MAX KEISER please please please CORRECT your mistake re: confiscation

[hashman]

Is anybody else really disturbed by these recent quotes from our favorite mad economics reporter? 

He says bitcoins "can't be confiscated".  WTF?? 

e.g.:
http://www.youtube.com/watch?feature=player_detailpage&v=_t39jCXXIrY#t=312s

As it stands this is a large hanging bad omen on the community and seemingly an open invitation to rob Max for everything he's got.  I sure hope that doesn't happen, so please Max --  give the public some clarification on this issue?  Perhaps you mean to say it is more difficult to confiscate bitcoins than some other assets if the holder of the bitcoins has made certain precautions?   

[Severian]

I think he means that governments can't confiscate bitcoins the way they confiscate other property: by decree.

[grondilu]

To confiscate =  To use one's authority to lay claim to and separate a possession from its holder.

[hashman]

I think he means that governments can't confiscate bitcoins the way they confiscate other property: by decree.

So do you think that is accurate? 

[conspirosphere.tk]

I think he means that governments can't confiscate bitcoins the way they confiscate other property: by decree.

So do you think that is accurate?  

Yes. And even Jon Matonis:
Bitcoin and the Rebirth of Financial Safe Havens
http://www.financialsense.com/contributors/jon-matonis/bitcoin-and-rebirth-of-financial-safe

edit: and this is one of the biggest reasons why I am a BTC believer

[Severian]

So do you think that is accurate? 

Yes. If he had said, "bitcoins can't be stolen" then it would be an error.

Max knows what's up.

[deadweasel]

I think he means that governments can't confiscate bitcoins the way they confiscate other property: by decree.

So do you think that is accurate?  

Yes. And even Jon Matonis:
Bitcoin and the Rebirth of Financial Safe Havens
http://www.financialsense.com/contributors/jon-matonis/bitcoin-and-rebirth-of-financial-safe

edit: and this is one of the biggest reasons why I am a BTC believer

same reason for me.  when we are old, there will be no social security net. 

[grondilu]

It would be seriously difficult for a government to confiscate bitcoins.

First, you don't know who owns bitcoins.

Second, assuming you know someone owns some bitcoins and you want to take them from him, you need to scare him into giving you his password.  It's quite different than, say, confiscate a house.  Unless the owner is heavily armed, you can just basically take the house and kick the guy out.

Now sure, you can put the guy in jail until he gives his password away.  Or you can torture him.  But then you just make it clear that you're fascist.

[acoindr]

Max Keiser is correct.

Governments would find it difficult to impossible to confiscate (or outlaw) bitcoins effectively. The reason is for every action governments might take bitcoins can be routed around. A government outlawing bitcoins would simply drive their use underground.

Regarding confiscation Max Keiser references Roosevelt confiscating gold in 1933:

http://en.wikipedia.org/wiki/Executive_Order_6102

...he issued Presidential Proclamation 2039 that forbade the hoarding 'of gold or silver coin or bullion or currency,' under penalty of $10,000 and/or up to five to ten years imprisonment.

...Executive Order 6102 required all persons to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve

There are several differences bitcoins would have from the above. First, gold or silver being tangible items could be argued to be natural resources. Governments often feel automatic authority/jurisdiction over such things. This along with the argument "hoarding of gold" was prolonging the depression probably seemed sufficient basis to push the action through.

For people not wanting to comply what were their options? The threat of men with guns showing up with metal detectors, and rewards for nosy neighbors was probably sufficient deterrent to try hiding large quantities of the physical stuff.

On the other hand bitcoins are obviously not natural resources nor tangible at all. One could literally hide/keep secret over 1 trillion dollars worth of value from the government in the form of a bitcoin brain wallet, which of course is immune to metal detectors, satellite imagery, nosy neighbors or whatever other means governments might successfully employ to locate physical things.

[hashman]

It would be seriously difficult for a government to confiscate bitcoins.

That depends on how clever the bitcoin holders have been, doesn't it. 

First, you don't know who owns bitcoins.

No?  I think you have a better idea of some places to start looking than Roosevelt knew where to look for the gold. 

Second, assuming you know someone owns some bitcoins and you want to take them from him, you need to scare him into giving you his password.  It's quite different than, say, confiscate a house.  Unless the owner is heavily armed, you can just basically take the house and kick the guy out.

Now sure, you can put the guy in jail until he gives his password away.  Or you can torture him.  But then you just make it clear that you're fascist.

Yeah, and taking the house and kicking the guy out isn't facist?  And when did "making it clear you're facist" ever stop facism?  Or maybe what Max means is " you can't confiscate bitcoin unless you don't mind people knowing you are facist" ? 

[hashman]

Max Keiser is correct.

Governments would find it difficult to impossible to confiscate (or outlaw) bitcoins effectively. The reason is for every action governments might take bitcoins can be routed around. A government outlawing bitcoins would simply drive their use underground.

Regarding confiscation Max Keiser references Roosevelt confiscating gold in 1933:

http://en.wikipedia.org/wiki/Executive_Order_6102

...he issued Presidential Proclamation 2039 that forbade the hoarding 'of gold or silver coin or bullion or currency,' under penalty of $10,000 and/or up to five to ten years imprisonment.

...Executive Order 6102 required all persons to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve

There are several differences bitcoins would have from the above. First, gold or silver being tangible items could be argued to be natural resources. Governments often feel automatic authority/jurisdiction over such things. This along with the argument "hoarding of gold" was prolonging the depression probably seemed sufficient basis to push the action through.

For people not wanting to comply what were their options? The threat of men with guns showing up with metal detectors, and rewards for nosy neighbors was probably sufficient deterrent to try hiding large quantities of the physical stuff.

On the other hand bitcoins are obviously not natural resources nor tangible at all. One could literally hide/keep secret over 1 trillion dollars worth of value from the government in the form of a bitcoin brain wallet, which of course is immune to metal detectors, satellite imagery, nosy neighbors or whatever other means governments might successfully employ to locate physical things.

You mention two differences between gold and bitcoin:  1) metal detectors  and  2) size (brainwallet / paper wallet)

These both will make it easier to hide your bitcoin stash than your gold stash if the browncoats come a knocking.

However nothing here prevents folks from trying to grab your coins.  Yeah, we could discuss the motivation of Roosevelt at that time (I don't fully understand) or the motivation of police today who confiscate thousands of coins worth of assets every day.  I sure hope it doesn't happen, but that discussion doesn't really matter:    Bitcoins will be, have been, and can be confiscated.   

[grondilu]

However nothing here prevents folks from trying to grab your coins.

Confiscation differs from theft in a sense that with confiscation, you don't have to try, you can just do it.   It's effortless.

[hashman]

I think he means that governments can't confiscate bitcoins the way they confiscate other property: by decree.

So do you think that is accurate?  

Yes. And even Jon Matonis:
Bitcoin and the Rebirth of Financial Safe Havens
http://www.financialsense.com/contributors/jon-matonis/bitcoin-and-rebirth-of-financial-safe

edit: and this is one of the biggest reasons why I am a BTC believer

Same author:

http://www.forbes.com/sites/jonmatonis/2012/09/12/key-disclosure-laws-can-be-used-to-confiscate-bitcoin-assets/

[hashman]

However nothing here prevents folks from trying to grab your coins.

Confiscation differs from theft in a sense that with confiscation, you don't have to try, you can just do it.   It's effortless.

I'm not sure that's accurate.  Nothing is effortless.  Collecting gold was probably not such a walk in the park.  What fraction do historians think they got?   Confiscation of bitcoins could start out even more easily, by first grabbing every wallet.dat from online computers. 

Another possible difference between the two very similar words:  confiscation is when the powerful take from the powerless.  Theft is when the powerless take from the powerful. 

[acoindr]

...  Yeah, we could discuss the motivation of Roosevelt at that time (I don't fully understand)...

Bold emphasis mine. What you don't understand is what's most important. By confiscating gold Roosevelt effectively forced the market to prefer to use dollars instead of gold.

Using gold as money is superior to dollars in terms of guaranteed value. Gold has been valued by people for thousands of years and can't be easily counterfeited. That's not true of dollars (dollars are easily counterfeited by the Federal Reserve). So a free market if left on its own would probably choose to use gold (whatever is superior). Roosevelt took that option away from the market. He couldn't do that with Bitcoin.

 

...    Bitcoins will be, have been, and can be confiscated.   

Make sure you understand the definition of confiscation as opposed to theft:

confiscate - Take or seize (someone's property) with authority.

I'm not aware of any government seizing someone's bitcoins on authority, and even if so, certainly not on a large enough scale to influence a market.

[chronocoin]

It's like saying gold cannot be confiscated like bank balances.... yes and no.

[conspirosphere.tk]

I think he means that governments can't confiscate bitcoins the way they confiscate other property: by decree.

So do you think that is accurate?  

Yes. And even Jon Matonis:
Bitcoin and the Rebirth of Financial Safe Havens
http://www.financialsense.com/contributors/jon-matonis/bitcoin-and-rebirth-of-financial-safe

edit: and this is one of the biggest reasons why I am a BTC believer

Same author:

http://www.forbes.com/sites/jonmatonis/2012/09/12/key-disclosure-laws-can-be-used-to-confiscate-bitcoin-assets/

Even if the US law could force one to "confess" his passwords (so the Miranda rights exist just in cops' telefilms?), since you can have as many wallets as you want, encrypt them in the way you want and store them wherever you want at zero cost, your BTC assets remain infinitely safer against any banana government endowed with metal detectors than gold/silver/anything else.

[TheDarKnight]

It is not innaccurate, there is no way to legally confiscate BTCs - you can also make it incredibly hard for them to find a way to take them by putting them in cloud storage for example...

[Mike Christ]

They can't be confiscated.  Unless they figure out the code to my brain wallet...

Mind-reading devices aren't a thing yet, are they?

[kgo]

I'm not sure that's accurate.  Nothing is effortless.  Collecting gold was probably not such a walk in the park.

Actually it was.  They didn't go door to door and search houses for gold.

They said, "Go turn in all your gold for paper money by this day, or you're breaking the law."  And people did it.  There's no reason people couldn't have buried their gold in the back yard and traded it on the black market if they wanted to.  But just about everyone decided holding gold wasn't worth the risk.

Technically Max is wrong.  The government could declare that private ownership of bitcoins are illegal.  They could even offer to buy them from you and give you amnesty up to a given date so you're not deprived of property.

But effectively it's much more difficult to bitcoins than gold.  There was an article floating around a few weeks ago about someone who got busted smuggling a million dollars in gold across a border.  It would be trivial smuggle a million dollars in bitcoins out of the country.  You could just encrypt your wallet, email it to yourself, and then there's nothing for customs to seize as you flee the country to start life over in Sealand.

The spirit of what he said is accurate even if it's not 100% academically rigorous.