega upload keep going, if it's hated by the U.S government people will want to use it just to piss them off even more ( like I do ) I suspect it will be a similar outcome with Bitcoin, they'll try to attack it and shut it all down but people are just going to ignore them or find ways round it.

In my mind, bitcoin is even more robust than Mega or Pirate Bay because it is inherently distributed. Mega and Pirate Bay were able to survive because of their distributed nature, but bitcoin is far more distributed than either of them.

[nanaimogold]

Sorry for my newbie questions.  I'm totally new to bitcoins.

Is it possible that the US government could shut down bitcoin exchanges?
The kind that let you buy fiat currencies?

Thanks
Newbalicious 

Oh yeah, it will happen soon. The USSA ran off or imprisoned all the exchangers in '07. The ones that have started up there since are mostly still tiny but they will certainly get their turn.

Simply; It is illegal to gamble online in Usania therefore anything their inmates win is considered "proceeds of crime". Any exchanger cashing out gamblers in Merika is laundering money and a "special kind of terrorist".

The serious exchangers exist mostly in Russia and Canada.

[blockgenesis]

To me it seems more likely that any (wise) attempt to break Bitcoin will aim to depreciate its reputation and popularity. Not to bring any light on Bitcoin.

For instance, we could think of many previous things that happened (pirate with its massive theft, MT.Gox being hacked, etc.) If any of these events is related to some organisation trying to demolish Bitcoin, then we can say the job has been well done. Now a lot of people believe that Bitcoin itself has been hacked in the past.

Yet all of this didn't succeed to kill Bitcoin. So it might perhaps help Bitcoin in the end, with a long term perspective.

To me, the best that can be done to harm Bitcoin is to *maintain fear and misconception about it*, by :

- Make Bitcoin economy unstable with massive buy and sell.
- Generate new bad events related to Bitcoin businesses.
- Moderately and strategically use the medias to maintain fear.

Nevertheless, politicians demonstrated many times in the past that they are not scared to look like fools. Therefore I guess we cannot predict what's next with exactitude.

Not to forget that there is 190+ countries in this world..

[b!z]

There would still be exchanges operating in other countries.

[Troutner]

I think blockgenesis has the right idea. Disinformation and undermining the integrity of bitcoin is the only way I see the governments effectively going after bitcoin. Going after exchanges would create a hydra - chop off one head and another would sprout. After all. Any single person willing to exchange bitcoins for an establish currency is an 'exchange'. Just like our personal computers are a 'server' for the bitcoin network.

[MagicBit15]

That is the great thing about bitcoin. It is a decentralized P2P network. It would be like the government trying to "stop" Kazaa, Napster, Torrents, Newsgroups, IRC, any other file sharing network. They can only work in their jurisdiction. And they can only "block" so much of the internet usually things pertaining to copyright. You can even still download Kazaaa Lite I think if you really want to today? In the case of bitcoin, it is not even sharing copyrighted material. It has been discussed on news outlets with minimal disdain, discounting corrupt governers or politicians that in my opinion can blow a sack of you know what anyway. It was even on foxnews recently, with jon stossel who seemed to be in favor of the coin.

What it comes down to is, bitcoin is not illegal, it is an online currency. It honestly has about as much merit as facebook coins and pogo bucks. The part the government doesn't like about it is the face value, they have no control of it, and they think it devalues the U.S. Dollar. (There is other issues as well such as the black market, but I mean come on, countries are the ones who created "cash" in the first place, the main source of currency in the black market globally. Not many c*ke dealers accepting visa. Yet they endorse U.S. dollar like its gold.) Another thin is and may become more is popularity, which again rises and falls with any type of currency from ANYWHERE in the world. In fact, just like any other currency, it supports economies, and can be converted to almost any currency just like ANY other country. It is rising in popularity and success, and I must say it is quite impressive.

And While I do see some problems with bitcoin, I do not see the U.S. government shutting it down becoming an issue. I say stock up know as much extra as you can afford or now. And if you were super early adopter GL!!

[PetraGeisel]

Sorry for my newbie questions.  I'm totally new to bitcoins.

Is it possible that the US government could shut down bitcoin exchanges?
The kind that let you buy fiat currencies?

Thanks
Newbalicious 

i'm sure they will try at some point and fail miserably

[hanwong]

The US government would only have power to shutdown exchanges running on servers hosting in the USA. Any other exchanges would have to be shut down by the appropriate country their hosting recides in. Obviously USA would and could try to pressure them into closing it, but that would be a gamble at best.

A Gamble?  I think the US Government still has enough firepower to be very persuasive.  

Thanks
TW

Of course.  Bitcoin is such a threat the US is going to engage in a shooting war to force other nations to shut down exchanges.  Shit if they did that Bitcoin would probably be $329,038 USD per BTC because it would be downright proof of the power of Bitcoin.  Nobody spends bilions going to war to destroy something which doesn't matter.  We didn't see the great Flooz War of 1999 for example.

If the US banned exchanges it would simply push them into offshore locations (which have long since flipped the bird at the US when it comes to banking regulations).  In the short term that would be negative, BTC price would likely tank overnight, but longer term BTC would emerge even more powerful and people would point to the failed US action as both a sign of the threat that BTC represents to the established powers and the resiliance of the global network.

I doubt the US would make a move like that.  Regulate and tax is far more effective than ban and lose all control.

regulate and tax? go tell that to the DEA and all our failed drug warriors. never underestimate the irrationality of a politician.

let me lay out a scenario...
some kid has bitcoins goes on Tor and buys some guns cuz they just passed some new gun laws that made it illegal for him to buy guns at his local gunshop. he takes those guns shoots up a school. investigators later find out that he used USD he earned working at McD's opened up an account with dwolla, exchanged USD to BTC on bitinstant, signed onto TOR, bought a gun anonymously on a hidden service and I'll let the media and the politicians write the rest of that story...

[dakiller]

Just off the top of my head, things that those in power have tried to control manage to have the opposite effect -

Barbra Streisand Effect - supressing something makes it more popular
The Pirate Bay - look at all the silly takedown requests that people send for the pirate bay to just laugh back at their face

Just the lack of jurisdiction would make this fail so bad, the US government would have to put some big pressures on Japan to make MtGox shutdown, I don't see the Japanese bending over that much

[xxjs]

The US government forcing something on europe? Lol will they bomb us with drones?

Remember that america is not the world

And the U.S of A. is even smaller.

[TimJBenham]

Most of you are underestimating the power of the US government to make Americans' lives worse. They could take an UIEGA like approach making it illegal for Americans to deal with offshore exchanges and making it illegal for offshore exchanges to deal with Americans. UIEGA killed off a large percentage of the offshore gambling opportunities available to Americans and made the remaining ones both more difficult to deal with and less trustworthy. Sportsbooks in almost all first world countries no longer accept US customers. The shady ones that are left have to send and receive money through slow and expensive means such WU to dummy beneficiaries.

[bwstacker]

  The only way that this can be done is to regulate internet connections. Just like they did on black friday. But even on offshore exchanges. We can still reach them through TOR.

[btcgdi]

The US government would only have power to shutdown exchanges running on servers hosting in the USA. Any other exchanges would have to be shut down by the appropriate country their hosting recides in. Obviously USA would and could try to pressure them into closing it, but that would be a gamble at best.

Very similar to gambling sites but still residing & participating in a country that bans it regardless of where it's being hosted isn't always the safest idea.

[TimJBenham]

  The only way that this can be done is to regulate internet connections. Just like they did on black friday. But even on offshore exchanges. We can still reach them through TOR.

Of course they cannot stop you from reaching the sites without taking draconian measures. They can however make it very difficult to deal with them. If transfering to BTC in-country is illegal and all financial institutions are banned from dealing with known offshore exchange(r)s then the current USD -> BTC ecosystem is broken. If you substitute gambling for BTC this is essentially what UIGEA did. Hardcore users will find ways around it but any dream of millions of Joe Averages shifting part of their savings or business to BTC is dead.

Americans underestimate the power of their state. Congress makes laws regulating what foreigners do in foreign countries and 90% of the time countries that want to remain on friendly terms with the US -- like  Japan,  Australia, Canada, most of Europe, any pissant country that relies on aid etc -- bend over and take it. Countries like Russia, Iran, China and Venezuela give the middle finger, but they are exactly the places you would be wary of dealing with.

[Grey]

What I'm getting from this thread is that shutting down the internet is the best way to shut down bitcoin.

What ever happened to these guyshttp://www.popsci.com/technology/article/2012-01/german-hackers-are-building-diy-space-program-put-their-own-uncensored-internet-space? Something like that would make it a hell of a lot harder to kill bitcoin off...