Do we want to work with money regulators, or keep Bitcoin unregulated?

[Peter Todd]

There was an interesting post on the Bitcoin Foundation's private forum today:

Hi! I would like the board to discuss opening up lines of communication with money regulators - particularly FinCEN and AUSTRAC (I'm from Australia). FinCEN and other government money regulators need to write new rules as they obviously don't understand Bitcoin's inherent structure.

I think it would be better if some organisation like the Bitcoin Foundation could offer guidance draft rules and work with the regulators.

Otherwise we'll have a situation pretty soon where they try to implement something unworkable, the criminals flood into the Bitcoin system then the argument for 'shutting down bitcoin' grows in popularity.

-Bitcoin Foundation board meeting agenda requests (only viewable by foundation members)


You know, Bitcoin is at an interesting stage of it's development. We've got a lot of money flowing in to the ecosystem and for the first time we're seeing interest from big businesses - even PayPal and Western Union are looking into accepting Bitcoin.

We're also under a lot of attack; big heavily protected exchanges and other websites like Mt. Gox, blockchain.info, and The Silk Road are getting DDoSed; services like Instawallet and mining pools are having funds stolen; exchanges getting shutdown by regulators; (including Mt. Gox suddenly shutting down their off-chain payment service) even child porn related data being uploaded to the blockchain:

It is widely speculated, based on common forum comments in the crypto-anarchist community, that this current round of data spam is intended to force bitcoin users, developers and governments of the world to take action to censor -- or not -- certain bitcoin transactions.  Trying to force the issue, to establish a precedent one way or the other.  Or, more pessimistically, a party could be simply trying to shut down bitcoin.

-Jeff Garzik

The Bitcoin Foundation itself is in a difficult position: we all know who it's funded by, and everyone involved is publicly known. This can be a problem: in the last round of grant proposals at one point Gavin suggested someone submit a grant for a trust-free mixer service to help people make the coins in their wallet more anonymous by mixing them with a large pool of other users. I asked Gavin about that later, and he said the foundation lawyers nixed the idea because efforts to make Bitcoin users more anonymous could be seen to be aiding money laundering, especially if the foundation itself was paying for development and to run the servers.


We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin. We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data. We can work with them to find ways to apply AML rules to Bitcoin transactions and to the exchanges. There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made. Maybe even one day we'll be required to prevent dangerous levels of deflation. A lot of these changes are technical, such as improving scalability so transactions can remain on the blockchain, developing P2P blacklist technologies, and preventing deflation.

We can also go the other route, and give Bitcoin users even more tools to remain anonymous and transact on their own terms. Technologies like mixing and off-chain transactions to let you make transactions without revealing where the coins came from, technologies like P2Pool to ensure mining stays decentralized, and colored coins to let us trade our assets without involving third party exchanges.

I think this discussion needs to happen out in the open, and we need to have it now. I'm sure you have a pretty good idea what I think, but what does the rest of the community think?

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[hello_good_sir]

I am very much anti-regulation, but we live in the real world.  Regulation is coming.  Who is going to write it?  Well it won't be politicians, because politicians don't write regulations.  They don't even write legislation.

Special interest groups write legislation which is then approved by legislators.  This legislation creates new goverment offices or expands the scope of existing offices.

These offices are the people who decide what regulation will exist.  Usually they write the regulations, but quite often they allow special interest groups to help write the regulations.

So what does this mean for bitcoin?  It means that the regulations will be written primarily by special interest groups.  The question is whether the banks will be the ones writing the regulations, or whether the Bitcoin Foundation will be writing the regulations.

Thus I would support an effort by the Bitcoin Foundation to aggressively pursue regulation.  This is despite the fact that I am very much opposed to regulation.

Of course the entire point of helping to write the regulation is to reduce the severity of the regulation.  Anything where we help them collect taxes or blacklist addresses is simply unacceptable.

[Brushan]

WTF do you need Bitcoin for if you can tax it, regulate it, track and seize coins, and on top of all of that fight deflation!?  People, was Bitcoin really made for this? Feels to me like we're executing a u-turn.

[Peter Todd]

Of course the entire point of helping to write the regulation is to reduce the severity of the regulation.  Anything where we help them collect taxes or blacklist addresses is simply unacceptable.

Indeed.

Myself, I want to see the foundation improve the ability of the Bitcoin technology to resist attempts to regulate it, while at the same time working to keep the legal framework regulating Bitcoin as minimal as possible.

Look at the Tor project: they do a great job keeping Tor anonymous by ensuring that governments and law enforcement around the world see that it's valuable, and at the same time improving the technology to ensure that even if they tried there is little they could do to stop it anyway.

After all, the foundation isn't Bitcoin. I'm a member myself, and I want to know what their views are so I can decide if I should be sending my membership fees to them, or somewhere else.

[cbeast]

What is the benefit to regulation? Do gold and silver buyers have regulation? In my opinion, Bitcoin green addresses, whitelisting, colored coins, government provided deterministic wallets, and other schemes can offer full traceability. All there need to be is an incentive to use them.

[theymos]

What's even the point of Bitcoin if it's just another government-managed currency? I guess it'd be a little better than dollars, and Bitcoin investors would make a ton of money if any version of Bitcoin became very popular, but it wouldn't be world-changing. I'd be very reluctant to accept any pro-government compromises; too many of them would destroy Bitcoin's real value.

[bassclef]

The bitcoin community will self-regulate.

DOS attacks? The community learned quickly to hold tight when they happen, and they've already stopped.

Wallet theft? Don't store your damn wallet on a remote server. Learn to secure it properly.

Money laundering/criminal activity? Please, you get that with every currency. You cannot stop black markets from existing.

It is not the regulators' jobs to protect us from any of this. It is our job.

Also remember: If you give them an inch, they will take a mile.

[tvbcof]

I think that most of the people 'in the government' are just trying to do their jobs.  Also that a lot of their jobs are important.  At this point I see a lot of reasonable rational behind many of the laws and regulations and it seems to me reasonable to make a good faith effort to lend assistance and advice.

I also think that a lot of the heads of various parts of at least my government (US) are already fairly rotten from the effects of money in politics and that that situation is going to get a lot worse before it gets better.

I strongly favor a situation where 'bitcoin' operates from a position of power.  That is to say, we 'do the right thing' when it makes sense but retain the option of withdrawing from cooperative arrangements if/when they become it makes sense to do so.

More than anything I am an 'anti-fascist' and look with great alarm at the merger of state and corporate power.  More and more the words 'state' and 'corporate' are words that can be used interchangeably.  With that said:

Two things interfere with the option to operate from a position of power:

 - Attachment to the same forces which corrupt our governments (specifically corporate and financial interests.)

 - Reliance on irreplaceable resources which are provided at the pleasure of corp/gov.  This is the main reason why I am SO negative about 'centralization' and so dead-set on wishing Bitcoin to remain as fully 'peer2peer' as possible.

[charleshoskinson]

Well the foundation is fundamentally pro-regulation. What that means is entirely unclear to me and even as a member I cannot get answers other than attacks by the leadership. I would really appreciate Peter spending the time to leave a thread with his vision for regulation. Instead of just personal attacks or claims we don't "contribute" enough to deserve a voice in bitcoin.

[Dharmadog]

WTF...  Stupid discussion.  Period.

[proudhon]

Regulation of bitcoin in some sense is inevitable and probably desirable, but it's important to recognize that the only sense in which bitcoin can be realistically regulated has to do with the ways that bitcoin interfaces with the traditional financial system.  So, exchanges, like MtGox, can be compelled to behave in certain ways by the financial regulations of their jurisdictions.  They can be held to standards of accounting and reporting, say, and face fines or interference for not complying.

A unique aspect of bitcoin is that transacting only in the bitcoin ecosystem, away from points of contact with the traditional financial system, is to transact in a system that is pretty strongly resistant to typical top-down regulation from entities like states.  Users can more easily choose whether they operate in the regulated space or the unregulated space.

In a discussion on regulation, I think it's important to make this distinction.  If somebody, like some members of the Foundation, are pro-regulation, it doesn't necessarily mean they believe that bitcoin itself should or will be regulated - it probably just can't be regulated in a practical way.  What they are likely talking about are regulations to do with certain ways that bitcoin comes in contact with traditional financial systems where states already enforce regulations.

[marcus_of_augustus]

Someone wants to regulate bitcoin? ... as jgarzik, luke-jr and gmaxwell have aptly stated and demonstrated ...

SUBMIT a PULL REQUEST on GITHUB with your changes and we'll get back to ya 

[QuantPlus]

Gavin comes across as a NSA Trojan Horse.

Now that BTC has hit $1.3 billion in market cap...
Now is the time to purge the Foundation...
Pack it with radicals and take the hard, radical road of Satoshi's Vision.

Bitcoin just got important enough to be noticed...
Govt agencies wanna strangle BTC in it's crib...
Paypal, WU wanna co-opt BTC, neuter it, and take over the Cryptocurrency Space.

When people like David Marcus and Eric Schmidt talk about Bitcoin...
You should shudder and turn away...
They represent everything that Bitcoiners find abhorrent.

The one place I would give a little is on AML and tax evasion...
BTC must stay independent while moving away from being a criminal vehicle.

[mobile4ever]

In the last round of grant proposals at one point Gavin suggested someone submit a grant for a trust-free mixer service to help people make the coins in their wallet more anonymous by mixing them with a large pool of other users. I asked Gavin about that later, and he said the foundation lawyers nixed the idea because efforts to make Bitcoin users more anonymous could be seen to be aiding money laundering, especially if the foundation itself was paying for development and to run the servers.

We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin. We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data. We can work with them to find ways to apply AML rules to Bitcoin transactions and to the exchanges. There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made. Maybe even one day we'll be required to prevent dangerous levels of deflation. A lot of these changes are technical, such as improving scalability so transactions can remain on the blockchain, developing P2P blacklist technologies, and preventing deflation.

Sounds freakin' dandy. Count me out if it goes this direction.

Maybe litecoin is looking better and better? Seriously, bitcoin is decentralised and distributed. Putting it into the hands of a few people is opposite to the original intent.

[shawshankinmate37927]

We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin. We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data. We can work with them to find ways to apply AML rules to Bitcoin transactions and to the exchanges. There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made. Maybe even one day we'll be required to prevent dangerous levels of deflation. A lot of these changes are technical, such as improving scalability so transactions can remain on the blockchain, developing P2P blacklist technologies, and preventing deflation.

If Bitcoin heads in this direction, surely there will be a hard fork.  The whole point of Bitcoin for a lot of users is to have a currency that functions independently of the world's most heinous criminals--the bankers and politicians--and makes their destructive, self-serving policies/regulations/legislation irrelevant.  Each of us should be free to transact in whatever currency has the features and characteristics that we want and individually choose.  Similar to religion (in the USA at least), a currency should not be imposed on us.  It's obvious there isn't going to be a one-size-fits-all cryptocurrency as we move forward.

We can also go the other route, and give Bitcoin users even more tools to remain anonymous and transact on their own terms. Technologies like mixing and off-chain transactions to let you make transactions without revealing where the coins came from, technologies like P2Pool to ensure mining stays decentralized, and colored coins to let us trade our assets without involving third party exchanges.

We can go both routes.  It's as simple as a hard fork.

[proudhon]

We can go both routes.  It's as simple as a hard fork.

Or no fork.  There is no cryptocurrency variant that is immune to regulation where it transacts with the traditional financial system.  Forking bitcoin or creating new alt-coins simply will not solve the problem, to the extent that is a problem, of regulation at points of contact with the traditional system.  Users can already go both routes.  If you choose to only transact in bitcoin, then you can effectively choose to transact within an unregulated system.  If you want to move into and out of bitcoin and the methods you choose to do so interact directly enough with the traditional financial system, then you'll likely brush up about regulations.

[shawshankinmate37927]

We can go both routes.  It's as simple as a hard fork.

Or no fork.  There is no cryptocurrency variant that is immune to regulation where it transacts with the traditional financial system.  Forking bitcoin or creating new alt-coins simply will not solve the problem, to the extent that is a problem, of regulation at points of contact with the traditional system.  We can already go both routes.  If you choose to only transact in bitcoin, then you can effectively choose to transact within an unregulated system.  If you want to move into and out of bitcoin and the methods you choose to do so interact directly enough with the traditional financial system, then you'll likely brush up about regulations.

Not if you transact in cash--actual Federal Reserve Notes.

[franky1]

quick lesson for the OP

money regulators regulate money.

money is a type of currency owned by governments.

virtual currency is not money. its another type of currency

money is the laymans term for FIAT

money regulators only care about money (FIAT) so don't worry about them trying to control bitcoin. they only want to control money (FIAT).

if the government cared about other types of currency then they would have ensured that they stopped the sexual favours and cigarettes trading that happens in prisons. which is alot easier to manage and control in comparison to bitcoin

so if you don't want money regulators involved with bitcoin then you don't want to ever turn your bitcoin into fiat

[proudhon]

We can go both routes.  It's as simple as a hard fork.

Or no fork.  There is no cryptocurrency variant that is immune to regulation where it transacts with the traditional financial system.  Forking bitcoin or creating new alt-coins simply will not solve the problem, to the extent that is a problem, of regulation at points of contact with the traditional system.  We can already go both routes.  If you choose to only transact in bitcoin, then you can effectively choose to transact within an unregulated system.  If you want to move into and out of bitcoin and the methods you choose to do so interact directly enough with the traditional financial system, then you'll likely brush up about regulations.

Not if you transact in cash--actual Federal Reserve Notes.

That goes without saying.  Every cryptocurrency is immune to regulation with respect to physical cash transactions.  But, hopefully it's obvious enough that I don't mean to include ordinary physical cash transactions when I speak of interacting with the traditional financial system.  I'm referring to things like online exchanges.  And in the case of online exchanges I'm referring to those that use banks to store and move customers state money funds.  

[edmundedgar]

The OP's post is very slippery. It's written as if it's describing the situation from a neutral stance, but it's full of political games.

Let's start with the topic:

"Do we want to work with money regulators, or keep Bitcoin unregulated?"

This obviously not the choice. The regulators are going to regulate Bitcoin use whatever the foundation, or anyone else does. The question is whether we think the foundation should lobby money regulators to reduce unhelpful regulation.

Then we get this:

We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin. We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data.

Who is advocating any of that? In any case, the foundation can't do that, because if they did people would just use different versions of the software, or if necessary fork the whole thing.

A lot of these changes are technical, such as improving scalability so transactions can remain on the blockchain, developing P2P blacklist technologies, and preventing deflation.

OK, you might have missed it for the straw men, but there's an actual thing in there. Retep is opposed to improving scalability so transactions can remain on the blockchain. He has some opinions about what the blockchain should be used for, and he wants to cap the network at 7 transactions per second, and blow fees through the roof so that most of the current uses of Bitcoin will have to go somewhere else.

This is a tough argument for him to win and making transactions cost $1 or $10 or $100 would not be very popular, so when the core developers try to scale the network up he's trying to make you think that it's part of some kind of pro-government plot involving the Bitcoin foundation.

[jdillon]

The OP's post is very slippery. It's written as if it's describing the situation from a neutral stance, but it's full of political games.

OK, you might have missed it for the straw men, but there's an actual thing in there. Retep is opposed to improving scalability so transactions can remain on the blockchain. He has some opinions about what the blockchain should be used for, and he wants to cap the network at 7 transactions per second, and blow fees through the roof so that most of the current uses of Bitcoin will have to go somewhere else.

What's slippery is you anti-privacy lot never once mentioning how the massive blockchain you keep on pushing will result in bloat that even Gavin thinks will soon make operating a node cost $100/month. You'll have no choice but to move to a big data center with a fast connection right out in the open, and users will have no alternatives other than continuing to have every transaction they make recorded publicly for regulators to analyze.

Good luck keeping the regulators away under those conditions. Moving your blacklisted coins will be a matter of hoping that the few, if any, pools still running that don't follow AML know your customer regulations aren't busy trying to find another country to set up shop in.

This is a tough argument for him to win and making transactions cost $1 or $10 or $100 would not be very popular, so when the core developers try to scale the network up he's trying to make you think that it's part of some kind of pro-government plot involving the Bitcoin foundation.

Funny how the core developers seem to mostly agree with him, with the exception of Gavin. Guess who's getting their salary paid by big businesses?

Peter is damn right to say that we need technology that keeps Bitcoin regulators away from the core of Bitcoin. FWIW I think you should just submit a pull request to the foundation bylaws, and add a section on anonymity and decentralization. See how they respond, if at all.

[cypherdoc]

the regulators main function is to preserve the status of the USD monetary system since most of them are captured by the banking system today.  since Bitcoin collides with that system in just about every possible way, you can expect them to try and change Bitcoin in the ways the OP outlined.  that will not be acceptable to just about every Bitcoin supporter in existence today.

its becoming apparent that they will try and attack the developers of the Bitcoin system to force them to insert unfavorable changes in due time.  if the developers capitulate to these demands they can be assured that either Bitcoin will be forked or other developers will take their place.

[QuestionAuthority]

Your subject is kind of a backwards way of thinking; it assumes you have control over making regulations. Personally I’d like to keep firearms from being regulated but that hasn’t worked out well for me so far.

[glendall]

What purpose would any sort of regulation have besides transferring a percentage of Bitcoin's value to the self-appointed people who came up with the idea?

I trust the software behind it, not anyone trying to control it.

Couldn't care less if Paypal and other giants get an unfair cut of this resource. There are many currencies, perhaps we should try a free currency for a change, as an experiment for comparison.

[paybitcoin]

I think Bitcoin can handle both regulated scenarios and unregulated scenarios, just like paper money is handled legally and illegally today.

Full traceability will be the norm for everyday consumers and businesses using green addresses or some other trust mechanism, but with the possibility of being used anonymously with enough caution. The FBI, IRS, or equivalent would step at the same time and in the same way as if they are catching millions of paper US dollars going across the border.

The question is, at what quantity of 'anonymous' Bitcoins does the regulation begin? I think for USD bills it starts raising eyebrows with $6,000-10,000 moving around...

[westkybitcoins]

Coercion of innocent parties is wrong. No amount of grandstanding or excuses about "we're protecting everyone" changes that.

[QuantumQrack]

Bitcoin will remain unregulated.  It doesnt matter if people in the community want it regulated or if government(s) want it regulated.  Bitcoin, by nature, is unregulated.  They cannot seize your btc unless under duress, etc.  You are your own bank.

[Brushan]

Bitcoin will remain unregulated.  It doesnt matter if people in the community want it regulated or if government(s) want it regulated.  Bitcoin, by nature, is unregulated.  They cannot seize your btc unless under duress, etc.  You are your own bank.

Until the devs fork it and say: "Here is the regulated Bitcoin 2.0 which will be worth 10000USD because of big company involvement, if you don't want use it then use the unregulated Bitcoin 1.0 for illegal activities which will be worth about 2USD."

Looking at the majority of people involved in Bitcoin i'd place my money on that everybody would go for 2.0. Of course, the Bitcoin Foundation together with other large companies (paypal, banks etc), will make a plan to slowly manipulate us into believing that a regulated Bitcoin will be much better for everyone. If you ask me, it has already begun.

[QuantumQrack]

Bitcoin will remain unregulated.  It doesnt matter if people in the community want it regulated or if government(s) want it regulated.  Bitcoin, by nature, is unregulated.  They cannot seize your btc unless under duress, etc.  You are your own bank.

Until the devs fork it and say: "Here is the regulated Bitcoin 2.0 which will be worth 10000USD because of big company involvement, if you don't want use it then use the unregulated Bitcoin 1.0 for illegal activities which will be worth about 2USD."

Looking at the majority of people involved in Bitcoin i'd place my money on that everybody would go for 2.0. Of course, the Bitcoin Foundation together with other large companies (paypal, banks etc), will make a plan to slowly manipulate us into believing that a regulated Bitcoin will be much better for everyone. If you ask me, it has already begun.

If there is ANY kind of change to bitcoin that serves more regulation, I am OUT of bitcoin.

[Brushan]

Bitcoin will remain unregulated.  It doesnt matter if people in the community want it regulated or if government(s) want it regulated.  Bitcoin, by nature, is unregulated.  They cannot seize your btc unless under duress, etc.  You are your own bank.

Until the devs fork it and say: "Here is the regulated Bitcoin 2.0 which will be worth 10000USD because of big company involvement, if you don't want use it then use the unregulated Bitcoin 1.0 for illegal activities which will be worth about 2USD."

Looking at the majority of people involved in Bitcoin i'd place my money on that everybody would go for 2.0. Of course, the Bitcoin Foundation together with other large companies (paypal, banks etc), will make a plan to slowly manipulate us into believing that a regulated Bitcoin will be much better for everyone. If you ask me, it has already begun.

If there is ANY kind of change to bitcoin that serves more regulation, I am OUT of bitcoin.

I fully agree and unfortunately i think that is the way we are heading. Just look at how the sentiment of the big Bitcoin names has been changing lately. From talks about an unregulated deflationary currency to removing all of that to invite big business. All the signs are there for all of us to see. Greed is killing Bitcoin and i don't mean the speculators. People are selling out and soon there won't be anything different between having a Mastercard and a Bitcoin address.

[nwbitcoin]

This is a great question, and one that highlights the first major problem to be faced by bitcoin users.

They understand tech, but are very naive about politics.  We need regulation because that is how you keep others from creating regulations and it makes far more sense to create the regulations in house, than to give it to someone who has an unknown agenda.

Realistically, the governments of the world are not going to chase down every alt coin out there, but bitcoin is the big one, with the name everyone recognises.  If they regulate bitcoin, then they will be happy that they are still in control, and are able to manage the risk to the real prize, tax income.

I would suggest that the rules put in place, manage some of the major complaints against bitcoin, along the lines of money laundering, tax evasion etc.

Maybe a best practice guideline suggesting that all bitcoin transactions greater than x are made through a third party to prevent anonymous transactions.

What the ideological bitcoin believer needs to understand is that governments are not interested in their sub $1000 deals.  They want to make sure that they know about the $100k deals from South America and the extra cashflow coming from large corporates.

If the regulations are put in place now, but done in a best practice, no need for laws type of way, then everyone will be happy!

[ErisDiscordia]

This is ridiculous. We get the ultimate gift for freeing individuals from the yoke of the power of the government/corporation complex and what do we do with it? Cry for our overlords to kindly regulate it for us?? No way in hell am I going to support this. Stay unregulated. It's time that TPTB learned that they do NOT in fact own the world are NOT free to do with it as they please. Begging them for permission to defy them kind of defeats the point, doesn't it?

Also if I read the phrase "we need regulation, because x.." one more time, I think I'm going to throw up. YOU may think YOU need regulation but WE do not need anything. Get it right.

[nwbitcoin]

This is ridiculous. We get the ultimate gift for freeing individuals from the yoke of the power of the government/corporation complex and what do we do with it? Cry for our overlords to kindly regulate it for us?? No way in hell am I going to support this. Stay unregulated. It's time that TPTB learned that they do NOT in fact own the world are NOT free to do with it as they please. Begging them for permission to defy them kind of defeats the point, doesn't it?

Also if I read the phrase "we need regulation, because x.." one more time, I think I'm going to throw up. YOU may think YOU need regulation but WE do not need anything. Get it right.

Let me ask you a question.

What stops someone from putting a bullet in your head and stealing all your stuff?

The answer is regulations.

There will always be someone who breaks those regulations, and that is why we have the police, but in essence, the majority of people need some form of guidance to what you can and can't do.

Without it, there is nothing stopping me from stealing or cheating you out of your bitcoins and leaving you destitute.

Now can you see why a handful of rules and regulations might be useful?

However, I would only suggest a small number of rules, maybe 10 or so!
 

[Brushan]

We need regulation because that is how you keep others from creating regulations and it makes far more sense to create the regulations in house, than to give it to someone who has an unknown agenda.

I have seen many users post this argument and i don't understand it. HOW can you regulate a currency that was designed impossible to regulate? To me it looks like the people in charge are trying to make either a fork or a central bank-type layer so that it can be regulated. Because let's face it, Bitcoin right now CAN'T be regulated if we don't let them regulate it. They want to close all the exchanges? Fine! We have TOR, we can meet in the streets and people will find other ways to bypass that. That's why 'm not afraid of the government forbidding Bitcoin. But it looks to me like they want to change the whole nature of Bitcoin and that is what's dangerous. And even more because many Bitcoin users have no problem with that.

[virtualmaster]

Buy bitcoins when they are cheap and sell them when they are expensive.
Governments may do that also.
Any other regulation is undesirable.

[AlgoSwan]

so if you don't want money regulators involved with bitcoin then you don't want to ever turn your bitcoin into fiat

This is so important. Removing fiat from BTC exchanges also prevent future manipulations.

[helohe]

better be safe than sorry, and fork bitcoin already, whoever wants to stay with the original bitcoin then which will eventually be changed to include regulation can do that

[nwbitcoin]

We need regulation because that is how you keep others from creating regulations and it makes far more sense to create the regulations in house, than to give it to someone who has an unknown agenda.

I have seen many users post this argument and i don't understand it. HOW can you regulate a currency that was designed impossible to regulate? To me it looks like the people in charge are trying to make either a fork or a central bank-type layer so that it can be regulated. Because let's face it, Bitcoin right now CAN'T be regulated if we don't let them regulate it. They want to close all the exchanges? Fine! We have TOR, we can meet in the streets and people will find other ways to bypass that. That's why 'm not afraid of the government forbidding Bitcoin. But it looks to me like they want to change the whole nature of Bitcoin and that is what's dangerous. And even more because many Bitcoin users have no problem with that.

You need to think outside your comfort zone.

Anything that involves people can be regulated.

Just because you don't want regulations, doesn't stop others from creating some, and enforcing it!

This is why its better to be first to the table with some suggestions!

What most ideological people don't get is that their ideas for not regulating bitcoin don't actually work - if you go and just use TOR and shun Fiat, you are removing the advantages of bitcoin, and the threat to governments - you are basically doing their regulations for them!

Think of it this way.
You have a wonderful Apple pie on your kitchen window, which is warm, and smells delicious.
If you give the bully a small slice, he will leave you alone, happy that he got some pie.
If you don't, he might take the whole pie, and give you a small slice.
If you run away with the pie, he might come after you and not only steal your pie, but also smash it into your face.
If you run away, you might out run the bully, but also end up away from the house, not able to watch TV while eating your pie with no plate, cutlery, or lemonade!

The point is, when you have something that someone else might want, the first move is to be reasonable, because it stops them being unreasonable!

[ErisDiscordia]

Let me ask you a question.

What stops someone from putting a bullet in your head and stealing all your stuff?

The answer is regulations.

I have been posed this question numerous times and have thus had much incentive to think about it a lot. And my answer(s) differ from your answer. Please consider:

I came to the conclusion that what stops people from stealing from me/putting a bullet in my head can be summarized in 3 points:

1. people have little reason to randomly kill me. I admit that they can have reasons to steal from me, though.
2. What stops them from stealing my stuff even when they have reasons to do so is FEAR of retribution. This is the crucial point imo. Right now this fear of retribution manifests itself as fear of getting arrested, sentenced, fined and put into jail by the authorities. This is where we fail massively as a society I think, but I won't go into detail on why I think it's not a good idea to relegate responsibilities for the most crucial parts of your life (such as protection of your property, your education, health care, retirement etc.) to a monopolistic central authority. I'm certain you can find some arguments for why that might be the case. Fear of retribution can also take the form of the belief that if found stealing my stuff, he'll get shot in the face (by me) or found out and otherwise punished by my friends or some people/organization I paid for protecting my stuff. Ultimately we don't need regulation for this, but this is what we use as of now.
3. Finally please have some trust in people. Let me ask YOU a question: is regulation the only thing stopping you from stealing other peoples stuff and shooting them in the face? Or is it just there to protect YOU against those OTHER people, who might want to do that. Who told you people are like that? Oh yes, might have been the same people, who are regulating you to keep you safe But my question still stands.

In the end I'm just allergic to central power, I heard it's a chronic condition, feel free to ignore me

[proudhon]

Bitcoin will remain unregulated.  It doesnt matter if people in the community want it regulated or if government(s) want it regulated.  Bitcoin, by nature, is unregulated.  They cannot seize your btc unless under duress, etc.  You are your own bank.

Until the devs fork it and say: "Here is the regulated Bitcoin 2.0 which will be worth 10000USD because of big company involvement, if you don't want use it then use the unregulated Bitcoin 1.0 for illegal activities which will be worth about 2USD."

Looking at the majority of people involved in Bitcoin i'd place my money on that everybody would go for 2.0. Of course, the Bitcoin Foundation together with other large companies (paypal, banks etc), will make a plan to slowly manipulate us into believing that a regulated Bitcoin will be much better for everyone. If you ask me, it has already begun.

I'm still confused by this whole discussion, and I think people aren't thinking this through and are failing to appreciate the nuance of what it would even mean to regulate bitcoin, or any other payment system built on the distributed, blockchain model.

Can we all pause for a moment and try to explain what it would even mean to "regulate bitcoin"?  By its nature, a distributed, majority rules rule, blockchain system is resistant to top-down, state imposed regulation of itself.  In that sense, neither bitcoin, nor litecoin, nor any other system based on this model can simply be regulated upon in the sense that some authority declares it should behave a certain way and then it is so.  Again, the system is resistant to that by design.  I get the sense that people are worried that the system will be regulated in this sense.  It practically cannot be.

On the other hand, points of contact with the traditional financial system (e.g. banks) can be regulated upon in a top-down authoritarian way.  Regulation at these points of contact is practically impossible to prevent.  In some cases regulation in this sense may even be desirable.

Can we please get clear about which sense of regulation we're talking about here.

[helohe]

Bitcoin will remain unregulated.  It doesnt matter if people in the community want it regulated or if government(s) want it regulated.  Bitcoin, by nature, is unregulated.  They cannot seize your btc unless under duress, etc.  You are your own bank.

Until the devs fork it and say: "Here is the regulated Bitcoin 2.0 which will be worth 10000USD because of big company involvement, if you don't want use it then use the unregulated Bitcoin 1.0 for illegal activities which will be worth about 2USD."

Looking at the majority of people involved in Bitcoin i'd place my money on that everybody would go for 2.0. Of course, the Bitcoin Foundation together with other large companies (paypal, banks etc), will make a plan to slowly manipulate us into believing that a regulated Bitcoin will be much better for everyone. If you ask me, it has already begun.

I'm still confused by this whole discussion, and I think people aren't thinking this through and are failing to appreciate the nuance of what it would even mean to regulate bitcoin, or any other payment system built on the distributed, blockchain model.

Can we all pause for a moment and try to explain what it would even mean to "regulate bitcoin"?  By its nature, a distributed, majority rules rule, blockchain system is resistant to top-down, state imposed regulation of itself.  In that sense, neither bitcoin, nor litecoin, nor any other system based on this model can simply be regulated upon in the sense that some authority declares it should behave a certain way and then it is so.  Again, the system is resistant to that by design.  I get the sense that people are worried that the system will be regulated in this sense.  It practically cannot be.

On the other hand, points of contact with the traditional financial system (e.g. banks) can be regulated upon in a top-down authoritarian way.  Regulation at these points of contact is practically impossible to prevent.  In some cases regulation in this sense may even be desirable.

Can we please get clear about which sense of regulation we're talking about here.

I have no problem with regulating exchanges whatsoever, I think it is actually a good thing. But I do have a strong problem with the following:

In the last round of grant proposals at one point Gavin suggested someone submit a grant for a trust-free mixer service to help people make the coins in their wallet more anonymous by mixing them with a large pool of other users. I asked Gavin about that later, and he said the foundation lawyers nixed the idea because efforts to make Bitcoin users more anonymous could be seen to be aiding money laundering, especially if the foundation itself was paying for development and to run the servers.

We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin. We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data. We can work with them to find ways to apply AML rules to Bitcoin transactions and to the exchanges. There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made. Maybe even one day we'll be required to prevent dangerous levels of deflation. A lot of these changes are technical, such as improving scalability so transactions can remain on the blockchain, developing P2P blacklist technologies, and preventing deflation.

Sounds freakin' dandy. Count me out if it goes this direction.

[yona]

Regulation of bitcoin in some sense is inevitable and probably desirable, but it's important to recognize that the only sense in which bitcoin can be realistically regulated has to do with the ways that bitcoin interfaces with the traditional financial system.  So, exchanges, like MtGox, can be compelled to behave in certain ways by the financial regulations of their jurisdictions.  They can be held to standards of accounting and reporting, say, and face fines or interference for not complying.

A unique aspect of bitcoin is that transacting only in the bitcoin ecosystem, away from points of contact with the traditional financial system, is to transact in a system that is pretty strongly resistant to typical top-down regulation from entities like states.  Users can more easily choose whether they operate in the regulated space or the unregulated space.

In a discussion on regulation, I think it's important to make this distinction.  If somebody, like some members of the Foundation, are pro-regulation, it doesn't necessarily mean they believe that bitcoin itself should or will be regulated - it probably just can't be regulated in a practical way.  What they are likely talking about are regulations to do with certain ways that bitcoin comes in contact with traditional financial systems where states already enforce regulations.

yes there are two questions at hand.
be part of creating new government regulations to the traditional financial system or help regulate the bitcoin development.

but either way once the foundation sits to the table it's a negotiation, and both options will be discussed.

[cypherdoc]

Let me ask you a question.

What stops someone from putting a bullet in your head and stealing all your stuff?

The answer is regulations.

This is not right. The answer is The Law.

One depends on an immutable understanding between human beings.

The other is political.

[c0rw1n]

NO regulation.

Not that I care. I'll still do whatever the hell I want, I'll create tumbling services, I'll run mirrors of SilkRoad, I'll fund a p2p exchange -since I can't code myself- that will happily ignore and make all existing KYC/AML laws unenforceable on it, I'll use so-called military-grade crypto in onioned layers, I'll use all the tools that exist to bring down a system that stole two thirds of all that humanity has made and gave it to 1% of humans.

The faster solution is to kill off the 1% and distribute their wealth to everyone else (90% of all wealth divided by seven billion would ERADICATE poverty overnight.)
The HUMANE solution is to simply disconnect their power from under their feet. Back btc with "all of the money" and all govts and banks are DEAD. Implement distributed markets, dominant assurance contracts and pay-to-policy outputs, and BOOM : DIRECT DEMOCRACY.

All we have to discuss is the terms of their surrender. They can't control us because they can't raid us all. They'll try to stop us by fining a handful of poorly-anonymized ones to create the urban legend that someone, somewhere got ruined for doing it. That will work exactly as well as it did to stop filesharing - that is, near-zero effect.

I refuse that we castrate a tool that can bring more equality and liberty to the world to appease the iniquitous slavers who manage it currently.

NO regulation.

[c0rw1n]

Let me ask you a question.

What stops someone from putting a bullet in your head and stealing all your stuff?

The answer is regulations.

This is not right. The answer is The Law.

One depends on an immutable understanding between human beings.

The other is political.

You're both wrong.

What prevents someone from putting a bullet in your head and stealing all your stuff is that you and bulletguy have neighbors, and cameras on every street corner, and two cameras and three localizers in every smartphone, and a blockchain to trace which wallet bought the gun and the bullet, and families, and a whole fucking society of 7 billion humans who don't like to receive bullets in their heads.

So they'd rapidly stop interacting (or worse) with antisocial pieces of shit that shoot people to take their stuff.

Moreover, there are ways to implement Basic Income in cryptocoin. That alone would stop all of crime committed for purely monetary reasons, if it's enough to survive on.

[Brushan]

To nwbitcoin:
I'm not an ideological Bitcoin user but a logical Bitcoin user. My understanding of your argument is that we will lose if we don't follow laws and regulation. The only loss i see is that 1BTC won't go up in value as quickly as if we stayed legit and connected with big businesses. But then why would you want to use Bitcoin? You're still a part of the system that Bitcoin was made to counter. I understand that some people only entered Bitcoin to get rich quick but for me it goes much deeper than this. Bitcoin in it's current state is unstopable. We can make an alternative economy and compete with todays economy which would force, for example, banks to offer better service. People that are tired of the regulated world economy which is regulated just so rich can stay rich and poor are forced to keep being poor can just leave and enter the free market of Bitcoin. I don't hate todays economy but we are facing problems that naturally come with monopolies and we need competition. Something that todays technologies like the internet and p2p can offer. My thoughts about Bitcoin has always been that you shouldn't get rich by HOLDING bitcoins. You should USE this wonderful technology to make money because it makes it much easier without the regulations of the elite made by them for you so they can keep their power.

To proudhon:
This is what scares me. Just like you and me, they know that they can't regulate Bitcoin in its current state. That is why the talk about confiscating tainted bitcoins makes me believe that they are planning to either fork Bitcoin or start a central banking type service. They probably will do it with the excuse that it is required to invite big businesses and then everybody will become rich. And most will probably agree because they want their BTC to rise in value. It shocks me that people remain calm when head devs make suggestions like these. Soon Bitcoin will be the same as fiat or gold. Regulated and manipulated by the banks and the government will keep track of everything you do.

[DeeSome]

Bitcoin will remain unregulated.  It doesnt matter if people in the community want it regulated or if government(s) want it regulated.  Bitcoin, by nature, is unregulated.  They cannot seize your btc unless under duress, etc.  You are your own bank.

Until the devs fork it and say: "Here is the regulated Bitcoin 2.0 which will be worth 10000USD because of big company involvement, if you don't want use it then use the unregulated Bitcoin 1.0 for illegal activities which will be worth about 2USD."

Looking at the majority of people involved in Bitcoin i'd place my money on that everybody would go for 2.0. Of course, the Bitcoin Foundation together with other large companies (paypal, banks etc), will make a plan to slowly manipulate us into believing that a regulated Bitcoin will be much better for everyone. If you ask me, it has already begun.

I see Bitcoin moving in this direction.
This quote needs to be kept bumped to the top of this thread.

[bassclef]

+1

Eternal vigilance is the price of liberty.

[Stampbit]

A self regulating coin will spring up in the next few years that will eliminate alot of the volatility we are seeing today. As for the government/banks controlling the coin itself, it cant or it would be worthless.

[MGUK]

Handling bitcoins is already pretty much regulated, at least when it comes to converting to fiat.
 - Exchanges have to abide by AML/KYC.
 - UK Exchanges need to register with HMRC.
 - They have to justify and explain all sources of income so the banks don't close them for suspicious activity.
 - Any transactions that are suspicious must be reported to UK intelligence agencies otherwise exchange owners face prosecution.
 - Any earnings from Bitcoin must be declared to be taxed.

A lot of these things are in place to prevent money laundering, but a lot of this still relies on goodwill, of which not everyone has.

Society is about compromise. In the UK, we have a usable transport infrastructure, a usable energy infrastructure, a usable education system, and for that, morally, we should probably pay something some how.

It sounds kinda cliché and and "what they want you to think" but not at least considering supporting legislation to stop that sort of evasion is just aiding theft.If we say no to legislation & regulation, on some level not agreeing to try hinder tax evasion, we're no better than the huge corporations in the news every week paying 0 tax and holding everything in off shore accounts.

Although I think morally we should at least entertain the idea of regulation and cooperation, I think a lot of consideration does need to be made to get the right balance between enforceability and protection of freedoms and privacy.

[proudhon]

A self regulating coin will spring up in the next few years that will eliminate alot of the volatility we are seeing today. As for the government/banks controlling the coin itself, it cant or it would be worthless.

How would a distributed, blockchain currency self regulate to dampen volatility?  In order to do that it would be dependent on some source for its information about what price people were trading it at.  Would it use one source?  Many sources?  Who would maintain these price feeds?  Would not the price feeds be susceptible to hacks where invalid or disruptive data could be delivered to influence the way the currency self-regulates?

It's a nice thought, but it just adds a layer of complexity and potential exploitation to something that in its growing up years can already be manipulated and exploited pretty easily.  It's easy to forget how young this idea is.  If it's to persist into the future at all and become a significant player in global economics its journey there will be volatile, that's just the way it will go.

[benjamindees]

Retep is opposed to improving scalability so transactions can remain on the blockchain. He has some opinions about what the blockchain should be used for, and he wants to cap the network at 7 transactions per second, and blow fees through the roof so that most of the current uses of Bitcoin will have to go somewhere else.

Confirm/deny?

[Stampbit]

A self regulating coin will spring up in the next few years that will eliminate alot of the volatility we are seeing today. As for the government/banks controlling the coin itself, it cant or it would be worthless.

How would a distributed, blockchain currency self regulate to dampen volatility?  In order to do that it would be dependent on some source for its information about what price people were trading it at.  Would it use one source?  Many sources?  Who would maintain these price feeds?  Would not the price feeds be susceptible to hacks where invalid or disruptive data could be delivered to influence the way the currency self-regulates?

It's a nice thought, but it just adds a layer of complexity and potential exploitation to something that in its growing up years can already be manipulated and exploited pretty easily.  It's easy to forget how young this idea is.  If it's to persist into the future at all and become a significant player in global economics its journey there will be volatile, that's just the way it will go.

Read up on some of the alt-coin ideas floating around, some of them are working with the idea of lifting artificial limits like fixed/descending block rewards, demurrage to encourage its use as a currency and not a commodity, and  introducing some level of AI to have the network automatically perform the functions of a central bank.

[nwbitcoin]

To nwbitcoin:
I'm not an ideological Bitcoin user but a logical Bitcoin user. My understanding of your argument is that we will lose if we don't follow laws and regulation. The only loss i see is that 1BTC won't go up in value as quickly as if we stayed legit and connected with big businesses. But then why would you want to use Bitcoin? You're still a part of the system that Bitcoin was made to counter. I understand that some people only entered Bitcoin to get rich quick but for me it goes much deeper than this. Bitcoin in it's current state is unstopable. We can make an alternative economy and compete with todays economy which would force, for example, banks to offer better service. People that are tired of the regulated world economy which is regulated just so rich can stay rich and poor are forced to keep being poor can just leave and enter the free market of Bitcoin. I don't hate todays economy but we are facing problems that naturally come with monopolies and we need competition. Something that todays technologies like the internet and p2p can offer. My thoughts about Bitcoin has always been that you shouldn't get rich by HOLDING bitcoins. You should USE this wonderful technology to make money because it makes it much easier without the regulations of the elite made by them for you so they can keep their power.

To proudhon:
This is what scares me. Just like you and me, they know that they can't regulate Bitcoin in its current state. That is why the talk about confiscating tainted bitcoins makes me believe that they are planning to either fork Bitcoin or start a central banking type service. They probably will do it with the excuse that it is required to invite big businesses and then everybody will become rich. And most will probably agree because they want their BTC to rise in value. It shocks me that people remain calm when head devs make suggestions like these. Soon Bitcoin will be the same as fiat or gold. Regulated and manipulated by the banks and the government will keep track of everything you do.

I totally agree with your ideological reasons for using bitcoin, and the sooner we can buy and sell stuff with it, the better - however reality is what actually happens, rather than what you'd like to happen!
People always speculate with new stuff, its human nature - and the big problem for bitcoin at the moment is that there is very little else you can do with it!

As for your argument for the regulations not increasing the value of bitcoin, you are missing the reality of the situation.  What if the free market decide, after its got bored of speculating, that without regulation bitcoin becomes valueless? Of, more likely, the value of bitcoin drops to nothing as the alternative coins which are willing to play ball go up in value?

Regulations don't mean centralisation, it means playing by the rules.  It means more stabilisation, it means big business has a far lower risk to deal with, which means higher valuations. 

However, I don't really need to justify any of my thoughts because the final bit of this situation is that its going to happen anyway - regardless of what we think.  You might as well be ready for it!

[nwbitcoin]

Let me ask you a question.

What stops someone from putting a bullet in your head and stealing all your stuff?

The answer is regulations.

This is not right. The answer is The Law.

One depends on an immutable understanding between human beings.

The other is political.

And what is the law?  Just a set of regulations that we all agree to live by as the cost of being a part of society.

If you don't agree, you are kidnapped and held against your will until common opinion says you have learnt your lesson. Sometimes, in some places, they kidnap you and kill you.  I think that may be Texas!

[nwbitcoin]

Let me ask you a question.

What stops someone from putting a bullet in your head and stealing all your stuff?

The answer is regulations.

I have been posed this question numerous times and have thus had much incentive to think about it a lot. And my answer(s) differ from your answer. Please consider:

I came to the conclusion that what stops people from stealing from me/putting a bullet in my head can be summarized in 3 points:

1. people have little reason to randomly kill me. I admit that they can have reasons to steal from me, though.
2. What stops them from stealing my stuff even when they have reasons to do so is FEAR of retribution. This is the crucial point imo. Right now this fear of retribution manifests itself as fear of getting arrested, sentenced, fined and put into jail by the authorities. This is where we fail massively as a society I think, but I won't go into detail on why I think it's not a good idea to relegate responsibilities for the most crucial parts of your life (such as protection of your property, your education, health care, retirement etc.) to a monopolistic central authority. I'm certain you can find some arguments for why that might be the case. Fear of retribution can also take the form of the belief that if found stealing my stuff, he'll get shot in the face (by me) or found out and otherwise punished by my friends or some people/organization I paid for protecting my stuff. Ultimately we don't need regulation for this, but this is what we use as of now.
3. Finally please have some trust in people. Let me ask YOU a question: is regulation the only thing stopping you from stealing other peoples stuff and shooting them in the face? Or is it just there to protect YOU against those OTHER people, who might want to do that. Who told you people are like that? Oh yes, might have been the same people, who are regulating you to keep you safe But my question still stands.

In the end I'm just allergic to central power, I heard it's a chronic condition, feel free to ignore me

I like your thoughtful answer, so I will give you an alternative viewpoint.  Please remember that while I also hate regulations, I am very aware that there is no way you can stop it happening, it would just be nice to be on the winning side for once!

You notice that there is very little to stop someone from shooting you in the head except regulations!
The FEAR of retributions is the other side of regulations.  If you break them, either by laundering bitcoins, or by shooting someone dead, its the fear of of enforcement of regulations that make regulations work.

You ask what stops me from shooting people in the head? This is where it gets difficult because you are asking someone, with a similar moral compass to you.  I wouldn't go and do something like that because its morally wrong.  For 70% of the population, this is the only answer you will get.  However, that last 30% is the problem.  We might like to think they are all the criminals in prisons, but its not actually true.

Most of them are the psychopaths who have never been outed.  They run companies, they are your managers, the people who would say anything to get ahead. Without regulations, there are no retributions, and without retributions, there are no reasons not to do what it takes to get what you want.
Why do you think bitcoin keeps getting DDos'ed?  Why do the coins keeps getting pumped and dumped?  Because there are no rules saying you can't do it.

It does feel infantile to have rules stating the obvious to stop us hurting ourselves, and that is when regulations are done badly.  However, a few well written rules help everyone.  The question is, who is the best people to write those rules?
Us!

[marcus_of_augustus]

We need regulation because that is how you keep others from creating regulations and it makes far more sense to create the regulations in house, than to give it to someone who has an unknown agenda.

I have seen many users post this argument and i don't understand it. HOW can you regulate a currency that was designed impossible to regulate? To me it looks like the people in charge are trying to make either a fork or a central bank-type layer so that it can be regulated. Because let's face it, Bitcoin right now CAN'T be regulated if we don't let them regulate it. They want to close all the exchanges? Fine! We have TOR, we can meet in the streets and people will find other ways to bypass that. That's why 'm not afraid of the government forbidding Bitcoin. But it looks to me like they want to change the whole nature of Bitcoin and that is what's dangerous. And even more because many Bitcoin users have no problem with that.

Think of it this way.
You have a wonderful Apple pie on your kitchen window, which is warm, and smells delicious.
If you give the bully a small slice, he will leave you alone, happy that he got some pie.
If you don't, he might take the whole pie, and give you a small slice.
If you run away with the pie, he might come after you and not only steal your pie, but also smash it into your face.
If you run away, you might out run the bully, but also end up away from the house, not able to watch TV while eating your pie with no plate, cutlery, or lemonade!

The point is, when you have something that someone else might want, the first move is to be reasonable, because it stops them being unreasonable!

Bullies never settle for "a small slice" ... they always come back for more and more and more because they are getting it for free ....

And the "we don't negotitate with terrorists" doctrine applies here also.

[BigJohn]

In the last round of grant proposals at one point Gavin suggested someone submit a grant for a trust-free mixer service to help people make the coins in their wallet more anonymous by mixing them with a large pool of other users. I asked Gavin about that later, and he said the foundation lawyers nixed the idea because efforts to make Bitcoin users more anonymous could be seen to be aiding money laundering, especially if the foundation itself was paying for development and to run the servers.

We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin. We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data. We can work with them to find ways to apply AML rules to Bitcoin transactions and to the exchanges. There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made. Maybe even one day we'll be required to prevent dangerous levels of deflation. A lot of these changes are technical, such as improving scalability so transactions can remain on the blockchain, developing P2P blacklist technologies, and preventing deflation.

Sounds freakin' dandy. Count me out if it goes this direction.

+1

This basically sums up my feelings on the topic. If they do any sort of thing to work with the government, like taxation, anti-anonymity measures beyond what's in the nature of Bitcoin itself, that's the day that I cash out and stop recommending it to people.

[tvbcof]

We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin. We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data. We can work with them to find ways to apply AML rules to Bitcoin transactions and to the exchanges. There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made. Maybe even one day we'll be required to prevent dangerous levels of deflation. A lot of these changes are technical, such as improving scalability so transactions can remain on the blockchain, developing P2P blacklist technologies, and preventing deflation.

Sounds freakin' dandy. Count me out if it goes this direction.

The trouble(*) is that at this time, and possibly for some time to come, for every '1' in the real world who is turned off by such things, there will be '10' who will think they sound great(**).  Their response will be 'Count me in.'

(*) Of course "One man's trash is another man's treasure." so 'trouble' may not be the right word exactly.

(**) I'm not standing by and exact 1/10 ratio.  Just making a point as I see it.

[ErisDiscordia]

Thanks for the reply nwbitcoin.

I think I understand your position better now. Let me explain why I still don't like it, though

But first...

You ask what stops me from shooting people in the head? This is where it gets difficult because you are asking someone, with a similar moral compass to you.  I wouldn't go and do something like that because its morally wrong.  For 70% of the population, this is the only answer you will get.  However, that last 30% is the problem.  We might like to think they are all the criminals in prisons, but its not actually true.

Do you really think the % is this high? I think we have different degree of trusting people in general, I consider the % of troublemakers (shaped that way by upbringing, society, or simply born that way) to be considerably less. Basically I work with the assumption that people are generally a decent bunch. Put them into a tough spot, though and they can quickly become selfish or downright evil. That's why I feel it's important to help shape society - because the very environment we live in might just be the biggest influence in what sort of people we are. In other words - a society like ours is bound to produce an abundance of sociopaths. For a sociopath is one who fears society and today it's easy to fear society, especially while conflating society with government and the state.

Most of them are the psychopaths who have never been outed.  They run companies, they are your managers, the people who would say anything to get ahead. Without regulations, there are no retributions, and without retributions, there are no reasons not to do what it takes to get what you want.

As you say, sociopaths (I assume when you use the word psychopath you mean something like I mean by sociopath) are rampant in our society. Not surprising at all. And there is nothing a sociopath likes better than a position of power. For when he has power, he has control over that which he fears. I agree this is a problem.

But don't you see that if we are creating regulations, meaning universal sets of rules and coupling them with institutions (backed by force) to enforce them, we are giving the sociopaths exactly what they want and need? Now instead of going around stealing other peoples stuff and randomly shooting pedestrians in the face, like you feared they would do - they run your government, your police force, your money and what have you.

Power corrupts and power also attracts the corrupted. The way to deal with this is not by trying to find the right people to write the right set of regulations - universal sets of rules, but to let everybody find their own rules.

People are afraid of Anarchy as of being a state without rules. This is nonsense, people are so obsessed with rules, they will instantly make up new ones. The crucial difference is whether we accept diversity, or try to force everyone to live by a single universal set of rules. The best ones, written by the brightest and most well-meaning people of all, of course.

My signature sums it up.

[marcus_of_augustus]

We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin. We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data. We can work with them to find ways to apply AML rules to Bitcoin transactions and to the exchanges. There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made. Maybe even one day we'll be required to prevent dangerous levels of deflation. A lot of these changes are technical, such as improving scalability so transactions can remain on the blockchain, developing P2P blacklist technologies, and preventing deflation.

Sounds freakin' dandy. Count me out if it goes this direction.

The trouble(*) is that at this time, and possibly for some time to come, for every '1' in the real world who is turned off by such things, there will be '10' who will think they sound great(**).  Their response will be 'Count me in.'

(*) Of course "One man's trash is another man's treasure." so 'trouble' may not be the right word exactly.

(**) I'm not standing by and exact 1/10 ratio.  Just making a point as I see it.

Yeah but the 10 who think it sounds great don't have any money ... and is a large part why they don't.

Bitcoin is getting adopted because capital markets can appreciate what good money looks like ... if bitcoin now turns around and changes itself into bad money capital will move elsewhere.

Govt. money was formerly gold, then paper cash and now traceable digital units ... if govt. money was widely available as untraceable (fungible) gold-backed digital units bitcoin would be worthless.

[countryfree]

I'm still quite new here, but count me with the people against all regulations regarding bitcoin.

That doesn't mean I am against all laws and morals. I understand the need of preventing murder and rape, but you can't harm anyone with virtual currency.

[Operatr]

Regulations from the same monsters that got us into the current financial hell we are all in now? No thanks

[Maged]

We need regulation because that is how you keep others from creating regulations and it makes far more sense to create the regulations in house, than to give it to someone who has an unknown agenda.

I have seen many users post this argument and i don't understand it. HOW can you regulate a currency that was designed impossible to regulate? To me it looks like the people in charge are trying to make either a fork or a central bank-type layer so that it can be regulated. Because let's face it, Bitcoin right now CAN'T be regulated if we don't let them regulate it. They want to close all the exchanges? Fine! We have TOR, we can meet in the streets and people will find other ways to bypass that. That's why 'm not afraid of the government forbidding Bitcoin. But it looks to me like they want to change the whole nature of Bitcoin and that is what's dangerous. And even more because many Bitcoin users have no problem with that.

Think of it this way.
You have a wonderful Apple pie on your kitchen window, which is warm, and smells delicious.
If you give the bully a small slice, he will leave you alone, happy that he got some pie.
If you don't, he might take the whole pie, and give you a small slice.
If you run away with the pie, he might come after you and not only steal your pie, but also smash it into your face.
If you run away, you might out run the bully, but also end up away from the house, not able to watch TV while eating your pie with no plate, cutlery, or lemonade!

The point is, when you have something that someone else might want, the first move is to be reasonable, because it stops them being unreasonable!

Bullies never settle for "a small slice" ... they always come back for more and more and more because they are getting it for free ....

And the "we don't negotitate with terrorists" doctrine applies here also.

Let me put this in a way that will make you anarchists very happy:

Continuing this analogy, almost everyone on the block praises and warships this bully. So much so, that when they see that he's eating some of your pie, they start being willing to do anything to get even a nibble of the pie. The bully thinks nothing of it, because he feels like he's had enough pie for a few hours. Turns out, everyone really loves this pie, and can't get enough of it! But, like you said, the bully might get hungry again. So, he keeps going back for more. However, the neighborhood notices that each time the bully goes back, there are less and less good parts of the pie left for everyone else. They realize that they love this pie more than they love this bully, so they gang up and restrain the bully to ensure that he can never again be a threat.

If you truly believe that Bitcoin is the only true currency and that governments are unable to hold back, some light regulation from the government now would allow you to destroy the government later.

Personally, I just think that the worries about regulation are a terrible slippery slop argument, since there is no way that anyone could get the support needed to change the protocol in the ways retep describes in the later portion of his post. As for the earlier parts, there is nothing that anyone can do to prevent someone from bypassing those regulations, even if most people are only using a government-approved client. A black market within even a heavily-regulated Bitcoin would have significantly more diversity and depth than one that exists in a world where Bitcoin is completely illegal. Paypal is extremely regulated, and yet I can pay for a DDoS attack on someone while also paying to steal their identity, all with Paypal, no problem. I could probably even buy drugs with Paypal. So no, I'm not too worried about our future.

[Peter Todd]

FWIW I think you should just submit a pull request to the foundation bylaws, and add a section on anonymity and decentralization. See how they respond, if at all.

You can submit that pull request too you know.

[Freebanking.org]

What is the benefit to regulation? Do gold and silver buyers have regulation?

In short, yes.

http://www.nestmann.com/u-s-treasury-we-wont-tell-you-whats-reportable/

http://www.fincen.gov/news_room/rp/advisory/pdf/advis33.pdf

http://www.fincen.gov/news_room/rp/rulings/html/FIN-2012-R002.html

http://www.fincen.gov/news_room/rp/files/sar_tti_20.pdf

...lots more

Some regulations for dealers, travelers, et al.

[Freebanking.org]

Money laundering/criminal activity? Please, you get that with every currency. You cannot stop black markets from existing.

It is not the regulators' jobs to protect us from any of this. It is our job.

Also remember: If you give them an inch, they will take a mile.

Yes, and there are (anti-money laundering and other) regulations with other currencies, just as there are now with bitcoin.

The regulators have a different view of their job than you do for them.  ;-)

[Freebanking.org]

Govt agencies wanna strangle BTC in it's crib...

No, they don't "wanna strangle BTC in it's crib" they just don't care if they do.

[solex]

Money laundering/criminal activity? Please, you get that with every currency. You cannot stop black markets from existing.

It is not the regulators' jobs to protect us from any of this. It is our job.

Also remember: If you give them an inch, they will take a mile.

Yes, and there are (anti-money laundering and other) regulations with other currencies, just as there are now with bitcoin.

The regulators have a different view of their job than you do for them.  ;-)

Do people remember the situation 25 years ago?  AML was unheard of except within law enforcement dealing with the mafia.

Today, every citizen and small company is plagued with providing AML documentation when doing business. Is there any less money-laundering done today than 25 years ago? Where are all the news articles about money-launderers arrested because their documentation was flawed? ML is a modern-day bogeyman like the witches and giants of Grimm's fairy tales. Similarly, all the KYC regulation is a non-productive red-tape burden (useful for denying banking services to Bitcoin exchanges though).

As governments continually expand in size they are suffocating ordinary people with excessive regulation and surveillance. IMHO, this is because fiat systems are failing, so ever more controls are needed to maintain the status-quo. The only regulation of Bitcoin that would satisfy fiat-issuing governments would be regulating Bitcoin into an emasculated Buttcoin, which is what the OP is describing.

Edit: A timely post in ZH which reminds us why Satoshi created Bitcoin:

Unfortunately, free enterprise is being strangled to death in the United States today.  Entrepreneurs and small business are being pounded into oblivion by rules, regulations, red tape and oppressive levels of taxation.  ...  Meanwhile, wealth and power continue to become even more heavily concentrated in the hands of big government and big corporations. ... We need to change the rules of the game so that entrepreneurs, small businesses and average workers can thrive in this country once again. 

http://www.zerohedge.com/news/2013-05-02/22-facts-prove-bottom-90-america-systematically-getting-poorer

Buttcoin does not change the rules of the game.

[tvbcof]

...

Edit: A timely post in ZH which reminds us why Satoshi created Bitcoin:

Unfortunately, free enterprise is being strangled to death in the United States today.  Entrepreneurs and small business are being pounded into oblivion by rules, regulations, red tape and oppressive levels of taxation.  ...  Meanwhile, wealth and power continue to become even more heavily concentrated in the hands of big government and big corporations. ... We need to change the rules of the game so that entrepreneurs, small businesses and average workers can thrive in this country once again. 

http://www.zerohedge.com/news/2013-05-02/22-facts-prove-bottom-90-america-systematically-getting-poorer

Buttcoin does not change the rules of the game.

I glanced through the ZH thing and didn't see any evidence that 'Satoshi' did any particular thing for any particular reason.

You would not, by chance, be projecting your beliefs onto the actions of someone you don't know would you?  If so, it's probably not as helpful to your cause as you might think it is.  Lotsa people would probably think it makes you look like a jackass.

[solex]

...

Edit: A timely post in ZH which reminds us why Satoshi created Bitcoin:

Unfortunately, free enterprise is being strangled to death in the United States today.  Entrepreneurs and small business are being pounded into oblivion by rules, regulations, red tape and oppressive levels of taxation.  ...  Meanwhile, wealth and power continue to become even more heavily concentrated in the hands of big government and big corporations. ... We need to change the rules of the game so that entrepreneurs, small businesses and average workers can thrive in this country once again.  

http://www.zerohedge.com/news/2013-05-02/22-facts-prove-bottom-90-america-systematically-getting-poorer

Buttcoin does not change the rules of the game.

I glanced through the ZH thing and didn't see any evidence that 'Satoshi' did any particular thing for any particular reason.

You would not, by chance, be projecting your beliefs onto the actions of someone you don't know would you?  If so, it's probably not as helpful to your cause as you might think it is.  Lotsa people would probably think it makes you look like a jackass.

Satoshi wanted sound money. Evidenced in the genesis block. The ZH article describes a lot of problems which are created and perpetuated by unsound (fiat) money.
Some of ideas in the OP make cryptocurrency unsound, like freezing and blacklisting addresses.

[wolverine.ks]

i say that there is no 'we'

let each individual do what they believe is in their individual best interest.

this tends to be whats best for whoever remains standing anyway

just make sure you are still standing when the dust clears

[ewitte]

All that is needed is a way to agree on a price without depending on a single point of failure.  People that go into a panic because 1 website is down is the last thing we need.

[Freebanking.org]

Do people remember the situation 25 years ago?  AML was unheard of except within law enforcement dealing with the mafia.

Today, every citizen and small company is plagued with providing AML documentation when doing business. Is there any less money-laundering done today than 25 years ago? Where are all the news articles about money-launderers arrested because their documentation was flawed? ML is a modern-day bogeyman like the witches and giants of Grimm's fairy tales. Similarly, all the KYC regulation is a non-productive red-tape burden (useful for denying banking services to Bitcoin exchanges though).

As governments continually expand in size they are suffocating ordinary people with excessive regulation and surveillance. IMHO, this is because fiat systems are failing, so ever more controls are needed to maintain the status-quo. The only regulation of Bitcoin that would satisfy fiat-issuing governments would be regulating Bitcoin into an emasculated Buttcoin, which is what the OP is describing.

Edit: A timely post in ZH which reminds us why Satoshi created Bitcoin:

Unfortunately, free enterprise is being strangled to death in the United States today.  Entrepreneurs and small business are being pounded into oblivion by rules, regulations, red tape and oppressive levels of taxation.  ...  Meanwhile, wealth and power continue to become even more heavily concentrated in the hands of big government and big corporations. ... We need to change the rules of the game so that entrepreneurs, small businesses and average workers can thrive in this country once again. 

http://www.zerohedge.com/news/2013-05-02/22-facts-prove-bottom-90-america-systematically-getting-poorer

Buttcoin does not change the rules of the game.

Anti-money laundering laws are the new RICO after we tightened up the racketeering abuses.  After I defeated the Know Your Customer rule in 1997-98, AML came back with a vengence in Title III of the USA PATRIOT Act (though we got some of the worst of it taken out/watered down).  Search my name and KYC for more background there.

There are plenty of arrests and fines for AML vioations.  Being ignorant of them doesn't mean they aren't there.

Yes, this is the challenge right now: is the Bitcoin community going to just ignore the problem like the now defunct e-gold did, or are you going to learn from history and not repeat the same mistakes?

[Schrankwand]

Today, every citizen and small company is plagued with providing AML documentation when doing business. Is there any less money-laundering done today than 25 years ago? Where are all the news articles about money-launderers arrested because their documentation was flawed? ML is a modern-day bogeyman like the witches and giants of Grimm's fairy tales. Similarly, all the KYC regulation is a non-productive red-tape burden (useful for denying banking services to Bitcoin exchanges though).

As governments continually expand in size they are suffocating ordinary people with excessive regulation and surveillance. IMHO, this is because fiat systems are failing, so ever more controls are needed to maintain the status-quo. The only regulation of Bitcoin that would satisfy fiat-issuing governments would be regulating Bitcoin into an emasculated Buttcoin, which is what the OP is describing

The key is the following: Do not get regulation into the fucking protocol. The protocol should be completely void of this.

You cannot make worldwide differing regulations go into a protocol.

You can reulate exchanges. You can regulate people, you can regulate taxes, you can regulate whatever you want but DON'T. TOUCH. THE. PROTOCOL.

Yes, this is the challenge right now: is the Bitcoin community going to just ignore the problem like the now defunct e-gold did, or are you going to learn from history and not repeat the same mistakes?

The key is not to be adressed in Bitcoin, but in exchanges. The exchanges are where the money goes. Anything else should be unregulated. If you regulate the coin itself, it means the same as watching and controlling cash exchanges.

The whole idea of Bitcoin would be void and useless. If I want to send someone money, i can use fucking paypal. If I want to use Bitcoins, I want them to work like they do, RIGHT NOW. I have no quarrels in paying taxes on speculation wins. I have no quarrels taxing miners with a tax when they sell their created assets, as long as they are legitimate businesses.

When someone touches the protocol and automatically taxes me for sending a transaction, im gonna hit them.

I would suggest the following: Some banks tend to take fees out once you take out money. If exchanges work in this way and your taxes are being paid through the exchange providers, alright. But only for citizens in country X where it is located. Since this can hardly be done, tax the exchanges a little harder and make them confirm AML laws.

Anything else will destroy the very idea of bitcoin. It will be useless.

[abbyd]

The OP's post is very slippery. It's written as if it's describing the situation from a neutral stance, but it's full of political games.

Let's start with the topic:

"Do we want to work with money regulators, or keep Bitcoin unregulated?"

This obviously not the choice. The regulators are going to regulate Bitcoin use whatever the foundation, or anyone else does. The question is whether we think the foundation should lobby money regulators to reduce unhelpful regulation.

Agreed. This "worrying about them getting regulation wrong" is ridiculous. Let's say the regulations are too broad - then they will be unenforceable. Or too narrow - then they won't be applicable.  Let's say the regulations are draconian - that will immediately bring about hundreds of forks and drive everyone underground. Or they're lax - well then everybody just LOLZ. How about if regulations are technically unsound? Everyone just adjusts their behavior such that they skirt around the language. What is the definition of "bad regulation"? Well, if you're opposed to regulation then the terms are redundant, and if you're in favor of regulation, well, let's just say that everyone will have different criteria to make that determination...

Look people, you're worrying about your master making a cage that is uncomfortable for you - so you're going to tell him how far you'd like your bars apart?!
Have you ever heard of "rearranging the deck chairs on the Titanic"?

Also, stop with the blockchain limitation FUD - that's a sidetrack issue that is not relevant to the real issue:
 Are you going to man up or suck up?

[yona]

as nwbitcoin points out i also believe realty is not in our control,
as stated here there will be pressure by the greater market, organisations and governments  to regulate bitcoin and fork it to a modified more 'controllable' form.
i wish we could focus on what we can do to keep the spirit of bitcoin stronger.

here is what i posted: https://bitcointalk.org/index.php?topic=194853.0

same as the people who printed the first dollar bills and coins inscribed  'IN GOD WE TRUST' as a motto for the united states and it's beliefs at the time or casascuis physical bitcoins are inscribed with 'VIRES IN NUMERIS'  it is possible to imprint the blockchain itself with the BitCoin Concept.

as the blockchain can and does contain data that is not purely mathematical and is not only related to the transactions and the public ledger, how about trying to draft in a very minimallistic way the principal and goals of bitcoin [for ex. the way it is described in Satoshi's whitepaper http://bitcoin.org/bitcoin.pdf] so it will stay in the blockchain forever?

might be spitting at the rain, but why not?

[markm]

And to think some people thought too many altcoins were being spawned!

Ironic, since maybe we haven't spawned anywhere near enough of them yet.

If everyone has choices of several hundred altcoins, most of which are small-footprint enough not to need noticeable amounts of server infrastructure and bandwidth,  the real bitcoin, divided into however many individual chains it takes, under however many names / labels / brands it takes. to be small enough to survive, will hopefully survive, while selloutcoin or bigbrothercoin or whatever the goons get the Foundation goons to make plays token blockchain for the bankers and corps.

Though they'd prefer to launch their own, surely?

Even more proliferation, maybe?

How about we tell them hey this is free open source, each and every code change you want you can implement in your own fork, and any combinations of them to your heart's content, go crazy, have fun, roll your own...

..And democracy can come into play as each individual chooses which blockchains they choose to use for what, when, where and how...

-MarkM-

[marcus_of_augustus]

How about we tell them hey this is free open source, each and every code change you want you can implement in your own fork, and any combinations of them to your heart's content, go crazy, have fun, roll your own...

The unintended consequences of attempting to regulate the mathematical protocols of p2p open source software are infinitely unpredictable ....

... hilarity, mayhem and ridicule will inevitably ensue if any idiotic regulator or legislator chooses to take that path. Power can only be commanded while respect remains.

My only advice to those pondering or advocating for such foolhardy actions .... "When you are in a hole, stop diggin'."

[BTCisthefuture]

This is a good question but a hard one to really answer.

I guess my answer would be "it depends".  Some regulations in certain areas could certainly help legitimize bitcoin and actually make it easier and more realistic to use.  While other regulations or too much regulations could pretty much mess up the way people use bitcoin pretty heavily.

[Chief Satangkai]

...We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin...

Thats just so immensely insane and wrong!  I mean... WTF!

[nwbitcoin]

This has been one of the most thoughtful threads on here for a while and we do have a dilemma, which can't really be fixed.

My opinion is that you don't want to put your head in the sand, because things will happen without us.

However, as the regulations on the Internet has shown, its a never ending battle of not having too many rules, as regulators love to create new ones, rather than use the ones they have more creatively!

In the long term, all the wonderful elements of bitcoin, the Rand ideal of total freedom, will disappear. It will be exactly how posting what you like on the Internet went from 'What copyright?' to 'Desist and remove notices' in only 10 years.

We are in a wonderful position at the moment to be able to guide the direction of regulations, and I would agree that Bitcoin the protocol, should be left alone.  If we help by creating a best practice approach to exchanges, and other areas where fiat and Bitcoin mix, then we will prevent a more hard nosed approach to the rest of what bitcoin is about for the forseeable future.

Maybe the answer is to use bitcoin as the public face of crypto currency, and as the whole idea matures, the freedom element is taken by some new altcoin, much like TOR is the internet for the minority who demand privacy.  But don't expect these coins to ever be worth a fraction of a bitcoin!

[marcus_of_augustus]

Maybe the answer is to use bitcoin as the public face of crypto currency, and as the whole idea matures, the freedom element is taken by some new altcoin, much like TOR is the internet for the minority who demand privacy.  But don't expect these coins to ever be worth a fraction of a bitcoin! Wink

Winks and grins aside .... the market decides which is the best money, not any arrogant, regulation-pusher on the Intertubes.

Now ask yourself this, would you rather hold a currency that allows for total privacy in transactions or one that does not?

[Dharmadog]

5 pages in and it's still a stupid path to go down.

[benjamindees]

the first dollar bills and coins inscribed  'IN GOD WE TRUST' as a motto for the united states

The first US coins were inscribed 'MIND YOUR BUSINESS'.  That was the belief upon which the United States was founded.  It wasn't until we got fraudulent fiat ponzi money that it was replaced with the phrase 'IN GOD WE TRUST'.

[gmaxwell]

The first US coins were inscribed 'MIND YOUR BUSINESS'.  That was the belief upon which the United States was founded.  It wasn't until we got fraudulent fiat ponzi money that it was replaced with the phrase 'IN GOD WE TRUST'.

Today I learned!

This thread is kinda weird— it seems to suggest that there is a OR here, but I don't see how any answer can be anything other than yes, both. Bitcoin is just another thing you can own, like coal or beanie babies— and it would be very unusual for it to be highly regulated itself at least according to the norms of the more free nations. ... but it interacts with the banking world, which is highly regulated.  Some people will see it in their interest to try to work with regulators to achieve good outcomes for themselves (and everyone else), other people will go off in a multitude of directions which are not regulatory centric (and which, as a result, don't interact much with traditional banking).  Both things will happen no matter what folks want overall.  This doesn't bother me: The fact that Bitcoin is diverse is part of what makes it strong.  Not only would "regulating bitcoin" (itself) be inconsistent with the expected freedoms in first world nations, it's not obviously viable so long as bitcoin is thoroughly decentralized.

The OP also brought up another question though... how do we fund useful developments which are highly decenteralized— and thus can't easily fund themselves— when they don't really mesh well with the banking/regulation universe that many of the big name business players that we'd hope to bankroll development?

I don't really have an answer— I think ultimately our inability to answer it might be our downfall. Eventually the people currently working on Bitcoin technology for the love and principle of it will wear out. Will we only be left with serious work being done by people deeply in bed with large regulatory-target businesses?

[Peter Todd]

This thread is kinda weird— it seems to suggest that there is a OR here, but I don't see how any answer can be anything other than yes, both. Bitcoin is just another thing you can own, like coal or beanie babies— and it would be very unusual for it to be highly regulated itself at least according to the norms of the more free nations. ... but it interacts with the banking world, which is highly regulated.  Some people will see it in their interest to try to work with regulators to achieve good outcomes for themselves (and everyone else), other people will go off in a multitude of directions which are not regulatory centric (and which, as a result, don't interact much with traditional banking).  Both things will happen no matter what folks want overall.  This doesn't bother me: The fact that Bitcoin is diverse is part of what makes it strong.  Not only would "regulating bitcoin" (itself) be inconsistent with the expected freedoms in first world nations, it's not obviously viable so long as bitcoin is thoroughly decentralized.

I was talking about core technology - for that it is mostly an OR decision strongly based on decentralization. Heck, I would have followed it up with something similar to this pull request but John went of and did it first.

The OP also brought up another question though... how do we fund useful developments which are highly decenteralized— and thus can't easily fund themselves— when they don't really mesh well with the banking/regulation universe that many of the big name business players that we'd hope to bankroll development?

I don't really have an answer— I think ultimately our inability to answer it might be our downfall. Eventually the people currently working on Bitcoin technology for the love and principle of it will wear out. Will we only be left with serious work being done by people deeply in bed with large regulatory-target businesses?

Probably one of the hardest things we may face is that even just working on those technologies and having your name linked to doing so isn't something one should take lightly - yet, building trust in software is difficult enough when the people involved are known publicly, and a key non-monetary reason people work on opensource software is recognition.

Beyond that, there are always foundations, but I can't think of a single one that has operated anonymously.

[marcus_of_augustus]

Eventually the people currently working on Bitcoin technology for the love and principle of it will wear out.

... this has a sad ring of truth to it ... pioneers don't tend to hang around when the maddening throngs show up.

[jdillon]

The OP also brought up another question though... how do we fund useful developments which are highly decenteralized— and thus can't easily fund themselves— when they don't really mesh well with the banking/regulation universe that many of the big name business players that we'd hope to bankroll development?

I don't really have an answer— I think ultimately our inability to answer it might be our downfall. Eventually the people currently working on Bitcoin technology for the love and principle of it will wear out. Will we only be left with serious work being done by people deeply in bed with large regulatory-target businesses?

Assuming money from those interested in a decentralized Bitcoin was available, what suggestions do you have from getting that money from those people to developers in a reasonable way that respects that decentralization? It seems to me that is a big part of the problem by itself. The Dread Pirate may be rich, but if he pops up funding things many would not take his money.

One must also be careful not to distort natural incentives, or at least to weigh the damage against the gain.

http://www.ted.com/talks/dan_pink_on_motivation.html

[tvbcof]

...
The OP also brought up another question though... how do we fund useful developments which are highly decenteralized— and thus can't easily fund themselves— when they don't really mesh well with the banking/regulation universe that many of the big name business players that we'd hope to bankroll development?

I don't really have an answer— I think ultimately our inability to answer it might be our downfall. Eventually the people currently working on Bitcoin technology for the love and principle of it will wear out. Will we only be left with serious work being done by people deeply in bed with large regulatory-target businesses?

I favor halting development of Bitcoin right now (and I wish it happened sooner) and just focusing on hardening and dealing with bugs.  In that case there need not be more than a few highly talented people spending a modest amount of time on things.

I do not believe that this would severely limit the 'growth' of the system in terms of user-base though obviously it would change the trajectory.

As I said in the silly thread about who takes over for Gavin, I think it would make sense to attempt to enlist a person from 'outside' based on a long history of credibility whether or not they have had much to do with Bitcoin itself to weigh in with community direction recommendations.  Bitcoin is important and interesting enough that it may be able to attract some very promising candidates.  If that someone was already highly regarded for their past exploits (i.e., Kaminski or Shnier) and especially if they had taken a vow of poverty (a-la Stallman) I personally would feel a lot more confidence in following their suggestions and staying with the herd.

[cypherdoc]

The OP also brought up another question though... how do we fund useful developments which are highly decenteralized— and thus can't easily fund themselves— when they don't really mesh well with the banking/regulation universe that many of the big name business players that we'd hope to bankroll development?

I don't really have an answer— I think ultimately our inability to answer it might be our downfall. Eventually the people currently working on Bitcoin technology for the love and principle of it will wear out. Will we only be left with serious work being done by people deeply in bed with large regulatory-target businesses?

i thought you said you didn't care about my money?  on the contrary, i think you do (metaphorically speaking  ).

this is going to come down to, quite simply, your attitude .

what i was trying to say in our rather heated github debate was that the majority opinion on various Bitcoin issues should guide your actions, contrary to what you said about the importance of minority opinion of the devs on the Press Center debate.  i think the outcome of that debate should be a lesson to you.  

i think that you are confused as to how to handle yourself.  you devs are being scrutinized closely by the entire Bitcoin community and you can't afford to ignore the opinions of users, merchants, miners, and speculators.   you seem to think that by keeping one foot in the real world arena (regulation, political correctness) that some big money institution will come along and fund you.  that's not going to happen anytime soon b/c of Bitcoin's decentralization and economic tenets.

in case you hadn't noticed, there is plenty of money floating around within the Bitcoin community to fund your dev activities.  look at the $5M that Coinbase just got, or the $1M for BitPay, or the $500K for CoinLab, etc, etc.  if you insist on ignoring the majority opinion of the community, money will not flow to you.  the reason this money is flowing to these ppl is that it likes the principles upon which Bitcoin is built and these ppl are upholding that.  and yes, that means it challenges the State.

once you realize this, you will be much better off.  my advice to you is to voluntarily continue to work hard to improve on the concepts of the original Satoshi code.  as tvbcof said, it doesn't take much since Satoshi seems to have gotten all the economic concepts right.  then build/sell add on services or products on top of Bitcoin, much like etotheipi has done with Armory.  his plan is to eventually monetize that concept and i'm sure he will be successful.  things to be learned from him are: don't be too political, try to determine the majority opinion, help ppl often, treat ppl well, and make a good product.  profit.

money will then flow to you w/o any resistance.  not to mention your Bitcoin value will go up as well.

[Walter Rothbard]

As usual, I have to ask: What is this "we" business?

[2weiX]

As usual, I have to ask: What is this "we" business?

exactly.

[Loozik]

1. I suggest everyone who thinks that the so called government regulation is good or can be good should have a look at this website http://marcstevens.net/ I recommend Call of Shame - this is real fun http://marcstevens.net/cos

2. I also suggest people who think a government exists or a state exists watch this: http://www.youtube.com/watch?v=XdEUR-Xhob8 a government = unicorn = bizarre delusion

3. People who thinks there is evidence that regulations / constitutions apply to him should watch this: http://www.youtube.com/watch?v=ngpsJKQR_ZE&list=UUFeK8ZdHbCqAq3gekWs8aEQ&index=35

4. Allowing people calling themselves a government or USA to mess with Bitcoin = end of Bitcoin.

5. Developers should be paid by Bitcoin system users for work the developers provide; if users want new features in Bitcoin-Qt they crowd-finance such features. I personally do not mind paying a few BTC per year.

6. If point 5 is achieved there is no need for Bitcoin Foundation to do anything therefore people who call themselves a government have nobody to talk to, and no so called regulation can be imposed.

GIVE ME FREEDOM OR GIVE ME DEATH!

[xcsler]

Bitcoin will remain unregulated.  It doesnt matter if people in the community want it regulated or if government(s) want it regulated.  Bitcoin, by nature, is unregulated.  They cannot seize your btc unless under duress, etc.  You are your own bank.

Until the devs fork it and say: "Here is the regulated Bitcoin 2.0 which will be worth 10000USD because of big company involvement, if you don't want use it then use the unregulated Bitcoin 1.0 for illegal activities which will be worth about 2USD."

Looking at the majority of people involved in Bitcoin i'd place my money on that everybody would go for 2.0. Of course, the Bitcoin Foundation together with other large companies (paypal, banks etc), will make a plan to slowly manipulate us into believing that a regulated Bitcoin will be much better for everyone. If you ask me, it has already begun.

I see Bitcoin moving in this direction.
This quote needs to be kept bumped to the top of this thread.

Essentially, I envision keeping your savings on the BTC 1.0 "gold fork" and converting it to the BTC 2.0 "fiat fork" when needed for spending.


The private "gold fork" would be BTC as we know it today outside of government regulation and used by people as a store of value and for "other purposes".

The big brother "fiat fork" would be like the US dollar (and other fiat) with complete government regulation and endorsement. It would be like fiat on steroids. Every transaction would be monitored and taxed at various rates depending on the transaction type. Salaries would be paid in BTC 2.0 with income taxes, social security taxes, medicare taxes being levied. All addresses of businesses and individuals would be known and registered with the authorities. The supply of BTC 2.0 would be managed by the central BTC bank. Etc.

BTC 1.0 would not disappear and its exchange rate would rise in value compared to BTC 2.0.

All in all, this change won't spell the end of Bitcoin but rather mean the conversion of fiat to an all digital currency.
 

[melvster]

There was an interesting post on the Bitcoin Foundation's private forum today:

Hi! I would like the board to discuss opening up lines of communication with money regulators - particularly FinCEN and AUSTRAC (I'm from Australia). FinCEN and other government money regulators need to write new rules as they obviously don't understand Bitcoin's inherent structure.

I think it would be better if some organisation like the Bitcoin Foundation could offer guidance draft rules and work with the regulators.

Otherwise we'll have a situation pretty soon where they try to implement something unworkable, the criminals flood into the Bitcoin system then the argument for 'shutting down bitcoin' grows in popularity.

-Bitcoin Foundation board meeting agenda requests (only viewable by foundation members)


You know, Bitcoin is at an interesting stage of it's development. We've got a lot of money flowing in to the ecosystem and for the first time we're seeing interest from big businesses - even PayPal and Western Union are looking into accepting Bitcoin.

We're also under a lot of attack; big heavily protected exchanges and other websites like Mt. Gox, blockchain.info, and The Silk Road are getting DDoSed; services like Instawallet and mining pools are having funds stolen; exchanges getting shutdown by regulators; (including Mt. Gox suddenly shutting down their off-chain payment service) even child porn related data being uploaded to the blockchain:

It is widely speculated, based on common forum comments in the crypto-anarchist community, that this current round of data spam is intended to force bitcoin users, developers and governments of the world to take action to censor -- or not -- certain bitcoin transactions.  Trying to force the issue, to establish a precedent one way or the other.  Or, more pessimistically, a party could be simply trying to shut down bitcoin.

-Jeff Garzik

The Bitcoin Foundation itself is in a difficult position: we all know who it's funded by, and everyone involved is publicly known. This can be a problem: in the last round of grant proposals at one point Gavin suggested someone submit a grant for a trust-free mixer service to help people make the coins in their wallet more anonymous by mixing them with a large pool of other users. I asked Gavin about that later, and he said the foundation lawyers nixed the idea because efforts to make Bitcoin users more anonymous could be seen to be aiding money laundering, especially if the foundation itself was paying for development and to run the servers.


We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin. We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data. We can work with them to find ways to apply AML rules to Bitcoin transactions and to the exchanges. There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made. Maybe even one day we'll be required to prevent dangerous levels of deflation. A lot of these changes are technical, such as improving scalability so transactions can remain on the blockchain, developing P2P blacklist technologies, and preventing deflation.

We can also go the other route, and give Bitcoin users even more tools to remain anonymous and transact on their own terms. Technologies like mixing and off-chain transactions to let you make transactions without revealing where the coins came from, technologies like P2Pool to ensure mining stays decentralized, and colored coins to let us trade our assets without involving third party exchanges.

I think this discussion needs to happen out in the open, and we need to have it now. I'm sure you have a pretty good idea what I think, but what does the rest of the community think?

Obviously work WITH, depending on the geographical region that is interested.

First step needed is education and there is no better explanation than:

[[

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as
trusted third parties to process electronic payments. While the system works well enough for
most transactions, it still suffers from the inherent weaknesses of the trust based model.
Completely non-reversible transactions are not really possible, since financial institutions cannot
avoid mediating disputes. The cost of mediation increases transaction costs, limiting the
minimum practical transaction size and cutting off the possibility for small casual transactions,
and there is a broader cost in the loss of ability to make non-reversible payments for non-
reversible services. With the possibility of reversal, the need for trust spreads. Merchants must
be wary of their customers, hassling them for more information than they would otherwise need.
A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties
can be avoided in person by using physical currency, but no mechanism exists to make payments
over a communications channel without a trusted party.

What is needed is an electronic payment system based on cryptographic proof instead of trust,
allowing any two willing parties to transact directly with each other without the need for a trusted
third party. Transactions that are computationally impractical to reverse would protect sellers
from fraud, and routine escrow mechanisms could easily be implemented to protect buyers. In
this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed
timestamp server to generate computational proof of the chronological order of transactions. The
system is secure as long as honest nodes collectively control more CPU power than any
cooperating group of attacker nodes.

]]

The benefits of bitcoin to society should be explained and also it is in the self interest of the given region given that bitcoin can create a competitive advantage to that region.

It goes without saying that the foundation does not speak for Satoshi, but anyone, be it an individual or group, explaining things in helpful way is always beneficial. 

[Loozik]

-Jeff Garzik

We can work with regulators to make sure Bitcoin is acceptable to them [...] There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made.

Obviously work WITH, depending on the geographical region that is interested.

Please tell me you are joking.

[melvster]

-Jeff Garzik

We can work with regulators to make sure Bitcoin is acceptable to them [...] There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made.

Obviously work WITH, depending on the geographical region that is interested.

Please tell me you are joking.

Of course not.  Have you ever met a regulator?

Most are good folks just trying to do their job against people that earn 100 or even 1000 times as much as them.

Regulators are employed by us, we can do more working together.  Namely showing the competitive advantages that bitcoin gives that country, and allowing them to have input into good ways to leverage that. 

[Loozik]

Have you ever met a regulator?

No I have not. Neither have you. There are no ''regulator'' object class on this planet.

Most are good folks just trying to do their job against people that earn 100 or even 1000 times as much as them.

What I think you should have meant is these folks are individual men and women providing their service at gun point to people who may not want that service at all.

This is how it works: if you do not pay taxes, you get a letter from people doing business as (DBA) IRS. When you ignore it, you get a letter from people DBA judges to appear in a building called a court for a trial. When you ignore a letter to appear in a court, people DBA police show up at your door. If you ignore them because you may have better stuff to do, e.g. watch TV, they will brake into your house. If you object phisically, you'll get grounded and shit will be beaten out of you, your legs and hands will be broken. Then when in jail, if you want to go out home, you will be shot dead by a guy DBA prison guard.

Tell me what are factual differences (if any) between theft under threat of killing and taxes?

Regulators are employed by us, we can do more working together.

Where did you get the idea I or you employ a regulator. Do you have any facts or evidence to prove it?

[Jace]

Tell me what are factual differences (if any) between theft under threat of killing and taxes?

The latter is legalized (ironically by the very same people who collect those taxes).

[RodeoX]

It seems to me that not working with regulators is a sure path to the most onerous regulations.

[cointoss]

Wait. All of you posters who seem to be supporting government regulation being built into Bitcoin itself should clarify what you are supporting here.

Which of these things, exactly, are you posting in support of?

For instance we can ensure that it remains possible to track the flow of money through Bitcoin.

We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data.

...

We can work with them to find ways to apply AML rules to Bitcoin transactions

...

There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made.

...

Maybe even one day we'll be required to prevent dangerous levels of deflation.

...

developing P2P blacklist technologies

[Loozik]

Tell me what are factual differences (if any) between theft under threat of killing and taxes?

The latter is legalized (ironically by the very same people who collect those taxes).

Yeah, people doing business as ''states'', ''regulators'' are merely acting like mafia that gained monopoly over legislation and justice enforcement. ''Justice'' here is a misnomer  

I do not think people providing excellent service as Bitcoin Foundation should engage in talks with mafia.

[RodeoX]

Just to be clear I in no way support changing bitcoin to include regulatory features. Following the rules should be up to the user, just like other laws.

[Loozik]

Wait. All of you posters who seem to be supporting government regulation being built into Bitcoin itself should clarify what you are supporting here.

Which of these things, exactly, are you posting in support of?

For instance we can ensure that it remains possible to track the flow of money through Bitcoin.

Maybe even one day we'll be required to prevent dangerous levels of deflation.

Okay, so we've learned deflation can be dangerous.

[melvster]

Wait. All of you posters who seem to be supporting government regulation being built into Bitcoin itself should clarify what you are supporting here.

Which of these things, exactly, are you posting in support of?

For instance we can ensure that it remains possible to track the flow of money through Bitcoin.

We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data.

...

We can work with them to find ways to apply AML rules to Bitcoin transactions

...

There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made.

...

Maybe even one day we'll be required to prevent dangerous levels of deflation.

...

developing P2P blacklist technologies

I dont think it makes too much sense to build govt regulation into bitcoin 0.8+ ... that would be a hard fork or a new coin (maybe the same thing).  Because each regulation would be different in each country.  I do think that having a conversation with regulators to explain the system is healthy and looking at the recommendations.

Arbitrary freezing of funds would make bitcoin sterile.  

I would LOVE to see cypto currency used for public good (my idea was to give 10% of mining rewards to charity) but again this should be a new coin.

Deflation / Inflation cannot be controlled centrally.  It's trivial to print new bitcoins and settle in fractions or cash, as gold does.

The illegal link in the BC argument is pretty absurd ... you can encode information by using any image gallery, or by timestamps on facebook and twitter ... to prevent the sharing of links you have to shut down the internet, and maybe even paper!

Anyone can fork btc and introduce arbitrary measures, whether anyone will use that fork is a different question.

Each country will be different.  

[Jace]

Seriously now, WTF is this thread is all about. I thought Bitcoin was created to avoid regulation and centralization in the first place.

So, NO! Of course we don't want to work with regulators. Bitcoin is unregulated by nature, let's keep it that way. For people who love regulation, stick with your euros and dollars please. Everybody happy.

[Loozik]

So, NO! Of course we don't want to work with regulators.

And you know what? - regulators didn't want to work with us (whoever ''us'' is) either. Look at the OP quotes (in bold in my post) to see what happened - this is very funny:

----------------------------------------------------------

A. One guy (from Australia) from Bitcoin Foundation says:
Hi! I would like the board to discuss opening up lines of communication with money regulators - particularly FinCEN and AUSTRAC (I'm from Australia).
Note it is not the so called regulators who seek contact with Bitcoin Foundation guys. It is the guy within Bitcoin Foundation who wants other Bitcoin Foundation guys to co-operate with the so called regulators. Funny, isn't it?

B. The Australian guy continues:
I think it would be better if some organisation like the Bitcoin Foundation could offer guidance draft rules and work with the regulators.
He just makes a pretty neutral suggestion, but pointing his finger at guys (geeks) who have no clue how to defend against bureaucrats.

C. And here comes the FUD out of the blue:
Otherwise we'll have a situation pretty soon where they try to implement something unworkable, the criminals flood into the Bitcoin system then the argument for 'shutting down bitcoin' grows in popularity.
I wonder where he gets this ''pretty soon'' idea from?

-------------------------------------------------------

D. The other guy (a developer) replies:
The Bitcoin Foundation itself is in a difficult position: we all know who it's funded by, and everyone involved is publicly known.
Clearly he caught the bait (FUD) and is sincerely afraid of decent persons involved in Bitcoin Foundation.

E. The scared developer makes concessions to requests that haven't been even made by the so called regulators, i.e.:
We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data.
...
We can work with them to find ways to apply AML rules to Bitcoin transactions
...
There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made.
...
Maybe even one day we'll be required to prevent dangerous levels of deflation.
...
developing P2P blacklist technologies

In my opinion the so called regulators, even if any meeting were to be held in the future, wouldn't even put forward such request - they have no clue what the Bitcoin system is all about.

-------------------------------------------------------

The problem is: now that this thread is open to public, the so called regulators were given numerous concessions (luckily of one man on behalf of this man only) on a silver plate + were given the info on what's possible to regulate. Bitcoin Foundation guys shoot themselves in the foot.

EDIT: Apologies to Bitcoin Foundations guys. I thought OP / retep / Peter Todd was a member of Bitcoin Foundation and spoke on your behalf while proposing going to bed with regulators. I was misleaded (my bad) by his quoting BF' private forum.

[Brushan]

I'm in no way against regulating exchanges if Bitcoin benefits from it. But i really hope that if the Bitcoin Foundation ever makes a suggestion of changing the protocol to make Bitcoin easier regulated that we protest so loudly that they would never dare to make a suggestion like that again. And if they do make a suggestion like that then it's clear that they have sold out to the same people that Bitcoin was designed to fight.

[cypherdoc]

So, NO! Of course we don't want to work with regulators.

And you know what? - regulators didn't want to work with us (whoever ''us'' is) either. Look at the OP quotes (in bold in my post) to see what happened - this is very funny:

----------------------------------------------------------

A. One guy (from Australia) from Bitcoin Foundation says:
Hi! I would like the board to discuss opening up lines of communication with money regulators - particularly FinCEN and AUSTRAC (I'm from Australia).
Note it is not the so called regulators who seek contact with Bitcoin Foundation guys. It is the guy within Bitcoin Foundation who wants other Bitcoin Foundation guys to co-operate with the so called regulators. Funny, isn't it?

B. The Australian guy continues:
I think it would be better if some organisation like the Bitcoin Foundation could offer guidance draft rules and work with the regulators.
He just makes a pretty neutral suggestion, but pointing his finger at guys (geeks) who have no clue how to defend against bureaucrats.

C. And here comes the FUD out of the blue:
Otherwise we'll have a situation pretty soon where they try to implement something unworkable, the criminals flood into the Bitcoin system then the argument for 'shutting down bitcoin' grows in popularity.
I wonder where he gets this ''pretty soon'' idea from?

-------------------------------------------------------

D. The other guy (a developer) replies:
The Bitcoin Foundation itself is in a difficult position: we all know who it's funded by, and everyone involved is publicly known.
Clearly he caught the bait (FUD) and is sincerely afraid of decent persons involved in Bitcoin Foundation.

E. The scared developer makes concessions to requests that haven't been even made by the so called regulators, i.e.:
We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data.
...
We can work with them to find ways to apply AML rules to Bitcoin transactions
...
There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made.
...
Maybe even one day we'll be required to prevent dangerous levels of deflation.
...
developing P2P blacklist technologies

In my opinion the so called regulators, even if any meeting were to be held in the future, wouldn't even put forward such request - they have no clue what the Bitcoin system is all about.

-------------------------------------------------------

The problem is: now that this thread is open to public, the so called regulators were given numerous concessions (luckily of one man on behalf of this man only) on a silver plate + were given the info on what's possible to regulate. Bitcoin Foundation guys shoot themselves in the foot.

please list the identities of the bolded quotes.

[Stampbit]

Deregulation! We need bitcoin derivatives traded on secret dark markets by major institutions who are simultaneously manipulating variables to really set this volatility swing in full motion!

[tvbcof]

Deregulation! We need bitcoin derivatives traded on secret dark markets by major institutions who are simultaneously manipulating variables to really set this volatility swing in full motion!

We already have that in spades I believe.

[Loozik]

please list the identities of the bolded quotes.

OP should do this. He has more information I think.

[edmundedgar]

please list the identities of the bolded quotes.

OP should do this. He has more information I think.

Retep will correct me if I'm reading him wrong, but if I'm understanding the original post correctly the stuff that cypherdoc has phrased from "E. The scared developer makes concessions to requests that haven't been even made by the so called regulators..." wasn't a report of an actual conversation, it was something that the OP pulled out of his arse.

One of the various slights of hand in the original post was the way it plays with "work with", which starts out with an alleged actual conversation where it means "talk to them like the Tor people do to try to persuade them not to regulate us" and then, after various twists and turns of the OP's imagination, ends up meaning, "voluntarily break our software if somebody powerful thinks it might help them".

[Peter Todd]

Retep will correct me if I'm reading him wrong, but if I'm understanding the original post correctly the stuff that cypherdoc has phrased from "E. The scared developer makes concessions to requests that haven't been even made by the so called regulators..." wasn't a report of an actual conversation, it was something that the OP pulled out of his arse.

One of the various slights of hand in the original post was the way it plays with "work with", which starts out with an alleged actual conversation where it means "talk to them like the Tor people do to try to persuade them not to regulate us" and then, after various twists and turns of the OP's imagination, ends up meaning, "voluntarily break our software if somebody powerful thinks it might help them".

Yeah, you lot are hilarious. The only thing that's an actual conversation is what's quoted in my original post. You might want to re-read it to remind yourself.

I'm surprised you people haven't figured out that I 100% think the right approach is to do everything we can to ensure that at a technical level Bitcoin can't be regulated.

Don't they teach rhetoric in highschool anymore? Arguing your opponents position to show how wrong they are is a pretty basic technique.

[tvbcof]

...
Don't they teach rhetoric in highschool anymore? Arguing your opponents position to show how wrong they are is a pretty basic technique.

Such a thing is vastly to nuanced for a fair fraction of this board.  Trust me.

[Peter Todd]

...
Don't they teach rhetoric in highschool anymore? Arguing your opponents position to show how wrong they are is a pretty basic technique.

Such a thing is vastly to nuanced for a fair fraction of this board.  Trust me.

Indeed.

Friday night beer googles are the only reason I'm even looking at this thread.

[Loozik]

Retep will correct me if I'm reading him wrong, but if I'm understanding the original post correctly the stuff that cypherdoc has phrased from "E. The scared developer makes concessions to requests that haven't been even made by the so called regulators..." wasn't a report of an actual conversation, it was something that the OP pulled out of his arse.

The sentence "E. The scared developer makes concessions to requests that haven't been even made by the so called regulators..." was produced by me - it is a subtitle I gave to the conversation reported by OP. OP had nothing to do with it. Please reread my post.

[edmundedgar]

Retep will correct me if I'm reading him wrong, but if I'm understanding the original post correctly the stuff that cypherdoc has phrased from "E. The scared developer makes concessions to requests that haven't been even made by the so called regulators..." wasn't a report of an actual conversation, it was something that the OP pulled out of his arse.

The sentence "E. The scared developer makes concessions to requests that haven't been even made by the so called regulators..." was produced by me - it is a subtitle I gave to the conversation reported by OP. OP had nothing to do with it. Please reread my post.

That's what I mean, the stuff in bold that comes after that sentence.

[Loozik]

Retep will correct me if I'm reading him wrong, but if I'm understanding the original post correctly the stuff that cypherdoc has phrased from "E. The scared developer makes concessions to requests that haven't been even made by the so called regulators..." wasn't a report of an actual conversation, it was something that the OP pulled out of his arse.

The sentence "E. The scared developer makes concessions to requests that haven't been even made by the so called regulators..." was produced by me - it is a subtitle I gave to the conversation reported by OP. OP had nothing to do with it. Please reread my post.

That's what I mean, the stuff in bold that comes after that sentence.

So how could OP pull a sentence out of his arse, if the sentence wasn't his?

[woodrowchai]

I hate regulation,so I love bitcoin.
If bitcoin will be regualted,I don't know what rest I can love.

[edmundedgar]

Retep will correct me if I'm reading him wrong, but if I'm understanding the original post correctly the stuff that cypherdoc has phrased from "E. The scared developer makes concessions to requests that haven't been even made by the so called regulators..." wasn't a report of an actual conversation, it was something that the OP pulled out of his arse.

The sentence "E. The scared developer makes concessions to requests that haven't been even made by the so called regulators..." was produced by me - it is a subtitle I gave to the conversation reported by OP. OP had nothing to do with it. Please reread my post.

That's what I mean, the stuff in bold that comes after that sentence.

So how could OP pull a sentence out of his arse, if the sentence wasn't his?

I'm talking about the stuff in bold after that sentence:

We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data.
...
We can work with them to find ways to apply AML rules to Bitcoin transactions
...
There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made.
...
Maybe even one day we'll be required to prevent dangerous levels of deflation.
...
developing P2P blacklist technologies

...which comes from the OP. (Sorry, it would have been clearer if I'd just quoted the stuff I was talking about...)

[jdbtracker]

unregulated please... defeats the purpose of the market if it is regulated, just make them keep an eye on it, learn from it, and if they got something to say they better have a damn good argument.

and no taxation for sure, if they want taxes they better start taxing businesses directly, if the businesses in their territory are well supported by the state, they have nothing to worry about, they'll get their taxes.

and if people are putting kiddy porn on the blockchain... I'm sure the developers or the community here can come up with a solution to save the blockchain... it's already at 8.5 gigs!

[Loozik]

...which comes from the OP. (Sorry, it would have been clearer if I'd just quoted the stuff I was talking about...)

Actually, you are right, OP seems to have pulled this out of his arse. I thought (and others probably thought too) he was quoting someone from Bitcoin Foundation.

I made a moron of myself.

[Welsh]

I'm leaning towards anti, I think this is just a rumour which has occurred.
Maybe, the government tried to scare bitcoin users, thinking only the rich can get involved in the currency.
I'm not sure, I just don't know how they would control bitcoin, they are only interested in FIAT currencies.

[edmundedgar]

...which comes from the OP. (Sorry, it would have been clearer if I'd just quoted the stuff I was talking about...)

Actually, you are right, OP seems to have pulled this out of his arse. I thought (and others probably thought too) he was quoting someone from Bitcoin Foundation.

I made a moron of myself.

Not at all, you were supposed to think that. It's a classic rhetorical tactic from the political bullshitting textbook. Politicians use it all the time, because it works so reliably - people will naturally assume that the things you say are connected.

So you start with something an opponent actually said ("Maybe we should do what the Tor guys are doing and explain to regulators why they shouldn't try to regulate us"), set up a false opposition ("work with" vs "be unregulated"), then plonk a bunch of strawmen on the opponent's side of the divide (AML! Tax! Censorship!) and people will assume that your opponent is advocating the strawman stuff too, without you needing to specifically say so. Then having scared people about their enemy's dastardly plot you throw in the stuff you want to do (Throttle the network at 7 transactions per second!) and make it look like it's an essential part of defeating your opponent's evil agenda.

[Loozik]

It's a classic rhetorical tactic from the political bullshitting textbook.

Yes, OP should consider career in politics.

[solex]

...which comes from the OP. (Sorry, it would have been clearer if I'd just quoted the stuff I was talking about...)

Actually, you are right, OP seems to have pulled this out of his arse. I thought (and others probably thought too) he was quoting someone from Bitcoin Foundation.

I made a moron of myself.

Not at all, you were supposed to think that. It's a classic rhetorical tactic from the political bullshitting textbook. Politicians use it all the time, because it works so reliably - people will naturally assume that the things you say are connected.

So you start with something an opponent actually said ("Maybe we should do what the Tor guys are doing and explain to regulators why they shouldn't try to regulate us"), set up a false opposition ("work with" vs "be unregulated"), then plonk a bunch of strawmen on the opponent's side of the divide (AML! Tax! Censorship!) and people will assume that your opponent is advocating the strawman stuff too, without you needing to specifically say so. Then having scared people about their enemy's dastardly plot you throw in the stuff you want to do (Throttle the network at 7 transactions per second!) and make it look like it's an essential part of defeating your opponent's evil agenda.

EE. That's a very impressive deconstruction!

[Swapster]

I am for zero regulation in the Bitcoin space, let the free market reign. Of course, there is nothing we can do about regulating the conversion of Bitcoin to Fiat (you have now exited the Bitcoin space once you convert to cash), and nobody should be surprised by that.

So I would like to see some reasonable regulation in the exchange space. Right now, it's not well defined and it seems to be a bit heavy handed with all the reporting requirements, surety bonding in all states, etc.

[Eri]

We can work with regulators to make sure Bitcoin is acceptable to them. For instance we can ensure that it remains possible to track the flow of money through Bitcoin. We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data. We can work with them to find ways to apply AML rules to Bitcoin transactions and to the exchanges. There are ways to put taxation into Bitcoin itself, so that taxes are automatically applied when a transaction is made. Maybe even one day we'll be required to prevent dangerous levels of deflation. A lot of these changes are technical, such as improving scalability so transactions can remain on the blockchain, developing P2P blacklist technologies, and preventing deflation.

If Bitcoin heads in this direction, surely there will be a hard fork.  The whole point of Bitcoin for a lot of users is to have a currency that functions independently of the world's most heinous criminals--the bankers and politicians--and makes their destructive, self-serving policies/regulations/legislation irrelevant.  Each of us should be free to transact in whatever currency has the features and characteristics that we want and individually choose.  Similar to religion (in the USA at least), a currency should not be imposed on us.  It's obvious there isn't going to be a one-size-fits-all cryptocurrency as we move forward.

We can also go the other route, and give Bitcoin users even more tools to remain anonymous and transact on their own terms. Technologies like mixing and off-chain transactions to let you make transactions without revealing where the coins came from, technologies like P2Pool to ensure mining stays decentralized, and colored coins to let us trade our assets without involving third party exchanges.

We can go both routes.  It's as simple as a hard fork.

Didnt read this whole thread so not sure if this has been said already. But the idea of taking both routes could be vary beneficial depending how regulated the gov't wants it. There is no reason why the foundation cant make a "regulated" bitcoin client and secretly in the back room on a Tor server work on a 2nd shadow client, one which ignores those rules. End result would be, The foundation does what the gov't wants but at the same time we do what we want. if at any point the clients become incompatible, they only need to say "well, we did our best gov't, everyone is ignoring our official client now". they can all publicly quit but keep working on the shadow client (the real client) same as always. Legally they wouldnt be responsible, though we would have legal battles for bitcoins future at that point.

I guess the question becomes, can you legally ban a technology that isnt illegal, simply because its users choose to use it for that? Think Torrents, they are perfectly legal, but some people upload illegal/copyrighted content.

[franky1]

the simple path.. allow the banks /governements to regulate the bank account holders of FIAT. which includes liberty reserve and other FIAT handling exchanges that are within bitcoin community(as the FIAT has to sit in an account somewhere)

but to leave pure bitcoin users alone.

fincen only control US dollar. they do not control EURO, australian, japanese, UK FIAT.. so dont even give them the opportunity to control bitcoin

[RodeoX]

I hope everyone realizes that regulation WILL happen, and it is NOT your choice. It will be regulated by countries all over the world and subject to international laws on trade.
This is not a "choice". It is and will remain law, whether one works with regulators or not. 
I suppose if you think tax evasion is a way to avoid cooperating then you could do that, of course you may go to jail.

[coinedBit]

guys, let's stop talking, you won't affect the foundation by posting on the forums - just start an online petition and spread the word through mailing lists, forums and social media - and I can assure you that the btc foundation will get very clear feedback.

http://www.ipetitions.com/start-petition

[RodeoX]

We will see what shakes out, but most of what I have heard is about regulating US Dollars, not bitcoin. It is regulating the sale of bitcoins for dollars. I don't understand the position of speculators who want to trade BTC back and forth for dollars and not pay tax or be subject to regulation. If you want to use dollars you are choosing to use their money and must play by their rules. Just stick to bitcoins and free yourself from that nonsense. Cut the cord.

[Bogdan]

I would not like to work with regulators because that means verifications, taxes, general disability when using BTC. Bitcoin is decentralised and can't be regulated. The governments can attack the big exchangers but they can't stop every individual using bitcoin.

[Operatr]

I would not like to work with regulators because that means verifications, taxes, general disability when using BTC. Bitcoin is decentralised and can't be regulated. The governments can attack the big exchangers but they can't stop every individual using bitcoin.

It is just like BitTorrent. The governments can do absolutely nothing to stop the system or the idea, they can only go after users at entities at the fringe.

[atomium]

this is a very touchy subject and in all honestly the US is going to step in somehow whether we like it or not and try to form some type of regulation with it, of course those outside the US don't have to follow the rules but those in the US will have to adhere by them.

my only request is that they are able to work with bitcoin and its innovation and not find a way to regulate it so bad that it will force us to stop using it.

[franky1]

this is a very touchy subject and in all honestly the US is going to step in somehow whether we like it or not and try to form some type of regulation with it, of course those outside the US don't have to follow the rules but those in the US will have to adhere by them.

my only request is that they are able to work with bitcoin and its innovation and not find a way to regulate it so bad that it will force us to stop using it.

is smells like you have not read the reports or know what fincen actually is...

try researching them..

they only care about FIAT and can only control the flow of FIAT in BANK ACCOUNTS. the whole 'virtual currency' term is about the digital dollar on computer screens/database tables of liberty exchange, bitstamp etc which represents / is a "convertable virtual currency" of the actual dollar in their bank account. nothing to do with bitcoin balances of those companies or of blockchain.info, bitcoin-qt, armory, etc, etc.

the sooner people get their head out the sand that fincen/FSA etc can only control the FIAT. and not scare monger about bitcoin dying.. the sooner the people can create legitimate fiat exchange platforms.

I would not like to work with regulators because that means verifications, taxes, general disability when using BTC. Bitcoin is decentralised and can't be regulated. The governments can attack the big exchangers but they can't stop every individual using bitcoin.

the government only tax FIAT you have, so it will only affect bitcoins when you put it into fiat. just like the last 100+ years. if you buy a piece of artwork they dont request 20% of the painting to be ripped from its frame as tax.. they wait for you to sell it. and then tax you on the FIAT

[atomium]

this is a very touchy subject and in all honestly the US is going to step in somehow whether we like it or not and try to form some type of regulation with it, of course those outside the US don't have to follow the rules but those in the US will have to adhere by them.

my only request is that they are able to work with bitcoin and its innovation and not find a way to regulate it so bad that it will force us to stop using it.

is smells like you have not read the reports or know what fincen actually is...

try researching them..

they only care about FIAT and can only control the flow of FIAT in BANK ACCOUNTS. the whole 'virtual currency' term is about the digital dollar on computer screens/database tables of liberty exchange, bitstamp etc which represents / is a "convertable virtual currency" of the actual dollar in their bank account. nothing to do with bitcoin balances of those companies or of blockchain.info, bitcoin-qt, armory, etc, etc.

the sooner people get their head out the sand that fincen/FSA etc can only control the FIAT. and not scare monger about bitcoin dying.. the sooner the people can create legitimate fiat exchange platforms.

I would not like to work with regulators because that means verifications, taxes, general disability when using BTC. Bitcoin is decentralised and can't be regulated. The governments can attack the big exchangers but they can't stop every individual using bitcoin.

the government only tax FIAT you have, so it will only affect bitcoins when you put it into fiat. just like the last 100+ years. if you buy a piece of artwork they dont request 20% of the painting to be ripped from its frame as tax.. they wait for you to sell it. and then tax you on the FIAT

You are totally right about that, thanks for that explanation. Now another question is what happens if you get audited, would they ever ask to see your bitcoin wallet to look for transactions, etc. what do you think about this?

[franky1]

You are totally right about that, thanks for that explanation. Now another question is what happens if you get audited, would they ever ask to see your bitcoin wallet to look for transactions, etc. what do you think about this?

each country is different. in the UK bitcoins are being treated like assets.
EG pieces of artwork, (personal possessions with a store of value), your car.

lets say you won the olympics. you received a gold medal worth $2000 of gold. until you sold that medal, you dont pay tax on holding the medal. same as a painting etc.

check with your tax office. they are not there to whip you at every turn, they are always approachable and can explain things. most tax accountants even give away a free first hour consultation.. so abuse that too.. get a list of 5 local tax accountants. go to each, ask your questions and when the time is up, go to the next accountant.

[atomium]

got it, yea I see your points, makes sense.

I will do that, getting advice from the tax accountants would be the best way to get this setup. I like that first hour free idea haha

[coinedBit]

http://www.fastcolabs.com/3007320/tracking/bitcoin-coming-browser-near-you

[marcus_of_augustus]

I think people have got the power flow inverted in their minds ... power flows from the people ...

The correct question is "Do the regulators want to work with Bitcoin .... ?"

So far, it seems not.

[tkbx]

Unregulated. That's what's nice about open source. Regulation --> Fork --> Unregulation

[Bogdan]

If it becomes regulated many will move onto another coin.

[rovchris]

I thought the ethos of Bitcoin that it is detached from central banks and governments. Bitcoin was born out of the mayhem of 2008 caused by so called regulated FIAT currencies, and people here are suggesting that we should let them regulate bitcoins. Ill tell you what don't use them - use dollars or any other shite FIAT currency if you want to be regulated.

Did regulations protect anyone from that credit crisis? Millions of innocent people were robbed of their pensions, savings and jobs due to the actions of a few. Bitcoin was created to address this imbalance.

FIAT currencies only represent DEBT if all world debts were cleared there would be NO MONEY in circulation.

Why do you think there is inflation - to force you to store your money in a bank as the interest you receive offsets the loss through inflation. With deflation the opposite is true you do not need banks as your money would increase in value as time passes. If there were no banks there would be NO LOANS and therefore everything would be at a realistic price (Housing for example). The banks feed themselves please see them for what they are exploiters of the worst kind and the most vial and corrupt organisations this planet has ever seen.

Bitcoin is a weapon against the State - please understand this. What it will do is force governments to stop wasting unquantifiable sums and fighting illegal wars as they can not  "steal" your money at the source. They will have to offer value and services people actually want and are prepared to pay for without the threat of imprisonment just as any other business - in essence that is all they are.

People are going about this the wrong way - instead of trying to have a mechanism to exchange your bitcoins for DEBT (Fiat currencies) we should be pushing to remove FIAT from the whole procurement life cycle.

If you could buy food, clothes and other essentials with bitcoins it would nullify FIAT currencies. By exchanging Bitcoins for FIAT you are just strengthening FIAT currencies.

At the end of the day regulation of any kind will destroy Bitcoins - more than likely by poorly executed legislation implemented by cretins.

In the UK they can not even get large companies to pay TAX but the little man is fully exploited - at a basic rate including NI contributions the level of tax is 45% - Do you honestly believe that that is good value? That is regulation working for you right there.

This is why any regulation of any kind should be fought vigorously - if big business wants to join the party and play - it is by our rules and not theirs. Any concession would mean that the idea of bitcoins dies with it.

There is an opportunity here for each and every single one of you to build your own empire unhampered by Governments and regulation. If you want to open a business you can at this very moment, no pleading with the bank for merchant status or credit checks and all the other hoops they make you pay to jump through. They have no right to do that but we have been so brow beaten it is the norm.

Bitcoins were a stroke of genius enabling the common man to take control of his destiny and the creation of money.

Before people start saying - no one would pay taxes - you pay for food, you pay for clothes you would pay for state services if they represented any value - but they don't - for every £1 given to them only 30p actually is spent on the service the rest is just waste.
 

[Chaoskampf]

We shouldn't be submitting to regulations that don't apply to this new system. Bitcoin is not money. Bitcoin is memory. Those that seek to regulate it are applying old paradigms to one that is subtle yet truly revolutionary.

https://bitcointalk.org/index.php?topic=234731.0

[ErisDiscordia]

I thought the ethos of Bitcoin that it is detached from central banks and governments. Bitcoin was born out of the mayhem of 2008 caused by so called regulated FIAT currencies, and people here are suggesting that we should let them regulate bitcoins. Ill tell you what don't use them - use dollars or any other shite FIAT currency if you want to be regulated.

Did regulations protect anyone from that credit crisis? Millions of innocent people were robbed of their pensions, savings and jobs due to the actions of a few. Bitcoin was created to address this imbalance.

FIAT currencies only represent DEBT if all world debts were cleared there would be NO MONEY in circulation.

Why do you think there is inflation - to force you to store your money in a bank as the interest you receive offsets the loss through inflation. With deflation the opposite is true you do not need banks as your money would increase in value as time passes. If there were no banks there would be NO LOANS and therefore everything would be at a realistic price (Housing for example). The banks feed themselves please see them for what they are exploiters of the worst kind and the most vial and corrupt organisations this planet has ever seen.

Bitcoin is a weapon against the State - please understand this. What it will do is force governments to stop wasting unquantifiable sums and fighting illegal wars as they can not  "steal" your money at the source. They will have to offer value and services people actually want and are prepared to pay for without the threat of imprisonment just as any other business - in essence that is all they are.

People are going about this the wrong way - instead of trying to have a mechanism to exchange your bitcoins for DEBT (Fiat currencies) we should be pushing to remove FIAT from the whole procurement life cycle.

If you could buy food, clothes and other essentials with bitcoins it would nullify FIAT currencies. By exchanging Bitcoins for FIAT you are just strengthening FIAT currencies.

At the end of the day regulation of any kind will destroy Bitcoins - more than likely by poorly executed legislation implemented by cretins.

In the UK they can not even get large companies to pay TAX but the little man is fully exploited - at a basic rate including NI contributions the level of tax is 45% - Do you honestly believe that that is good value? That is regulation working for you right there.

This is why any regulation of any kind should be fought vigorously - if big business wants to join the party and play - it is by our rules and not theirs. Any concession would mean that the idea of bitcoins dies with it.

There is an opportunity here for each and every single one of you to build your own empire unhampered by Governments and regulation. If you want to open a business you can at this very moment, no pleading with the bank for merchant status or credit checks and all the other hoops they make you pay to jump through. They have no right to do that but we have been so brow beaten it is the norm.

Bitcoins were a stroke of genius enabling the common man to take control of his destiny and the creation of money.

Before people start saying - no one would pay taxes - you pay for food, you pay for clothes you would pay for state services if they represented any value - but they don't - for every £1 given to them only 30p actually is spent on the service the rest is just waste.
 

I'll just quote this and tip my hat to you, sir.

[coinedBit]

From a government/authorities standpoint there are worse things that could happen crypto-currency wise, bitcoin is only just the very first manifestation of an established and working cryptocurrency with a sizable following and capitalization, but most people are fully aware of its shortcomings and weaknesses - and in fact working on improved implementations that could have a much bigger impact on globalization and adoption by black markets. With bitcoin, there's at least a public bitchoin to trace and validate transactions in a p2p network.

[QuestionAuthority]

I thought the ethos of Bitcoin that it is detached from central banks and governments. Bitcoin was born out of the mayhem of 2008 caused by so called regulated FIAT currencies, and people here are suggesting that we should let them regulate bitcoins. Ill tell you what don't use them - use dollars or any other shite FIAT currency if you want to be regulated.

Did regulations protect anyone from that credit crisis? Millions of innocent people were robbed of their pensions, savings and jobs due to the actions of a few. Bitcoin was created to address this imbalance.

FIAT currencies only represent DEBT if all world debts were cleared there would be NO MONEY in circulation.

Why do you think there is inflation - to force you to store your money in a bank as the interest you receive offsets the loss through inflation. With deflation the opposite is true you do not need banks as your money would increase in value as time passes. If there were no banks there would be NO LOANS and therefore everything would be at a realistic price (Housing for example). The banks feed themselves please see them for what they are exploiters of the worst kind and the most vial and corrupt organisations this planet has ever seen.

Bitcoin is a weapon against the State - please understand this. What it will do is force governments to stop wasting unquantifiable sums and fighting illegal wars as they can not  "steal" your money at the source. They will have to offer value and services people actually want and are prepared to pay for without the threat of imprisonment just as any other business - in essence that is all they are.

People are going about this the wrong way - instead of trying to have a mechanism to exchange your bitcoins for DEBT (Fiat currencies) we should be pushing to remove FIAT from the whole procurement life cycle.

If you could buy food, clothes and other essentials with bitcoins it would nullify FIAT currencies. By exchanging Bitcoins for FIAT you are just strengthening FIAT currencies.

At the end of the day regulation of any kind will destroy Bitcoins - more than likely by poorly executed legislation implemented by cretins.

In the UK they can not even get large companies to pay TAX but the little man is fully exploited - at a basic rate including NI contributions the level of tax is 45% - Do you honestly believe that that is good value? That is regulation working for you right there.

This is why any regulation of any kind should be fought vigorously - if big business wants to join the party and play - it is by our rules and not theirs. Any concession would mean that the idea of bitcoins dies with it.

There is an opportunity here for each and every single one of you to build your own empire unhampered by Governments and regulation. If you want to open a business you can at this very moment, no pleading with the bank for merchant status or credit checks and all the other hoops they make you pay to jump through. They have no right to do that but we have been so brow beaten it is the norm.

Bitcoins were a stroke of genius enabling the common man to take control of his destiny and the creation of money.

Before people start saying - no one would pay taxes - you pay for food, you pay for clothes you would pay for state services if they represented any value - but they don't - for every £1 given to them only 30p actually is spent on the service the rest is just waste.

This is a nicely packaged argument. I agree with your view on government corruption. It's the same worldwide. The only thing that changes is the depth and method of corruption. The only problem I have with it is the idea that Bitcoin can act as a replacement currency. Replace the word Bitcoin above with gold and you'll see what I mean. Anything used for trade outside of a government fiat system becomes commodity money. Fiat has no value without government backing. Commodities are plagued with huge fluctuations in price. Buying a loaf of bread would become impossible because at any moment you could either be paying as much as that loaf should cost, as much as a slice should cost or as much as ten bushels of wheat should cost. In order for your commodity system to work Bitcoin would need to be portable, fungible, highly divisible, durable and scarce. Gold has all of these qualities and is already recognized for its intrinsic value - Bitcoin is not. Now substitute the word rock for Bitcoin above. It doesn't make that much sense anymore. Bitcoins to most people today are about as valuable as rocks. Fiat used to be backed by gold because gold was a recognized means of exchange. People were slowly weaned off of gold and on to inflated government backed fiat slowly over decades because the stability and control provided by the government allowed it. Bitcoin can't do this without forming its own government and then Bitcoin would just become fiat. Fiat can get its value because it's backed by a commodity or by a common agreement that it has value. Fiat is a government decree that the paper has value. Bitcoin currently gets its value from the ability to exchange with fiat. Your idea is a generation or two ahead of being workable.

[CasinoBit]

It has always seemed to be some kind of backward logic to me, if your company isn't making enough profit you should be removing ads from your website, not adding them, if your governments treasury is getting empty you should be decreasing taxes not increasing them and in the same way if terrorism is becoming widespread you should be promoting liberty, not enslaving people.

Now imagine a country going through a decade of this psychopathic behavior, wouldn't you enroll to defend your country from the foreign invaders?

[QuestionAuthority]

It has always seemed to be some kind of backward logic to me, if your company isn't making enough profit you should be removing ads from your website, not adding them, if your governments treasury is getting empty you should be decreasing taxes not increasing them and in the same way if terrorism is becoming widespread you should be promoting liberty, not enslaving people.

Now imagine a country going through a decade of this psychopathic behavior, wouldn't you enroll to defend your country from the foreign invaders?

Yep!

[johnyj]

If one country regulate it, users just move their servers to another country. Bitcoin can be mortgaged for a loan in USD, and you get tax reduction for the loan interest  

[franky1]

having "hopefully" quashed any rumours of bitcoin being regulated, by using the facts of the finacial reports which show they can only control the FIAT gates into bitcoin..

the best thing to do now is:

People are going about this the wrong way - instead of trying to have a mechanism to exchange your bitcoins for DEBT (Fiat currencies) we should be pushing to remove FIAT from the whole procurement life cycle.

If you could buy food, clothes and other essentials with bitcoins it would nullify FIAT currencies. By exchanging Bitcoins for FIAT you are just strengthening FIAT currencies.

We cannot do anything about the FIAT exchange regulations.. after all FIAT is government property and so you got to play by their rules. but by finding less and less reasons to require FIAT. the less reliant on regulations bitcoin needs to be.

so in the future i see a couple fully licenced FIAT/BITCOIN exchanges for each country. and then a mass of businesses that never touch fiat.

remember guys bitcoin is OUR COUNTRY. we are all the president, we are all the congress, we are all the MP's and other political bodies that go into bitcoin. Other countries do not own bitcoin, so they cannot control it. so stop worrying about other countries regulating bitcoin. all they can do is regulate their own FIAT.

[cypherdoc]

If one country regulate it, users just move their servers to another country. Bitcoin can be mortgaged for a loan in USD, and you get tax reduction for the loan interest  

Isn't that a speculative attack?

[rovchris]

This is a nicely packaged argument. I agree with your view on government corruption. It's the same worldwide. The only thing that changes is the depth and method of corruption. The only problem I have with it is the idea that Bitcoin can act as a replacement currency. Replace the word Bitcoin above with gold and you'll see what I mean. Anything used for trade outside of a government fiat system becomes commodity money. Fiat has no value without government backing. Commodities are plagued with huge fluctuations in price. Buying a loaf of bread would become impossible because at any moment you could either be paying as much as that loaf should cost, as much as a slice should cost or as much as ten bushels of wheat should cost. In order for your commodity system to work Bitcoin would need to be portable, fungible, highly divisible, durable and scarce. Gold has all of these qualities and is already recognized for its intrinsic value - Bitcoin is not. Now substitute the word rock for Bitcoin above. It doesn't make that much sense anymore. Bitcoins to most people today are about as valuable as rocks. Fiat used to be backed by gold because gold was a recognized means of exchange. People were slowly weaned off of gold and on to inflated government backed fiat slowly over decades because the stability and control provided by the government allowed it. Bitcoin can't do this without forming its own government and then Bitcoin would just become fiat. Fiat can get its value because it's backed by a commodity or by a common agreement that it has value. Fiat is a government decree that the paper has value. Bitcoin currently gets its value from the ability to exchange with fiat. Your idea is a generation or two ahead of being workable.

Interesting point there sir.  In reality though commodities always have the same value - 1kg of Gold is 1kg of gold. What changes is the value of the FIAT currency and that is why you perceive Gold as fluctuating in price - its not - its the FIAT currency fluctuating.

[Schrankwand]

If you could buy food, clothes and other essentials with bitcoins it would nullify FIAT currencies. By exchanging Bitcoins for FIAT you are just strengthening FIAT currencies.

And business taking BTC will still have to file their taxes in Fiat, which means, it is still bound to Fiat. The exchanges provide the means for companies to take BTC in the first place.

[rovchris]

If you could buy food, clothes and other essentials with bitcoins it would nullify FIAT currencies. By exchanging Bitcoins for FIAT you are just strengthening FIAT currencies.

And business taking BTC will still have to file their taxes in Fiat, which means, it is still bound to Fiat. The exchanges provide the means for companies to take BTC in the first place.

Would you have to file your taxes in FIAT though? How could you do that considering the BTC USD price fluctuates. At every point of sale you would have to know the exact conversion rate.

You only have to declare what you took in FIAT or when you liquidate your BTC. If you do not liquidate you can not be taxed.

If I walk into a shop and I trade a painting that I created for some goods - how can you declare that? The value is in the eye of the beholder.

[Schrankwand]

If you could buy food, clothes and other essentials with bitcoins it would nullify FIAT currencies. By exchanging Bitcoins for FIAT you are just strengthening FIAT currencies.

And business taking BTC will still have to file their taxes in Fiat, which means, it is still bound to Fiat. The exchanges provide the means for companies to take BTC in the first place.

Would you have to file your taxes in FIAT though? How could you do that considering the BTC USD price fluctuates. At every point of sale you would have to know the exact conversion rate.

You only have to declare what you took in FIAT or when you liquidate your BTC. If you do not liquidate you can not be taxed.

If I walk into a shop and I trade a painting that I created for some goods - how can you declare that? The value is in the eye of the beholder.

Like basically every other trade? The painting has some value, maybe your goods have some value. If this is small, nobody will care. In BTC, it is easy. There are daily lists, you get electronic receipts of sale on most places and every transaction can be looked up in the blockchain.

Basically, in the exchange society, the value of the painting has been created by the trade against goods and therefore the value of the painting is the value of the goods you just traded it for. The difference with a currency is simply putting a universal good against all other goods to indicate a more universal value.

[rovchris]

If you could buy food, clothes and other essentials with bitcoins it would nullify FIAT currencies. By exchanging Bitcoins for FIAT you are just strengthening FIAT currencies.

And business taking BTC will still have to file their taxes in Fiat, which means, it is still bound to Fiat. The exchanges provide the means for companies to take BTC in the first place.

Would you have to file your taxes in FIAT though? How could you do that considering the BTC USD price fluctuates. At every point of sale you would have to know the exact conversion rate.

You only have to declare what you took in FIAT or when you liquidate your BTC. If you do not liquidate you can not be taxed.

If I walk into a shop and I trade a painting that I created for some goods - how can you declare that? The value is in the eye of the beholder.

Like basically every other trade? The painting has some value, maybe your goods have some value. If this is small, nobody will care. In BTC, it is easy. There are daily lists, you get electronic receipts of sale on most places and every transaction can be looked up in the blockchain.

Basically, in the exchange society, the value of the painting has been created by the trade against goods and therefore the value of the painting is the value of the goods you just traded it for. The difference with a currency is simply putting a universal good against all other goods to indicate a more universal value.

You completely miss the point - only FIAT currencies can be taxed.

[aigeezer]

You completely miss the point - only FIAT currencies can be taxed.

Both the US and Canadian governments have recently gone out of their way to "clarify" that they require taxes to be paid on all bartered goods. Presumably that is ridiculously unenforceable, but they have staked out the turf nonetheless.

[rovchris]

You completely miss the point - only FIAT currencies can be taxed.

Both the US and Canadian governments have recently gone out of their way to "clarify" that they require taxes to be paid on all bartered goods. Presumably that is ridiculously unenforceable, but they have staked out the turf nonetheless.

Exactly that - they can pass as much legislation as they want but if they can not enforce it then it is irrelevant. This just sums up nicely how far out of touch State legislators are - they have no understanding of the real world.

[Schrankwand]

You completely miss the point - only FIAT currencies can be taxed.

Both the US and Canadian governments have recently gone out of their way to "clarify" that they require taxes to be paid on all bartered goods. Presumably that is ridiculously unenforceable, but they have staked out the turf nonetheless.

Exactly that - they can pass as much legislation as they want but if they can not enforce it then it is irrelevant. This just sums up nicely how far out of touch State legislators are - they have no understanding of the real world.

hahahaa.

You see, they CAN. They just create a value, write off the tax and then send you a bill. You cannot pay, you are being taken to court. You cannot pay up then, you go to jail and create interest. It just ruins your life.

You can pay but don't want to? Ah, they will just take it. Pressuring your bank, getting any other enforcement division to get into your house, blacklist accounts... all this funny stuff.

[aigeezer]

You completely miss the point - only FIAT currencies can be taxed.

Both the US and Canadian governments have recently gone out of their way to "clarify" that they require taxes to be paid on all bartered goods. Presumably that is ridiculously unenforceable, but they have staked out the turf nonetheless.

Exactly that - they can pass as much legislation as they want but if they can not enforce it then it is irrelevant. This just sums up nicely how far out of touch State legislators are - they have no understanding of the real world.

It's hard to know the extent to which most legislators are "out of touch" - their apparent stupidity always seems to work out in their favor (see link).

The irrelevant laws still give the State the ability to criminalize any target at will. I see the "seizure" of the Mt. Gox Dwolla accounts in this light. Others say that Gox should have known they were in violation of blah blah. Maybe so, but the US tax code, for example, is so opaque that not even the legislators know how big it is (and that's just one cluster of laws). How many laws did someone break today?... that's for the State to decide, whenever the mood strikes them.

Teaser: "So, depending on whom you ask, our elected representatives are of the opinion that this particular section of the United States Code is somewhere between 2,500 and 2,500,000 pages long."

http://www.trygve.com/taxcode.html

Put me down for "unregulated BTC".           

[rovchris]

You completely miss the point - only FIAT currencies can be taxed.

Both the US and Canadian governments have recently gone out of their way to "clarify" that they require taxes to be paid on all bartered goods. Presumably that is ridiculously unenforceable, but they have staked out the turf nonetheless.

Exactly that - they can pass as much legislation as they want but if they can not enforce it then it is irrelevant. This just sums up nicely how far out of touch State legislators are - they have no understanding of the real world.

hahahaa.

You see, they CAN. They just create a value, write off the tax and then send you a bill. You cannot pay, you are being taken to court. You cannot pay up then, you go to jail and create interest. It just ruins your life.

You can pay but don't want to? Ah, they will just take it. Pressuring your bank, getting any other enforcement division to get into your house, blacklist accounts... all this funny stuff.

No it does not work like that. The value is dictated when the commodity or investment is sold for FIAT and then you pay income tax on that.

If you have Gold you do not pay tax until you SELL do you understand this? They do not send you a yearly bill on the commodities you hold only when you SELL.

So what you are saying is this - they will go round to every business in the country assigning values to items that they have no knowledge of and then demand tax. I can really see that happening.

Look man if you don't like bitcoins and insist on giving the State money for them to waste and fight illegal wars - that is your prerogative so just use dollars. The idea behind bitcoins was to change all this.

[aigeezer]

No it does not work like that. The value is dictated when the commodity or investment is sold for FIAT and then you pay income tax on that.

From the (mind-numbing) government of Canada tax site:

"Deemed proceeds of disposition

    This is an expression used when a person is considered to have received an amount for the disposition of property, even though the person did not actually receive that amount."

... and ...

"Eligible amount of the gift

    Under proposed changes, this is generally the amount by which the fair market value of the gifted property exceeds the amount of the advantage, if any, received for the gift.

    Under proposed changes, the advantage is generally the total value of all property, services, compensation, or other benefits to which you are entitled as partial consideration for, or in gratitude for, the gift. The advantage may be contingent or receivable in the future, and given either to you or a person not dealing at arm's length with you.

    Under proposed changes, the advantage also includes any limited-recourse debt in respect of the gift at the time it was made. For example, there may be a limited-recourse debt if the property was acquired though a tax shelter that is a gifting arrangement. In this case, the eligible amount of the gift will be reported in box 13 of Form T5003, Statement of Tax Shelter Information. For more information on gifting arrangements and tax shelters, see Guide T4068, Guide for the Partnership Information Return (T5013 forms)"

Sorry for the emetic. My point was just to illustrate that the State is very aware of how to turn commodities into fiat equivalents whether or not the parties to the transaction actually used fiat, and indeed whether or not a transaction even took place!

http://www.cra-arc.gc.ca/tx/ndvdls/lf-vnts/dth/glssry-eng.html#proceeds

Of course, rules vary from one jurisdiction to another, but when one State entity finds a way to make a tax grab then others tend to follow suit.

[rovchris]

No it does not work like that. The value is dictated when the commodity or investment is sold for FIAT and then you pay income tax on that.

From the (mind-numbing) government of Canada tax site:

"Deemed proceeds of disposition

    This is an expression used when a person is considered to have received an amount for the disposition of property, even though the person did not actually receive that amount."

... and ...

"Eligible amount of the gift

    Under proposed changes, this is generally the amount by which the fair market value of the gifted property exceeds the amount of the advantage, if any, received for the gift.

    Under proposed changes, the advantage is generally the total value of all property, services, compensation, or other benefits to which you are entitled as partial consideration for, or in gratitude for, the gift. The advantage may be contingent or receivable in the future, and given either to you or a person not dealing at arm's length with you.

    Under proposed changes, the advantage also includes any limited-recourse debt in respect of the gift at the time it was made. For example, there may be a limited-recourse debt if the property was acquired though a tax shelter that is a gifting arrangement. In this case, the eligible amount of the gift will be reported in box 13 of Form T5003, Statement of Tax Shelter Information. For more information on gifting arrangements and tax shelters, see Guide T4068, Guide for the Partnership Information Return (T5013 forms)"

Sorry for the emetic. My point was just to illustrate that the State is very aware of how to turn commodities into fiat equivalents whether or not the parties to the transaction actually used fiat, and indeed whether or not a transaction even took place!

http://www.cra-arc.gc.ca/tx/ndvdls/lf-vnts/dth/glssry-eng.html#proceeds

Of course, rules vary from one jurisdiction to another, but when one State entity finds a way to make a tax grab then others tend to follow suit.

I hear you but the truth is this - if you exchange one item of stock in your inventory for another the net change is ZERO. You can not pay Income tax when there is no income.

[aigeezer]

I hear you but the truth is this - if you exchange one item of stock in your inventory for another the net change is ZERO. You can not pay Income tax when there is no income.

What does truth have to do with it? We are talking tax regulations.     

Amazingly, the tax authorities see barter transactions as being taxable.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Bartering-Tax-Center#

Perhaps less amazingly, they see everything as being taxable.

[rovchris]

I hear you but the truth is this - if you exchange one item of stock in your inventory for another the net change is ZERO. You can not pay Income tax when there is no income.

What does truth have to do with it? We are talking tax regulations.      

Amazingly, the tax authorities see barter transactions as being taxable.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Bartering-Tax-Center#

Perhaps less amazingly, they see everything as being taxable.

OK after having a quick scan the pertinent line of information is this.

" Earning trade or barter dollars through a barter exchange is considered taxable income, just as if your product or service was sold for cash. "

This implies you have to have earned money to be taxed if the net change is zero then nothing has been made. So the case still stands if you trade and the net gain is zero there is no tax to pay.

I believe that this is to stop someone swapping a pencil for a house - But in reality nobody would do this for a genuine trade.

I take it you live in Canada you lucky chappy I would love to live there.

[aigeezer]

I hear you but the truth is this - if you exchange one item of stock in your inventory for another the net change is ZERO. You can not pay Income tax when there is no income.

What does truth have to do with it? We are talking tax regulations.     

Amazingly, the tax authorities see barter transactions as being taxable.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Bartering-Tax-Center#

Perhaps less amazingly, they see everything as being taxable.

OK after having a quick scan the pertinent line of information is this.

" Earning trade or barter dollars through a barter exchange is considered taxable income, just as if your product or service was sold for cash. "

This implies you have to have earned money to be taxed if the net change is zero then nothing has been made. So the case still stands if you trade and the net gain is zero there is no tax to pay.

Good digging - that seems reassuring. I've been digging also and I'm finding that the deeper I go the deeper it gets. Part of the problem is that I'm flitting back and forth between US and Canadian sites.

The Canadian tax agency says, in part:

"The Department takes the view that barter transactions are within the
purview of the Income Tax Act."

...

"Where the taxpayer is an employee, e.g.
a mechanic, occasional help given to a friend or neighbour in exchange for
something would not be taxable unless the taxpayer made a regular habit of
providing such services for cash or barter."

http://www.cra-arc.gc.ca/E/pub/tp/it490/it490-e.txt

... which I find completely unhelpful. The "regular habit" would have me looking over my shoulder for the tax man whenever I thought about helping a friend or neighbour (Canadian spelling), which is perhaps exactly their intention.

Is my habit irregular? Is it a habit at all? Only the taxman knows.

Anyway, there is evidence to support your position (equal trade means no tax implications) and there is evidence to support more sinister interpretations (there are no even trades, and everything is taxable unless the taxman decides not to bother).

The Canadian guideline is old, and was written long before crypto-currencies appeared - it was written to make a tax grab against "barter clubs" which were springing up at the time and have since gone out of fashion, perhaps because of the government response. The "barter exchange" referred to in the American guideline is perhaps the same phenomenon.

How this will all relate to BTC interactions is up to taxmen everywhere to decide. Run for the hills!       
 

[rovchris]

The hills - here I come LOL

too true.

It is poorly written legislation and impossible to interpret - what is regular for example, once a day, once a month. The problem for them is the public are not machines and can not be programmed and it is physically and legally impossible for them to stop humans exchanging goods.

They are trying to legislate a natural behaviour that is evident in all people.  It is the equivalent to saying you are only permitted 1000 heart beats a day! They can pass all the laws they want and it will not change the course of evolution in the slightest.

It is amusing watching them try though.

[worldinacoin]

I say dont do any deal with fiat currency, just keep trading with each other using bitcoins

[sinner]

how could bitcoin be regulated?  sounds as ridiculous as "regulate bittorrent".

when people say "regulate bitcoin" what they really mean is "regulate exchanges" right?

[rovchris]

I say dont do any deal with fiat currency, just keep trading with each other using bitcoins

You Sir are exactly what the community needs.

Good on you.

[BitcoinMoxy]

 

[rovchris]

how could bitcoin be regulated?  sounds as ridiculous as "regulate bittorrent".

when people say "regulate bitcoin" what they really mean is "regulate exchanges" right?

No - for some reason they are want to involve state regulation at the development level as Gavin was involved.

What they will want is every Wallet registered to a person / address - the ability to cease accounts, funds trace every transaction. Basically they want to copy the current banking system because that worked so well and foist it upon us.

[bitcoinanon]

The basis of bitcoin is already regulated by its coding. Right? I do not think much more regulation is needed. Though I think the discussion needs to continue amongst the community lest something happen without the approval of the community. If the community remains a P2P network how could anything happen to the bitcoin community with the approval of the community, like unwanted regulation for example?

[RodeoX]

how could bitcoin be regulated?  sounds as ridiculous as "regulate bittorrent".

when people say "regulate bitcoin" what they really mean is "regulate exchanges" right?

No - for some reason they are want to involve state regulation at the development level as Gavin was involved.

What they will want is every Wallet registered to a person / address - the ability to cease accounts, funds trace every transaction. Basically they want to copy the current banking system because that worked so well and foist it upon us.

Can you quote me a source? I have never seen any regulatory body mention that. What has been stated is regulation of exchanges. Which is regulation of fiat currency. Just as you are required to pay a tax on any profit made from selling anything. (U.S. citizens)

[rovchris]

how could bitcoin be regulated?  sounds as ridiculous as "regulate bittorrent".

when people say "regulate bitcoin" what they really mean is "regulate exchanges" right?

No - for some reason they are want to involve state regulation at the development level as Gavin was involved.

What they will want is every Wallet registered to a person / address - the ability to cease accounts, funds trace every transaction. Basically they want to copy the current banking system because that worked so well and foist it upon us.

Can you quote me a source? I have never seen any regulatory body mention that. What has been stated is regulation of exchanges. Which is regulation of fiat currency. Just as you are required to pay a tax on any profit made from selling anything. (U.S. citizens)

It was in one of the posts on this thread have a read through. No one was disputing that exchanges are fully under the control of the State if they are exchanging for FIAT. That is not what this thread was about. No regulatory body has mentioned it - it is a discussion we are having.

People were suggestion we should try and self regulate before its rammed down our throats.

[RodeoX]

how could bitcoin be regulated?  sounds as ridiculous as "regulate bittorrent".

when people say "regulate bitcoin" what they really mean is "regulate exchanges" right?

No - for some reason they are want to involve state regulation at the development level as Gavin was involved.

What they will want is every Wallet registered to a person / address - the ability to cease accounts, funds trace every transaction. Basically they want to copy the current banking system because that worked so well and foist it upon us.

Can you quote me a source? I have never seen any regulatory body mention that. What has been stated is regulation of exchanges. Which is regulation of fiat currency. Just as you are required to pay a tax on any profit made from selling anything. (U.S. citizens)

It was in one of the posts on this thread have a read through. No one was disputing that exchanges are fully under the control of the State if they are exchanging for FIAT. That is not what this thread was about. No regulatory body has mentioned it - it is a discussion we are having.

cool. I just no evidence of measures that invasive. Although, who knows what the future holds? 

[rovchris]

cool. I just no evidence of measures that invasive. Although, who knows what the future holds? 

Totally man - nobody knows and that is why people are getting the jitters.

[rovchris]

The basis of bitcoin is already regulated by its coding. Right? I do not think much more regulation is needed. Though I think the discussion needs to continue amongst the community lest something happen without the approval of the community. If the community remains a P2P network how could anything happen to the bitcoin community with the approval of the community, like unwanted regulation for example?

If the developers change Bitcoind then there is nothing we can do.

[RodeoX]

cool. I just no evidence of measures that invasive. Although, who knows what the future holds? 

Totally man - nobody knows and that is why people are getting the jitters.

Understandable. We have all seen the government in the U.S. go crazy with regulation at times. But people are working hard for bitcoin right now to guide and educate lawmakers. Compared to the press BTC was getting last year, it is not such a hard sell.

Financial regulators are just people. People interested in money! If they do not feel threatened or insulted, they may become bitcoin fans. Money geeks tend to like BTC once they understand it.  

[rovchris]

cool. I just no evidence of measures that invasive. Although, who knows what the future holds? 

Totally man - nobody knows and that is why people are getting the jitters.

Understandable. We have all seen the government in the U.S. go crazy with regulation at times. But people are working hard for bitcoin right now to guide and educate lawmakers. Compared to the press BTC was getting last year, it is not such a hard sell.

Financial regulators are just people. People interested in money! If they do not feel threatened or insulted, they may become bitcoin fans. Money geeks tend to like BTC once they understand it.  

The way I look at it is like this. Instead of the government and banks forcing us to change we need to force them. The only way is by starving the beast - by reducing the tax they collect the less they can borrow. They are totally unaccountable for everything - they need to provide the basic services only and stop interfering with everything - all they do is make it worse every time.

If something does not change we will be paying 80% taxation in 20 years time just so they can live large while the rest of us fight for scraps. We have an opportunity for the first time in history to redress the balance. Once the levers of money creation are prised from their dead cold hands they will then be public servants as they should be - not our lords and masters.

[Schrankwand]

No - for some reason they are want to involve state regulation at the development level as Gavin was involved.

Hard fork.

They don't get the tek behind this, I guess.

And for those who are interested in getting ahead with this: I suggest setting up your pools over different companies than you do right now. Somewhere in the Antilles, on Malta, anywhere.

[rovchris]

No - for some reason they are want to involve state regulation at the development level as Gavin was involved.

Hard fork.

They don't get the tek behind this, I guess.

And for those who are interested in getting ahead with this: I suggest setting up your pools over different companies than you do right now. Somewhere in the Antilles, on Malta, anywhere.

Yeah that was the exact response someone else gave and I agree.

[RodeoX]

The way I look at it is like this...

I think bitcoin will help address tax inequity as well. For example, the money I make from working hard is taxed at about 35%. The money I make sitting on my butt watching bitcoin prices rise (capitol gains) is taxed at 20%. Capitol gains has traditionally been a rich guys wages. We are taking that back!

[ErisDiscordia]

The way I look at it is like this. Instead of the government and banks forcing us to change we need to force them. The only way is by starving the beast - by reducing the tax they collect the less they can borrow. They are totally unaccountable for everything - they need to provide the basic services only and stop interfering with everything - all they do is make it worse every time.

Agreed! Let's starve the beast, we can't fight it with force, it has grown too powerful.

To be honest I am a bit perplexed and disgusted by the amount of "let's work with the regulators" sentiment seen even here, in a place which can be expected to have a higher than average concentration of anarchist/libertarian/voluntarist/whatever you want to call it thinking. Here we are presented with a unique tool free of government control, finally something to restore the balance of power by denying government the ability to control absolutely everything...and we want to do what? Convince the "right" people to pass the "right" legislation? C'mon people, there are no right people and there is no right legislation. Time to admit this and start taking responsibility.

[rovchris]

The way I look at it is like this. Instead of the government and banks forcing us to change we need to force them. The only way is by starving the beast - by reducing the tax they collect the less they can borrow. They are totally unaccountable for everything - they need to provide the basic services only and stop interfering with everything - all they do is make it worse every time.

Agreed! Let's starve the beast, we can't fight it with force, it has grown too powerful.

To be honest I am a bit perplexed and disgusted by the amount of "let's work with the regulators" sentiment seen even here, in a place which can be expected to have a higher than average concentration of anarchist/libertarian/voluntarist/whatever you want to call it thinking. Here we are presented with a unique tool free of government control, finally something to restore the balance of power by denying government the ability to control absolutely everything...and we want to do what? Convince the "right" people to pass the "right" legislation? C'mon people, there are no right people and there is no right legislation. Time to admit this and start taking responsibility.

The reason for the "lets work with regulators " attitude is because they believe the price of Bitcoin will increase dramatically. Also know as - to hell with the project let me feather my own nest. Avalon customers seem to have the same attitude if you read that thread.

All I am going to say is people are quite happy to sacrifice a chance at freedom for their short term gain. Basically no different to bankers or politicians and if they destroy bitcoin with it - they don't care.

Now a battle is being fought on two fronts - the insanity continues.

[Bogdan]

Bitcoin is about freedom and it should stay that way.

[justusranvier]

I've decided that I am more than happy to work with FinCEN and other regulators if their goal is to stop the flow of money to terrorist organizations because I find terrorism appalling and would love to see it stopped somehow. All FinCEN needs to do to convince me to cooperate with them is to show that they really are serious about combating terrorism.

So the instant after I hear that FinCEN has frozen the bank account and financial assets of the US DoD I'll be one of their most public and vocal supporters encouraging everyone to work with them to continue stopping the flow of funds to terrorist organizations.

[rovchris]

I've decided that I am more than happy to work with FinCEN and other regulators if their goal is to stop the flow of money to terrorist organizations because I find terrorism appalling and would love to see it stopped somehow. All FinCEN needs to do to convince me to cooperate with them is to show that they really are serious about combating terrorism.

So the instant after I hear that FinCEN has frozen the bank account and financial assets of the US DoD I'll be one of their most public and vocal supporters encouraging everyone to work with them to continue stopping the flow of funds to terrorist organizations.

Nice one man

[Schrankwand]

The reason for the "lets work with regulators " attitude is because they believe the price of Bitcoin will increase dramatically. Also know as - to hell with the project let me feather my own nest. Avalon customers seem to have the same attitude if you read that thread.

All I am going to say is people are quite happy to sacrifice a chance at freedom for their short term gain. Basically no different to bankers or politicians and if they destroy bitcoin with it - they don't care.

Now a battle is being fought on two fronts - the insanity continues.

You mean, not a chance, but an experiment in freedom.

The necessary regulations for it are already in place. So whatever you do, governments won't control your bitcoin, but the laws are already made up so they don't have to.

The only reason to get rid of this problem would in fact usurping a government (Which then will be replaced by another, variation of government, doing the same shit).

I propose something far more interesting than that:

I propose a law demurrage. I propose, that after a set number of years, be it ten, be it twenty, all laws loose their value. They have an expiry date. All people who have been in that time, part of the government (Parliament, senate, whatever), are then retired and allowed to be retirees for the rest of their life. And at the same time, never allowed to become members of government ever again.

This would create something I would call a fail well system. You see, Bruce Schneier said that instead of creating a system that does not fail, a system that fails well will be more useful.

All the problems that one generation of politicians sees but is overruled on, will be solved by simply force retiring laws and politicians alike. Real stability does not exist. The EU and similar democratic governments have created systems that simply decay more slowly than before. The absence of intra-EU war has led to systems dying more slowly than before. But the arrogance comes at the point where we say "things are different now, we will stay stable!" Instead of riding this wave of arrogance, I propose creating a system that ultimately has no choice but to fail and be replaced.

The basics would have to be set in stone as a matter of human rights and agree upon by a majority. For every single law, we would manifest that right. Anything else expires and needs to be replaced. Let us introduce laws into the realm of the real world, where things break and are not forever.

That is what I propose. Instead of creating anarchism, which will stabilize in some form of government anyway at some point, instead of creating a long term always stable system that at some point will turn against its own citizens, because it always has and always will, let us create set points for the systems to be extinct, reliably, and be replaced with with something new, more appropriate, with a more modern understanding.

I think this might the most radical and useful way to create a governmental system.

[BitcoinAshley]

We can also ensure that there are options if certain funds need to be frozen and blacklisted, due to fraud, theft, or because they encode illegal data.

Great, so now we'll be just like PayPal and the credit card companies?
Introducing coin tainting or similar system makes absolutely no sense.
Who gets to decide gray area stuff - what's illegal and what's not... which country's laws apply for a wallet user whose geographical location cannot be determined due to Tor.... are we going to bring the ineffective policy of institutional racism known as the War on Drugs into Bitcoin, and thefttaxation? We will force bitcoin users to financially support the Wars in the Middle East and killing children with drones?
Most people will agree that child porn is 'illegal.' But many people will not agree on what child porn is. In the legal environment we live in, a teenage girl who sends a nude photo to her boyfriend can be arrested and sentenced (in some jurisdictions) on child pornography laws. Attempting to apply state laws to a blacklist/whitelist system in a pseudonymous, unregulated, polyjurisdictional currency isn't just stupid, it's downright confounding and would be an absolute nightmare to implement.

We can also go the other route, and give Bitcoin users even more tools to remain anonymous and transact on their own terms. Technologies like mixing and off-chain transactions to let you make transactions without revealing where the coins came from, technologies like P2Pool to ensure mining stays decentralized, and colored coins to let us trade our assets without involving third party exchanges.

Any cryptocurrency that I participate in will be going in this route, or else I will refuse to participate. And I think there millions of other people who feel exactly the same as I.

No offense to anyone here defending regulation... but being scared of government regulators doesn't mean you're "realistic" and "practical," it means you're a socialist weenie. And look where socialist weenies got us... a world of fascist and corrupt government who now want to apply their fascism and corruption to Bitcoin.

[RodeoX]

People seem to forget that all commerce is regulated in the U.S. Bitcoin will not be some kind of exception. Under any scenario it is subject to regulation. Even the title of this implies that keeping bitcoin "unregulated" is some kind of choice.

I'm sure when next years tax fines are handed out people are going to come and use their energy to complain. They would be better off using that energy now to persuade the people who will decide the legal future of bitcoin.   

[BitcoinAshley]

People seem to forget that all commerce is regulated in the U.S. Bitcoin will not be some kind of exception. Under any scenario it is subject to regulation. Even the title of this implies that keeping bitcoin "unregulated" is some kind of choice.

Oh, sure, but you're not really saying anything. That's not being disputed by anyone. The U.S. could pass a law tomorrow that says Bitcoin is illegal. Any state can pass any law they desire to pass.

What is the issue - is bitcoin willingly introducing regulatory systems either into its code, or into the largest infrastructure - exchanges, merchant processors, etc.
For instance - introducing a coin tainting system. This might not require any protocol change, but it would at least require a fairly advanced coin control and monitoring plugin to the GUI so that users can make sure the coins they are sending are not unknowingly on any one of the "central taint council" blacklists for various jurisdictions. This system might not be effective since many bitcoin users would just stop using those institutions that participate in the regulation. Most bitcoin users have had it up to here with big companies trying to control their money - and according to Peter Vessenes, coins sent through mixers in the past will not be grandfathered in a coin taint scheme. That means if any coins (or fractions of coin) you currently own were ever used for a silk road pot sale in the past without your knowledge, these coins could be rendered useless at any large bitcoin institution which participates for AML concerns - i.e. you couln't sell them at MtGox, use them to pay for Bitpay merchants, etc.

So yeah, keeping bitcoin unregulated IS a choice in the same way that keeping BitTorrent unregulated was a choice. The coders didn't introduce reporting and whitelisting and blacklisting and centralized regulatory systems - they just left it as it is and the government couldn't do anything about it except arrest a few Grandmas to try to arouse the public.