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

[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.

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[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.