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.
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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.
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Jeff GarzikThe 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.
