Why regulation will absolutely NOT cause Bitcoin price to go down.

[MAbtc]

Good thoughts here, thanks all for replying. I'll just reply to EM here because rest of you seem to have taken care of each other 

Not sure about that. Care to respond to my post?

[Crypt_Current]

If the US made it illegal to own bitcoin (note that I don't think that will ever happen), it would severely affect it's usefulness as a store of value. Many people would not use it simply because it is not worth the legal risk.

Really, truly, honestly?
Allow me to put your own convoluted opinion into perspective for you (and also I want to be sure I'm understanding you correctly):
So, you're saying, that if (in the as you said unlikely scenario) the US (or any?) government bans Bitcoin -- makes a written law that says something like, "using Bitcoin is illegal" -- you would be SO SCARED of it to the point that you would not even bother using a brain wallet, for fear of the thought police getting inside your head?

So, it follows that you would CERTAINLY give up physical items deemed illegal as well -- such as weapons & ammo -- no questions asked??

REALLY ?

[mgio]

If the US made it illegal to own bitcoin (note that I don't think that will ever happen), it would severely affect it's usefulness as a store of value. Many people would not use it simply because it is not worth the legal risk.

Really, truly, honestly?
Allow me to put your own convoluted opinion into perspective for you (and also I want to be sure I'm understanding you correctly):
So, you're saying, that if (in the as you said unlikely scenario) the US (or any?) government bans Bitcoin -- makes a written law that says something like, "using Bitcoin is illegal" -- you would be SO SCARED of it to the point that you would not even bother using a brain wallet, for fear of the thought police getting inside your head?

So, it follows that you would CERTAINLY give up physical items deemed illegal as well -- such as weapons & ammo -- no questions asked??

REALLY ?

No, I wouldn't be scared of it. But it would suddenly become a much more risky investment than it is now, and I'd likely sell my bitcoins as quickly and discreetly as possible and I imagine that any legitimate investor would do the same. Not because I would worry about being caught but because such a move would be devastating move to bitcoin. Not to say it wouldn't succeed eventually, but it would make it take much longer.

Stop being an idealist, this is money we are talking about. Have all the principles you want, but you have to be practical when it comes to your investments.

btw, MAbtc has the best post on this thread. Everyone should read it. He hit the nail on the head and there is no point in me reiterating his points.

[Lohoris]

banks in certain countries shutting down exchanges for political reasons (Poland for example.)

such as?

There is a huge difference. Marijuana has some inherent value. The US making it illegal doesn't diminish the high you get. People want to smoke marijuana whether it is legal or not. Bitcoins inherent value is related to its usefulness as a currency and store of value.

+1

[adamas]

banks in certain countries shutting down exchanges for political reasons (Poland for example.)

such as?

bitcoin-24.com

[naphto]

banks in certain countries shutting down exchanges for political reasons (Poland for example.)

such as?

bitcoin-24.com

money laundering is forbidden

[Crypt_Current]

If the US made it illegal to own bitcoin (note that I don't think that will ever happen), it would severely affect it's usefulness as a store of value. Many people would not use it simply because it is not worth the legal risk.

Really, truly, honestly?
Allow me to put your own convoluted opinion into perspective for you (and also I want to be sure I'm understanding you correctly):
So, you're saying, that if (in the as you said unlikely scenario) the US (or any?) government bans Bitcoin -- makes a written law that says something like, "using Bitcoin is illegal" -- you would be SO SCARED of it to the point that you would not even bother using a brain wallet, for fear of the thought police getting inside your head?

So, it follows that you would CERTAINLY give up physical items deemed illegal as well -- such as weapons & ammo -- no questions asked??

REALLY ?

No, I wouldn't be scared of it. But it would suddenly become a much more risky investment than it is now, and I'd likely sell my bitcoins as quickly and discreetly as possible and I imagine that any legitimate investor would do the same. Not because I would worry about being caught but because such a move would be devastating move to bitcoin. Not to say it wouldn't succeed eventually, but it would make it take much longer.

Stop being an idealist, this is money we are talking about. Have all the principles you want, but you have to be practical when it comes to your investments.

btw, MAbtc has the best post on this thread. Everyone should read it. He hit the nail on the head and there is no point in me reiterating his points.

Your argument reminds me of people in 1995 that thought the Internet was a fad and refused to even learn how to use a Web browser til circa 2000 ... By 2001, they were laughably / tragically behind the times as far as general computer literacy and Web utilization skills (skills such as spotting most likely virus sources, expedient research, credibility of research results, etc.) 

[Zaih]

Regulation still means we'll never be able to reach our full potential. The dreams of one universal currency is more and more unlikely. And with that comes a lot of people who are no longer interested in holding onto the coin.

I guess it's got many sides to it.

[Miz4r]

Stop being an idealist, this is money we are talking about. Have all the principles you want, but you have to be practical when it comes to your investments.

I will never stop being an idealist. People have been dying for their ideals, this is 'only' money. If there were no idealists willing to sacrifice themselves nothing would ever change in this world. I will keep my bitcoins no matter what happens, and I will only buy more when people get scared by the government cracking down on bitcoin.

[Lohoris]

banks in certain countries shutting down exchanges for political reasons (Poland for example.)

such as?

bitcoin-24.com

lol.

btc24 got closed because the owner was a total incompetent.

stating it was because of "political reasons" is a total whiny FUD.
which, by the way, damages the whole Bitcoin community. So, please, stop this nonsense.

[pwi]

Perhaps if the utility of bitcoin were in the same universe as the utility of the dollar. Your theory only works if the basis for demand remains -- a huge assumption.

This is what you have not proven: If bitcoin enters the black market, legally viable alternatives will not take its place.

Current demand IMO is based mostly on speculation in re to store of value -- not bitcoin's use as currency. There is little demand for bitcoin as an actual currency/payment system – people don’t need it. If shit goes south, there are plenty of legal alternatives. And IMO, the average person – who bitcoin needs for mass adoption – is happy to use Paypal, credit cards, bank transfer, etc. without getting their hands involved in anything legally dubious. What will happen to bitcoin's perceived use as currency if it becomes particularly difficult to obtain fiat currency with it? It's starting to sound like the Peso! Will people be paying premiums to offload their bitcoin? 

In the case of a US government crackdown, would you expect speculators to stick around? If so, why? And in such a case, what happens to all the VC capital that perma-bulls keep going on about? Successful VCs love to invest in legally questionable ventures, don't they? Yes, any type of government crackdown on bitcoin is going to create a frenzy of investment!

Oh, drugs. Let's talk about drugs. Do you really think bitcoin could compare with illegal drugs in terms of demand?

For reference, in 1906, 25 million people were using opium (1.5% of the world population). According to the US Opium Commissioner, in 1911, US residents consumed 500,000 pounds of opium, or ~1 pound per 180 people. As for cocaine, in 1906, the US imported 2.86 million pounds of coca leaf, in addition to "large quantities" of manufactured cocaine.

Compare to size of bitcoin economy. Do you think there is 1 million bitcoin users, which would put bitcoin users at 0.014% of the world population? Give or take a couple 100,000 or so? And of those bitcoin users, how many are merely speculators, who will simply leave bitcoin during a prolonged downslide (or at the outset of panic) for other investments? Regardless, doesn't your scenario require mass adoption? Massive demand which currently does not exist?

Bittorrent? The decentralization that you speak of ... what would happen if Gox, Bitstamp, Bitpay, Satoshi Dice were to go down? (the latter won't be safe simply by ceasing to serve US residents going forward) ... and what would merchants do when they see bitcoin operators being picked off by the government?

Anyway, yada yada yada, more devil's advocate shit. But really this idealism is crazy! A lot of what I see here can only be described as pure faith ... at least be open to the possibility that our beloved bitcoin may fall on very hard times someday.

Oh, and regarding the last point of the OP, there is always the possibility that short/medium term outlook ≠ long term outlook. Or that one's outlook contains caveats that account for such things. Some of us think shit may hit the fan in the future. That doesn't mean I'm selling now.

I'm going to run with this analogy for a minute. In the event of a 'crackdown' as you so aptly put it; Bitcoin may very well go the way of opium.

Outlaw it, and some enterprising individual will make heroin-coin. The H-coin will be the Ponzi many claim Bitcoin is today.

Governments and banks will formulate and issue synthetics like oxycodone-bitcoin (the regulated version) and offer it to those that wish to abide by the law.

1.5% of the population no longer uses opium, but nearly 10% find themselves addicted to opiates at some time in their lives. Regulating opium and poppy has done little to curb individuals' appetites for opiates. There is no question which one impacts more lives in a negative manner.

Most find themselves hooked on the legal version marketed by big-Pharma and regulated by big brother. This is analogous to the world's addiction to fiat/dollar printing, borrowing, and acquiring. At the end of the day, we are pretty damn good at policing ourselves without outside influence and control.

Bitcoin is the magnificently beautiful poppy. Anything else is dirty and destructive smack.

Once 1.5% (maybe less) of the world adopts Bitcoin, there will be no turning back. Excuse me for a moment, I've got to get my Bitcoin fix.       

[RationalSpeculator]

Perhaps if the utility of bitcoin were in the same universe as the utility of the dollar. Your theory only works if the basis for demand remains -- a huge assumption.

This is what you have not proven: If bitcoin enters the black market, legally viable alternatives will not take its place.

Current demand IMO is based mostly on speculation in re to store of value -- not bitcoin's use as currency. There is little demand for bitcoin as an actual currency/payment system – people don’t need it. If shit goes south, there are plenty of legal alternatives. And IMO, the average person – who bitcoin needs for mass adoption – is happy to use Paypal, credit cards, bank transfer, etc. without getting their hands involved in anything legally dubious. What will happen to bitcoin's perceived use as currency if it becomes particularly difficult to obtain fiat currency with it? It's starting to sound like the Peso! Will people be paying premiums to offload their bitcoin?  

In the case of a US government crackdown, would you expect speculators to stick around? If so, why? And in such a case, what happens to all the VC capital that perma-bulls keep going on about? Successful VCs love to invest in legally questionable ventures, don't they? Yes, any type of government crackdown on bitcoin is going to create a frenzy of investment!

Oh, drugs. Let's talk about drugs. Do you really think bitcoin could compare with illegal drugs in terms of demand?

For reference, in 1906, 25 million people were using opium (1.5% of the world population). According to the US Opium Commissioner, in 1911, US residents consumed 500,000 pounds of opium, or ~1 pound per 180 people. As for cocaine, in 1906, the US imported 2.86 million pounds of coca leaf, in addition to "large quantities" of manufactured cocaine.

Compare to size of bitcoin economy. Do you think there is 1 million bitcoin users, which would put bitcoin users at 0.014% of the world population? Give or take a couple 100,000 or so? And of those bitcoin users, how many are merely speculators, who will simply leave bitcoin during a prolonged downslide (or at the outset of panic) for other investments? Regardless, doesn't your scenario require mass adoption? Massive demand which currently does not exist?

Bittorrent? The decentralization that you speak of ... what would happen if Gox, Bitstamp, Bitpay, Satoshi Dice were to go down? (the latter won't be safe simply by ceasing to serve US residents going forward) ... and what would merchants do when they see bitcoin operators being picked off by the government?

Anyway, yada yada yada, more devil's advocate shit. But really this idealism is crazy! A lot of what I see here can only be described as pure faith ... at least be open to the possibility that our beloved bitcoin may fall on very hard times someday.

Oh, and regarding the last point of the OP, there is always the possibility that short/medium term outlook ≠ long term outlook. Or that one's outlook contains caveats that account for such things. Some of us think shit may hit the fan in the future. That doesn't mean I'm selling now.

Great post! I agree that bitcoin price can become severely depressed when made illegal. However I do think it would survive as long as it remains the most secure way to trade illegal goods online. I think only a competing censorship resistant currency can destroy bitcoin for good. The state can only suppress it.  

[bitcoinator]

People CAN'T use marijuana in the US ... but oh boy, they sure do use marijuana!  A LOT of it.  But they CAN'T.  But they DO...

this passage made my day, thanks )

[Trading]

Most people keep bitcoins as an investment. Their value as a mean of payment in normal life is still limited. Usually, it's better to sell bitcoins for fiat and then buy goods/services, than to use bitcoins directly. Prices in bitcoins usually (there are exceptions: but compare bitmit prices with the ones from ebay) are higher. Well, many of these investors (think about those twins brothers that say they have 1% of all bitcoins) would dump bitcoin if they knew it was illegal. Many exchanges would be forced to close and we usually don't see people selling 1 million USDs in bitcoins on OTC or in bitcointalk. So, even if many people would keep their bitcoins, most deep pockets would dump them, because the risk to see other deep pockets do it sooner would be too great. Bitcoin would survive, but the price would go down a lot. You think differently, that the price would increase if the United States or the EU decided to force all exchanges to close? Well, dumpers would need people to buy their bitcoins.