What could really stop bitcoin now?

[shawshankinmate37927]

In this scenario I would expect a serious drop in demand and price for Bitcoin.

Funny, as I would expect an increase in both demand and price in this scenario.

And why would demand increase if it becomes illegal for business owners to accept Bitcoin?

I assume part of Bitcoins recent increase in price comes from the increased expected use as medium of payment in all kinds of companies.  

If this expected use as medium of payment drops because Bitcoin is banned from legal use in USA and Europe I can not see another outcome than a drop in price.

Please explain.

For example, selling drugs in the USA is illegal, but is very profitable for those who are willing to break the law.  When bureaucrats make a product illegal, those who supply it are able to demand a premium.

[twolifeinexile]

In this scenario I would expect a serious drop in demand and price for Bitcoin.

Funny, as I would expect an increase in both demand and price in this scenario.

And why would demand increase if it becomes illegal for business owners to accept Bitcoin?

I assume part of Bitcoins recent increase in price comes from the increased expected use as medium of payment in all kinds of companies. 

If this expected use as medium of payment drops because Bitcoin is banned from legal use in USA and Europe I can not see another outcome than a drop in price.

Please explain.

It depends on the point in time that the law is announced, if bitcoin is welll established in social fibre, then the ban should and will cause a big price drop and reasonablely so. If too early like as of now, it may spark interest and draw unwanted attention. If it happened in the middle phase, then I am not sure.

[wachtwoord]

In this scenario I would expect a serious drop in demand and price for Bitcoin.

Funny, as I would expect an increase in both demand and price in this scenario.

And why would demand increase if it becomes illegal for business owners to accept Bitcoin?

I assume part of Bitcoins recent increase in price comes from the increased expected use as medium of payment in all kinds of companies. 

If this expected use as medium of payment drops because Bitcoin is banned from legal use in USA and Europe I can not see another outcome than a drop in price.

Please explain.

For example, selling drugs in the USA is illegal, but is very profitable for those who are willing to break the law.  When bureaucrats make a product illegal, those that supply it are able to demand a premium.

Indeed. Think liquor prices during the prohibition. (I imagine liquor prices are still inflated in dry US counties by I don't know. I do know prices are inflated in middle eastern countries that ban alcohol)

[FireBlazzer]

In this scenario I would expect a serious drop in demand and price for Bitcoin.

Funny, as I would expect an increase in both demand and price in this scenario.

And why would demand increase if it becomes illegal for business owners to accept Bitcoin?

I assume part of Bitcoins recent increase in price comes from the increased expected use as medium of payment in all kinds of companies. 

If this expected use as medium of payment drops because Bitcoin is banned from legal use in USA and Europe I can not see another outcome than a drop in price.

Please explain.

For example, selling drugs in the USA is illegal, but is very profitable for those who are willing to break the law.  When bureaucrats make a product illegal, those that supply it are able to demand a premium.

Indeed. Think liquor prices during the prohibition. (I imagine liquor prices are still inflated in dry US counties by I don't know. I do know prices are inflated in middle eastern countries that ban alcohol)

thats true... same for marijuana and prosutution.

marijuana should be 3 -5 dollers a gram or so retail... its about 20 a gram for the good stuff now.

prositution should be about 30 bucks a lay in a free market.... now its like 100 bucks

[Snowfire]

The EU is a great deal less cohesive than you realize; it is riven with ethnic fault lines and old animosities. The ECB's remit extends only to the 17 Euro zone nations, not even the entire EU. And the EU and US constitute together less than half the world economy, even if this scenario comes to pass. A  ban in the US alone would have even less effect; Bitcoin is not originally or primarily an American phenomenon.

How would such a ban be couched? If targeted purely at Bitcoin, that would just leave the door wide open for Litecoin, et al. to rush in and fill the gap. If targeted broadly at any negotiable instrument not explicitly denominated in local national currency, that would cause a lot of collateral havoc--possessing Euros in the US could suddenly be a punishable offense, for example, in addition to  the other things I detailed above. I am just not convinced that it is going to happen, though I admit it as a slight probability.

Gold was confiscated before because governments needed it for their own use. Bitcoin is not gold, and cannot fulfill gold's role for a government. The parallel is questionable. A government might object to Bitcoin on prior legal principle, but to suppose that the miniscule Bitcoin economy is a threat to the stability of the larger economy is probably ridiculous.

[wachtwoord]

prositution should be about 30 bucks a lay in a free market.... now its like 100 bucks

The market is free in the Netherlands but a quick search on the Dutch ebay for prostitution www.kinky.nl yields $100 US is pretty much the standard.

[twolifeinexile]

The EU is a great deal less cohesive than you realize; it is riven with ethnic fault lines and old animosities. The ECB's remit extends only to the 17 Euro zone nations, not even the entire EU. And the EU and US constitute together less than half the world economy, even if this scenario comes to pass. A  ban in the US alone would have even less effect; Bitcoin is not originally or primarily an American phenomenon.

How would such a ban be couched? If targeted purely at Bitcoin, that would just leave the door wide open for Litecoin, et al. to rush in and fill the gap. If targeted broadly at any negotiable instrument not explicitly denominated in local national currency, that would cause a lot of collateral havoc--possessing Euros in the US could suddenly be a punishable offense, for example, in addition to  the other things I detailed above. I am just not convinced that it is going to happen, though I admit it as a slight probability.

Gold was confiscated before because governments needed it for their own use. Bitcoin is not gold, and cannot fulfill gold's role for a government. The parallel is questionable. A government might object to Bitcoin on prior legal principle, but to suppose that the miniscule Bitcoin economy is a threat to the stability of the larger economy is probably ridiculous.

Legally, bitcoin belongs to "negotiable instrument"?
Any similar legal precedence we can derive this categorization?

[Snowfire]

The EU is a great deal less cohesive than you realize; it is riven with ethnic fault lines and old animosities. The ECB's remit extends only to the 17 Euro zone nations, not even the entire EU. And the EU and US constitute together less than half the world economy, even if this scenario comes to pass. A  ban in the US alone would have even less effect; Bitcoin is not originally or primarily an American phenomenon.

How would such a ban be couched? If targeted purely at Bitcoin, that would just leave the door wide open for Litecoin, et al. to rush in and fill the gap. If targeted broadly at any negotiable instrument not explicitly denominated in local national currency, that would cause a lot of collateral havoc--possessing Euros in the US could suddenly be a punishable offense, for example, in addition to  the other things I detailed above. I am just not convinced that it is going to happen, though I admit it as a slight probability.

Gold was confiscated before because governments needed it for their own use. Bitcoin is not gold, and cannot fulfill gold's role for a government. The parallel is questionable. A government might object to Bitcoin on prior legal principle, but to suppose that the miniscule Bitcoin economy is a threat to the stability of the larger economy is probably ridiculous.

Legally, bitcoin belongs to "negotiable instrument"?
Any similar legal precedence we can derive this categorization?

I am no lawyer. For me "negotiable instrument" is a term of convenience for something of explicitly agreed, precise value, which may be exchanged for something else.

[FireBlazzer]

prositution should be about 30 bucks a lay in a free market.... now its like 100 bucks

The market is free in the Netherlands but a quick search on the Dutch ebay for prostitution www.kinky.nl yields $100 US is pretty much the standard.

but its not a free market in the Netherlands... not at all... maby they tell you it is... but look at the laws and you see its not even close to most other products in emrs of market freedom.. its highly manipulated in the netherlands..... thats why its about 100 dollers there... same price as well in the manipulated us market.. both legel and not legel. (prostution is legel in one state in the u.s.... but manipulated like in netherlands)

in a free markets... you would find prosittion is wayyy cheaper... about 30 u.s dollers... for a free lancer girl... even some borthels
but there are very few free markets for prosuttion.

take america for exmaple.. when prositution used to be a free market...  banging a cute girl would cost you the slighty more then some beer..... now it costs you 100 times more then a beer.

[massivebitman]

It's not possible to stop Bitcoin just by making it illegal.

Totally disagree.

If the governments makes bitcoin illegal, all the exchanges will have to go bye bye. This means that bitcoin will lose mainstream adoption, and also make it a lot harder for the underground bitcoin people to operate, because at the end of the day they really need to change their BTC into cash if they want to buy anything legal... Right?

Nonsense!

Silk road is a great example of illegal things being bought and sold!

More importantly, the example of mass shooting with illegal weapons by illegal users is key in demonstrating that illegal status makes no difference
 .

Enforcement of illegal things is the key, and most governments know, most people are self enforcing. If people refuse to stop using Bitcoins, it's going to take more actions by governments to kill it.

It's not about illegal things being bought and sold, it's about the value add of bitcoin.

Individuals can easily refuse to stop using Bitcoin, but the companies which make bitcoin valuable can't. Mt Gox and the other exchanges bank accounts could be instantly frozen, and overnight bitcoin has a huge problem about buying and selling the currency that realistically couldn't be overcome.

Furthermore,
1. If bitcoin was illegal, then the majority of the people currently buying it would't be able to, and would no longer be interested.
2. With only underground exchanges left, there would be a massive oversupply of coins and the price of bitcoin would plummet through the floor.
3. Because the price is so low few people would be interested in mining.
4. Because so few people are mining, the network becomes open to 51% attacks
5. Nobody trusts the currency, and people revert to existing channels of trade.
5. Game over for bitcoin.

[altoidmintz]

Few things could shut it down right now:

1) Supercomputers getting into mining and taking over the network. Big data companies could do this, certain research institutions with supercomputing power, or government military supercomputing branches.

2) A superior alternative could render BTC unnecessary. Not that I see this scenario likely, but it is possible. If Dwolla or Ripple got their stuff together they might actually be competition.

3) Exchange hacks. If Coinbase or Mt Gox went down again we could be set back years.

That's all I got. Really #3 would only set us back though not kill us.

[DannyHamilton]

- snip -
1) Supercomputers getting into mining and taking over the network. Big data companies could do this, certain research institutions with supercomputing power, or government military supercomputing branches.
- snip -

Explain this one.  I don't understand how someone adding additional hashing power to secure the network would shut it down.

[altoidmintz]

- snip -
1) Supercomputers getting into mining and taking over the network. Big data companies could do this, certain research institutions with supercomputing power, or government military supercomputing branches.
- snip -

Explain this one.  I don't understand how someone adding additional hashing power to secure the network would shut it down.

From https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power:
   "An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to:
Reverse transactions that he sends while he's in control. This has the potential to double-spend transactions that previously had already been seen in the block chain.
Prevent some or all transactions from gaining any confirmations
Prevent some or all other miners from mining any valid blocks"

This would allow anyone with enough computing power to halt transactions of BTC. What good is BTC if you can't conduct a transaction with it?

[DannyHamilton]

- snip -
This would allow anyone with enough computing power to halt transactions of BTC. What good is BTC if you can't conduct a transaction with it?

It wouldn't necessarily stop transactions, it would only delay confirmations for the amount of time that the attacker could maintain more hashing power than the sum of all the hashing power provided by the entire honest network.

However, supercomputers are not very good at performing SHA-256 hash. If someone was going to try to provide more than 35 THash/sec they would be better off attempting to build themselves 438 ASIC that can manage 80 GHash/sec.  They better build them quickly though or the network difficulty will build and they'll need several thousand of them.

I'm not saying that a large corporation (or country) couldn't acquire enough hashing power, just that it's more difficult than it sounds, and would require more hashing power than any of them currently have available.

[taltamir]

if bit coins steps out of anomise stauts.... and is more accepted for everday tranasactions... then this could get really big.

as of now.. much of bit coins use is for gray areas of the law..... if those gray areas get sorted out.. bit coins may not be needed.... unless they can find there way into a larger amount of merchaints,,, and find a way to make it more easy to get them

it hurts my head just thinking about the invonveinces of aqquiring bit coins

There is nothing "gray" about drug cartels. Its flat out illegal. And newsflash, the vast majority of criminal activity occurs with traditional currencies rather then bitcoin
You can't just "sort out" the fact drug cartels now use bitcoin alongside traditional currencies

[FireBlazzer]

if bit coins steps out of anomise stauts.... and is more accepted for everday tranasactions... then this could get really big.

as of now.. much of bit coins use is for gray areas of the law..... if those gray areas get sorted out.. bit coins may not be needed.... unless they can find there way into a larger amount of merchaints,,, and find a way to make it more easy to get them

it hurts my head just thinking about the invonveinces of aqquiring bit coins

There is nothing "gray" about drug cartels. Its flat out illegal. And newsflash, the vast majority of criminal activity occurs with traditional currencies rather then bitcoin
You can't just "sort out" the fact drug cartels now use bitcoin alongside traditional currencies

new flash... even though the vast majoirty of crimnal actvility is used with traditional currency.....  the vast majoirty of bit coins are used to illgiel activlity.. big difference.

and yes... you can sort out the laws that make bit coins a sussues.... like making drugs legel thus people will use much more conveint feit currency rather then inconvinnt bitcoins

[pulsecat]

If the big bad US government made bitcoin illegal, it could actually make a lot of things more difficult for everyone.

Even if this happens, I do not think Bitcoin will be affected in anyway, except maybe dropping exchange rate for a while. Recently US goverment made online gambling illegal. As the result, who suffered? US gamblers. Who lost their profits? US gambling companies.

[ssbtoday]

An emp...

[zdavidi]

Reading all these supportive posts in favor of bitcoin makes me smile. Hopefully we'll all be the next generation tycoons!!

[nitrogenetics]

Stopping peer to peer is a very difficult task. You'll either need to stop all the peers or their underlying network.
I suppose stopping the internet or making computers illegal would be extremely unpopular for any kind of government/authority!