An open letter to the US government, the Federal Reserve and Schumer

[Piper67]

AN OPEN LETTER TO THE US GOVERNMENT, THE FEDERAL RESERVE AND, IF HE CAN READ, SENATOR SCHUMER

Before we start, ask someone to go get you a geek. You'll probably have to look deep, past the regular suits. Your geek is likely between 25 and 35, longish hair and glasses. Could be male or female, but for the purposes of this letter, he's called Bobbi. A distinct glaze crosses his eyes whenever he talks about the Internet, cryptography, nodes, software and networks... That's your geek.

Now, there is something called Bitcoin happening, and there are those who want to shut it down. Some are calling bitcoin a currency, or a crypto-currency. Some call it a commodity. The thing to remember here is that it exists, it is more secure than money in the bank, less counrfeitable than any currency or commodity available today, deflationary by its very nature and remarkably easy to move around. It is also already being transacted, and increasingly so with each passing day.

Tell Bobbi you are going to ask him some questions, and that you want short answers. I'm doing this for your benefit, otherwise it will take all day.

Ask Bobbi: is it possible to shut down a p2p network? If Bobbi says yes, fire him... He doesn't know what he's talking about. But he won't, because you wouldn't have hired a complete incompetent fool, would you? He'll say either "no", or "not without shutting down the internet".

Senator Schumer and some others are trying to push the government to shut down Bitcoin, without realizing how fruitless and expensive it will turn out to be. Ostensibly, they fear that a digital currency like bitcoin can be used to buy drugs and launder money... In reality, though, they probably realize how dangerous such a currency or commodity can be for the US. And they're right.

But there is an alternative to engaging a new war on bitcoin, which you stand no more chancenof winning than the war on drugs, or porn, or music downloads: you don't want to shut down bitcoin, you want to control it.

Here's what I propose,go out and buy bitcoin, lots of them. There are only 6.5 million or so in existence, try and get around a million. Today, you could do that for just under 30 million dollars. Yes, prices will shoot up, and yes, you'll make a few millionaires along the way, but think: you would control one sixth of this new, safe, uncounterfeitable, deflationary and scalable commodity.

Then, enourage a free, open and healthy trade in bitcoins. Let the banks offer their customers bitcoin accounts, allow bitcoin exchanges to flourish. Let people of all stripes own theirs. You will be able to control and regulate the market. Want to take US dollars out of the economy? Sell some BTC. Want to counter the onslaught of depreciated goods from China, pump BTC into their economy (they won't be any more successful at shutting it down than you will). Make sure you keep buying, and even start your own mining operations, so that you always control a large enough chunk of the BTC economy to ensure it's value... That will keep the money in your pockets, and will prevent the rise of competing crypto-currencies.

Give Bobbi a raise and put him in charge of the crypto-currency department, so that if anyone comes up with a bitcoin clone, he'll be the first to know and you'll control that one as well, for mere pennies in that case.

Or... Try and shut down the internet... But I think my idea is cheaper.

[swusc2]

While I don't fully agree with governments controlling Bitcoin. I do agree with them having their share of it. It's the fundamental idea of Bitcoin decentralized currency, anyone and everyone can use it. If Bitcoin does end up getting big maybe one day it will be regulated by its own international institution. But I do agree with regulation, while government will have be more readily adopting of it, Bitcoin should work together to regulate the illegal activity within their borders.

The narration is different but very effective I like.

[Piper67]

Actually, the more I think about it, the more sense it makes for some other government, notably the Chinese, to try this... Just imagine if they, not the US, were able to control the crypto-currency market!

[tvbcof]

Actually, the more I think about it, the more sense it makes for some other government, notably the Chinese, to try this... Just imagine if they, not the US, were able to control the crypto-currency market!

The Chinese currently have a tool which gives them a means to control Bitcoin that the US and Western countries currently lack.  Namely, a revolver round applied to the back of the head.

I suspect that the Chinese government will not take to your idea, not because it is not a good one, but rather because it is simply the antithesis of orthodoxy to an authoritarian regime.

Don't get me wrong...I am not anti-Chinese or even anti-Chinese government in a 100% way.  I suspect that the current government since Xiaoping has in fact done about as well for their people as is possible.  But I do hope that the people attain the freedom they deserve when the time is right.

The Chinese government does seem both far sighted and astute.  I still expect that we'll see Chinese anti-bitcoin methods employed in the West before you idea is adopted by China however.

[TheBitMan]

People can buy drugs with paypal just by sending money to someone along with all the other "e-money" websites out there. Schumer just doesn't know what it is and sees anything the government doesn't make money off of as a threat.

[cbeast]

We are seeing change everywhere. The internet has changed everything from globalization to cultural exchange. Bitcoin is simply the next evolutionary step that cannot be stopped any more than than the internet itself. You can burn books, but you cannot burn bits.

[Piper67]

Actually, the more I think about it, the more sense it makes for some other government, notably the Chinese, to try this... Just imagine if they, not the US, were able to control the crypto-currency market!

The Chinese currently have a tool which gives them a means to control Bitcoin that the US and Western countries currently lack.  Namely, a revolver round applied to the back of the head.

I suspect that the Chinese government will not take to your idea, not because it is not a good one, but rather because it is simply the antithesis of orthodoxy to an authoritarian regime.

Don't get me wrong...I am not anti-Chinese or even anti-Chinese government in a 100% way.  I suspect that the current government since Xiaoping has in fact done about as well for their people as is possible.  But I do hope that the people attain the freedom they deserve when the time is right.

The Chinese government does seem both far sighted and astute.  I still expect that we'll see Chinese anti-bitcoin methods employed in the West before you idea is adopted by China however.

It really does depend whether the Chinese have their own equivalent of Bobbi... I agree with you that bitcoin is the antithesis of orthodoxy. But seen in the right light, it also happens to be the antithesis of corporate-driven capitalism.

I, for one, am very curious as to what tack they will take. The fact that they've been conspicuously silent so far is somewhat telling, in view of the fact that articles on Bitcoin have even been published in popular Chinese newspapers. Let's hope their far sightedness and astuteness wins over any potential knee-jerk reactions.

I recently heard someone say, in reply to the question: Does the 21st century belong to China? "Of course it does, pretty much like every other century before it except for the 19th and the 20th". There's something to that, isn't there?

[spruce]

Has anyone worked out (and put online) a sensible report on how the current global powers-that-be (the real ones, not the visible puppets) could benefit from adopting bitcoin bigtime? This would include the dark operations as well as those in plain view.

I don't know if there would be any benefit or not in them using bitcoin instead of — or in addition to — existing currencies. I haven't seen any argument either way. I know existing holders of bitcoin would benefit by the price going way up, but that isn't my question.