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Author Topic: What happens when the US makes crypto-currency illegal?  (Read 7994 times)
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May 25, 2013, 06:07:13 AM
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Hi Bitcoiners,

At some point in the not too distant future, the government of the United States will figure out that Bitcoin is a very high risk to its Hedgmony. (See http://en.wikipedia.org/wiki/Hegemony, Alan Greenspan loved this word.) The United States will make cryto-currency illegal because it will threaten the government's form of money (Federal Reserve Notes). Something similar happened on April 5, 1933 with Executive Order 6102. (See http://en.wikipedia.org/wiki/Executive_Order_6102). History tends to repeat itself.

Those who disobey the upcoming Executive Order or new law will learn what truly backs a Federal Reserve Note, that is, the force of its military and growing internal police state.

What is the solution to prevent the United States government from implementing such an action against cryto-currency?
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May 25, 2013, 06:20:36 AM
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buy some lobbyists with Bitcoins Smiley
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May 25, 2013, 06:20:59 AM
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This might slow down Bitcoin, but it wouldn't stop it.

Military grade cryptography changes the rules of the game forever, just as nuclear weapons did, though in a completely peaceful way. It exists, there are open source implementations in the hands of the public, it cannot be uninvented, and it has many legitimate purposes. It leaves society with a stark choice: either we allow it, in which case its tremendous power has far-reaching consequences, both good and bad, or we try to suppress it, in which case we need draconian measures and will likely at most succeed in taking it away from honourable citizens rather than criminals, who will not be deterred. Radical liberty or tyranny. There are of course less dramatic compromises in between, but I think we'll find that the power of cryptography makes these compromises unenforceable.

See: Untraceable Digital Cash, Information Markets, and BlackNet

ROI is not a verb, the term you're looking for is 'to break even'.
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May 25, 2013, 06:23:53 AM
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Hi Bitcoiners,

At some point in the not too distant future, the government of the United States will figure out that Bitcoin is a very high risk to its Hedgmony. (See http://en.wikipedia.org/wiki/Hegemony, Alan Greenspan loved this word.) The United States will make cryto-currency illegal because it will threaten the government's form of money (Federal Reserve Notes). Something similar happened on April 5, 1933 with Executive Order 6102. (See http://en.wikipedia.org/wiki/Executive_Order_6102). History tends to repeat itself.

Those who disobey the upcoming Executive Order or new law will learn what truly backs a Federal Reserve Note, that is, the force of its military and growing internal police state.

What is the solution to prevent the United States government from implementing such an action against cryto-currency?
To get it widely accepted outside of the US first might slow them down. Sadly this leaves the problem with the other governments.

"Schrödinger's cat walks into a bar. And doesn't."
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May 25, 2013, 06:33:30 AM
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Hi Bitcoiners,

At some point in the not too distant future, the government of the United States will figure out that Bitcoin is a very high risk to its Hedgmony. (See http://en.wikipedia.org/wiki/Hegemony, Alan Greenspan loved this word.) The United States will make cryto-currency illegal because it will threaten the government's form of money (Federal Reserve Notes). Something similar happened on April 5, 1933 with Executive Order 6102. (See http://en.wikipedia.org/wiki/Executive_Order_6102). History tends to repeat itself.

Those who disobey the upcoming Executive Order or new law will learn what truly backs a Federal Reserve Note, that is, the force of its military and growing internal police state.

What is the solution to prevent the United States government from implementing such an action against cryto-currency?

I gotta admit that I wear the same tinfoil hat as you seem to, and in the security work I've done, I've kind of trained myself to assume the worst case scenarios.

Although it does not seem to be the consensus...at least on bitcointalk.org...I personally doubt that the policy makers in our government are stupid.  They may have been and still be a bit ignorant about distributed crypto-currencies, but then again, so is everyone at this point.

I strongly suspect that the decisions about if/how/when to crack down on Bitcoin will be made with a decent amount of care in predicting the likely outcomes.  If a course of action is counter-productive (e.g., it chases the solution underground where it is more difficult to monitor) then it probably won't be taken.  A similar example would be to fragment things into a myriad of similar but smaller solutions.

This leads me to be strongly of the opinion that a durable distributed crypto-currency should do everything in it's power to retain a position of strength.  This means to actively develop around attack vectors which are not currently presented.  A sub-set of this is to remain jelously 'peer2peer' and to actively foster similar, and even 'competing' systems such that it would be less likely to successfully attack at one point.

If Bitcoin is on a trajectory which will make it easier to attack as time goes by, the wise course of action from the point of view of an attacker would be to sit on his hands.  Similarly, if there are 'upsides' (e.g., participant identification / honeypot effect) it also may make sense to bid one's time.  I would not rule out the possibility that both of these things are a factor right now.

---

Oh ya, that reminds me...I still have an open question for the Bitcoin Foundation:

 - What will you do if the regulators 'just say no' no matter how unfair/unjust/wrong it may be?

There are legitimate reasons to keep the answer something of a secret, but I think that the benefit of openness here will be cause more good than harm and is something which is worthwhile for the community to know.

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May 25, 2013, 06:40:08 AM
 #6

I simply lose the investment i totally can sleep at night without. srry. my bad

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May 25, 2013, 06:45:33 AM
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This leads me to be strongly of the opinion that a durable distributed crypto-currency should do everything in it's power to retain a position of strength.  This means to actively develop around attack vectors which are not currently presented.  A sub-set of this is to remain jelously 'peer2peer' and to actively foster similar, and even 'competing' systems such that it would be less likely to successfully attack at one point.

Well said.

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If Bitcoin is on a trajectory which will make it easier to attack as time goes by, the wise course of action from the point of view of an attacker would be to sit on his hands.  Similarly, if there are 'upsides' (e.g., participant identification / honeypot effect) it also may make sense to bid one's time.  I would not rule out the possibility that both of these things are a factor right now.

I think we're still at a stage before that. Governments and banks don't really understand Bitcoin just yet, and they are only barely aware of its existence. I don't think it strikes them as something that needs their urgent attention just yet. They see it as a fad, and as a toy for nerds that is too complicated for the general public. This will obviously change, but for now we still have time to make preparations. And of course, Satoshi - whoever he was - was already making preparations right from the beginning.

ROI is not a verb, the term you're looking for is 'to break even'.
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May 25, 2013, 07:09:41 AM
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BTCUSD probably will double/triple after the initial shock.
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May 25, 2013, 08:02:06 AM
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If Bitcoin is on a trajectory which will make it easier to attack as time goes by, the wise course of action from the point of view of an attacker would be to sit on his hands.  Similarly, if there are 'upsides' (e.g., participant identification / honeypot effect) it also may make sense to bid one's time.  I would not rule out the possibility that both of these things are a factor right now.

I think we're still at a stage before that. Governments and banks don't really understand Bitcoin just yet, and they are only barely aware of its existence. I don't think it strikes them as something that needs their urgent attention just yet. They see it as a fad, and as a toy for nerds that is too complicated for the general public. This will obviously change, but for now we still have time to make preparations. And of course, Satoshi - whoever he was - was already making preparations right from the beginning.

I hope you are right.  I suspect that the last run-up was a notable wake-up call, and things are not so complex that it would take a long time to get up to speed.  Most people do, intuitively, recognize Bitcoin as subversive and as something of a threat from an early phase of their understanding in my experience even if only semi-consciously or in ways that they cannot quite put their finger on.  Of course to some people that is good and to others it is bad.  The former tend to become the enthusiasts.

I also believe that there is probably a good deal more capture, storage, and analysis of what happens on the network than a lot of people realize.  Bitcoin was probably on the radar enough to give this traffic special treatment from fairly early on.

Lastly, a possible 'attack' might be to simply leave Bitcoin alone and let it blow itself up.  It lack of scalability is a remarkable Achilles heal, imho, and if I were tasked to destroy Bitcoin, I may actually approach the problem by adding growth hormone...if that were even necessary in order to achieve the desired effect.  The trouble is that there will likely be follow-ons which learn from Bitcoin's mistakes.  But there will be anyway no matter what.


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May 25, 2013, 08:04:17 AM
 #10

We will eat cake.

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May 25, 2013, 08:09:00 AM
 #11

What happens when the US makes crypto-currency illegal?

Prison rape. Lots and lots of prison rape.

"It may be laid down as a primary position, and the basis of our system, that every Citizen who enjoys the protection of a Free Government, owes not only a proportion of his property, but even of his personal services to the defense of it." -George Washington
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May 25, 2013, 08:12:01 AM
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We will eat cake.

The cake is a lie.

ROI is not a verb, the term you're looking for is 'to break even'.
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May 25, 2013, 08:43:32 AM
 #13

Hi Bitcoiners,

At some point in the not too distant future, the government of the United States will figure out that Bitcoin is a very high risk to its Hedgmony. (See http://en.wikipedia.org/wiki/Hegemony, Alan Greenspan loved this word.) The United States will make cryto-currency illegal because it will threaten the government's form of money (Federal Reserve Notes). Something similar happened on April 5, 1933 with Executive Order 6102. (See http://en.wikipedia.org/wiki/Executive_Order_6102). History tends to repeat itself.

Those who disobey the upcoming Executive Order or new law will learn what truly backs a Federal Reserve Note, that is, the force of its military and growing internal police state.

What is the solution to prevent the United States government from implementing such an action against cryto-currency?

I've seen this question a lot over the past two years and I've come to the conclusion that the asker still hasn't grasped the concept of crypto currency.
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May 25, 2013, 04:05:20 PM
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nothing really, if satoshi thought things through... if all those businesses and exchanges were government burn bitcoin fronts, and ripple turned out to be a scam they still have 150,000,000,000,000 satoshis... I think that is more than enough to run the world economy on any given day.

and like a previous poster said, you really do not understand what Bitcoin has just done.

It is really insane, a freggin blockchain man! it holds the record of all history and makes it impossible to alter with current technology, there are people who are making messaging services out of it, creating money laundry services on it, fact check systems to prove when something was done and so much more.

did you know A.Is can use bitcoins to make purchases... that blows my mind! a sentient program can own property!

But staying on track, yeah this thing would be a serious hassle to get that Genie back in the bottle.

and I don't think they want to, think about it... why are they cracking down on exchanges? the information they get combined with the blockchain is the largest repository of economic data ever conceived.   Every single transaction in the bitcoin economy can be accurately and decisively known by anyone; The FBI have no clue what they are talking about, not being able to track terrorists? my God! once spotted they'll know exactly how much money they have!


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May 25, 2013, 04:30:11 PM
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I laugh at them while they suck my dick?

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May 25, 2013, 04:36:14 PM
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Prison rape. Lots and lots of prison rape.

Does this potential outcome excite you? Will you be the rapist? Are you sure your handle properly represents your current position?

Come on, admit you're a prison guard.
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May 25, 2013, 04:40:14 PM
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I suspect that it would have about as much long term effect as them trying to "shut down" the internet. They are too dependent on the same technologies to actively suppress it. Sure, you COULD shut down the internet by jamming the airwaves from about 100 meters down to .0001 millimeters, but that would shut down ALL communications. And somebody would figure out how to jam the jamming...

Short term? The value of the Bitcoin would go psycho. And it just MIGHT trigger a long needed revolution.

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May 25, 2013, 05:19:40 PM
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To say they are barely aware is wrong.  When fitting my tin foil hat into this mix. I have to be the one to pull the "they will scare people into dislikeing it" card.  Right now as I see it in a very short time bitcoin has beaten the US dollar,  euro and every other currency systen out there.  1 usd fr example isn't even worth the paper it's printed on.  But 1 bitcoin is worth a little over 100 of those worthless dollars.

They can't really stop you from accepting it as currency if so they would need to go after folks that work for a case of beer.  Or fixssomeones shitter for a lawn mower engine repair etc.  In theory strength in being able to do labor is currency one can without fail work within his means for food.

So to what end does the line actually draw?  I believe like many it will buckle up and go for a huge ride with the children.  Btc makes it way easy for a person to hide his actions.  Individuals under the age of 18 do have the right to make money however they do not have the right to spend that money in most cases the same way an adult does. 

Most people accepting btc do not ask for someones age or proof of age.  It's easy to access paid porno,  gamble,  purchase bootleg booze tobacco and hell as we all know contraband.  These are the facts of life that exist with every currency yes.  But BTC is the new kid in town.  So it's nitpicked a hell of a lot more then what is dubbed "safe".

They will over look the give and take.  Such in example as pulling btc out to the central banks to buy products from eBay, amazon etc. And hell even pay on a water bill or car loan.  Instead like said they will look at that percent of people who are fucking up and getting caught only to blame bitcoin for enableing them to preform the action to begin with.

It's very much like what happend to midway when they released mortal kombat.  It was all well and fine til little Johnny tried to pull his sisters spine out of her asshole. Now we have the ESRB as a reward for Johnny inability to handle his mental health and his parents inability to be self aware of what was fact and fiction
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May 25, 2013, 05:39:06 PM
 #19

The government is powerful, but it is also simultaneously fat, lazy, and ponderous.  Our opponent is not so much James Bond as it is Barney Fife or Sergeant Schultz.

Bitcoin dealers are required to register as financial institutions.  We must adapt to that reality.  We can adapt better than they can.
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May 25, 2013, 05:42:23 PM
 #20

 A lot of VCs like the Winklevoss twins will sue and overturn it.

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