Bitcoin's war against the competition (LibertyReserve, who's next?)

[crazy_rabbit]

While many people see the recent crackdown as the government starting to find a way to regulate bitcoin, I would like to present it in a different light. Bitcoin is cracking down on it's competition and is using the US government to do so.

The old maxim "The enemy of my enemy is my friend" I think certainly applies here. Bitcoin being decentralised means it's a moving target that is difficult to hit, but it's strong record keeping system makes it appealing for governments who want to track any and every transaction, ever made.

The friends of bitcoin in high places may actually be cracking down on Bitcoin's competition because they actually WANT bitcoin to succeed. We have a common enemy in this situation. So far the news coverage I have been reading actually paints Bitcoin in contrast to services like Liberty reserve. The more the government can crackdown on Bitcoin's competitors that promote illegal activity, the faster we can become legitimate, regulated and open.

Of course, we still have to worry about when we no longer have any enemies in common.

[1714931443]

1714931443

[BTCLuke]

That is some serious, grade-A, industrial strength Optimism right there...

I'm sorry, but the people in the highest positions of power on this rock are the ones who have the most to lose from bitcoin gaining popularity.

[esenminer]

Allegedly, Liberty Reserve laundered $6 Billion USD over the last 7 years - Bitcoin wasn't even around 7 years ago, what makes you think this has anything directly to do with Bitcoin?

I don't think it's a coincidence that companies that Bitcoins are linked to are coming under scrutiny but it's not because Bitcoin is a threat in any way it's because the early companies who are adopting Bitcoin are either shady companies to begin with, unaware of laws affecting them like FinCEN or aware of them but choosing to ignore them. As far as I'm aware there have been 2 major shutdowns, Mount Sigilum (Mt Gox) and Liberty Reserve.

Then there is BitPay who is registered with FinCEN and who must do a couple of million dollars worth of business every month. One can argue that BitPay is a major driving force behind the success of Bitcoin because it allows you to actually use Bitcoin in real world places. If the government wanted to hurt bitcoin why wouldn't they just go after BitPay?

I haven't seen anything convincing that the US (or any other government) is worried about Bitcoin. What they are worried about is people not claiming income, not paying taxes and / or laundering money which of course means not paying taxes on it. If the US government decides to come after Bitcoin I don't think it will be through the Department of Homeland Security or FBI or CIA it will simply be through the IRS.

Think about this. When you mine coins you have not earned any additional income only unrealised income. However when you convert those coins to FIAT, which includes the purchase of goods, the government will now expect you to treat that as income earned and pay any taxes due on it. If you don't claim that income then the government has the right to come after you for unclaimed income (tax evasion) - which can and has landed people in jail. Already they have a pretty strong legal position.

I'm not trying to scare anybody away from bitcoin just want people to understand that mining bitcoins isn't a magical free pass - it's something the government will regulate and watch because essentially you are earning income and in most countries earning income means paying taxes.

[countryfree]

"The enemy of my enemy is my friend"

If the enemy is gone, the truce will go, too.

[escrow.ms]

Silly thread.

[MysteryMiner]

They always go for easiest target. Liberty Reserve was easy, like e-gold and that Liberty Dollar or smth. Bitcoin is hardest target ever. More resilient than Bittorrent and Freenet without single point of failure. If they decide to go after Bitcoin right now they will only fail and embarrass themselves.

Releasing technology on internet is like pooping your pants. No matter how hard you try, you will never get all back in. And you still are dirty.

[QuantumQrack]

While many people see the recent crackdown as the government starting to find a way to regulate bitcoin, I would like to present it in a different light. Bitcoin is cracking down on it's competition and is using the US government to do so.

Bitcoin isn't cracking down on anything.  The only good thing that can happen is more people adopt using Bitcoin as a commodity to trade with.  The U.S. Government is cracking down on these payment centers because they can.  It has nothing to do with fighting terrorism, child porn, etc.  The U.S. Government doesn't give a fuck about you and I, except as participants in the fucked up economic system instituted in 1913.

[escrow.ms]

Bitcoin isn't cracking down on anything.  The only good thing that can happen is more people adopt using Bitcoin as a commodity to trade with.  The U.S. Government is cracking down on these payment centers because they can.  It has nothing to do with fighting terrorism, child porn, etc.  The U.S. Government doesn't give a fuck about you and I, except as participants in the fucked up economic system instituted in 1913.

True, They just want more money.
US Govt is doing what drug cartels doo.. They Kill other drug dealers of their area, so they can earn more money.

[BitcoinAshley]

They always go for easiest target. Liberty Reserve was easy, like e-gold and that Liberty Dollar or smth. Bitcoin is hardest target ever. More resilient than Bittorrent and Freenet without single point of failure. If they decide to go after Bitcoin right now they will only fail and embarrass themselves.

Releasing technology on internet is like pooping your pants. No matter how hard you try, you will never get all back in. And you still are dirty.

So what you are saying is... in 2009, Satoshi Nakamoto took a MONSTROUS dump, and even all the governments of the world combined cannot wipe off the massive shit-smear he left on the sides of all their central banks?

 

[Stampbit]

They always go for easiest target. Liberty Reserve was easy, like e-gold and that Liberty Dollar or smth. Bitcoin is hardest target ever. More resilient than Bittorrent and Freenet without single point of failure.

Not really, they shut down the exchanges and its over for bitcoin.

[CasinoBit]

They always go for easiest target. Liberty Reserve was easy, like e-gold and that Liberty Dollar or smth. Bitcoin is hardest target ever. More resilient than Bittorrent and Freenet without single point of failure.

Not really, they shut down the exchanges and its over for bitcoin.

I have said it time and time again, Bitcoin isn't something which is meant to be integrated with financial institutions on the internet, in the future it will become something you can walk down the street and purchase.

[ThatDGuy]

They always go for easiest target. Liberty Reserve was easy, like e-gold and that Liberty Dollar or smth. Bitcoin is hardest target ever. More resilient than Bittorrent and Freenet without single point of failure.

Not really, they shut down the exchanges and its over for bitcoin.

That's like saying if they were able to shut down PirateBay then it would be "over" for Torrent files.

Reality: it wouldn't be.

[esenminer]

Just want to repeat that (allegedly) Liberty Reserve has been laundering money for the last 7 YEARS - it was laundering money before Bitcoin existed. The shutdown had nothing to do with Bitcoin.

[djalexr]

Releasing technology on internet is like pooping your pants. No matter how hard you try, you will never get all back in. And you still are dirty.

+1!!

the friends of bitcoin in high places may actually be cracking down on Bitcoin's competition because they actually WANT bitcoin to succeed.

may be a stretch at the current time to suggest "the powers that be" are actually in favour of bitcoin...however, the guys running the system are presumably at least semi intelligent in terms of how finance works - so i think it is conceivable that, provided regulation fails to stop bitcoin in its tracks in the fairly near future, we may reach a tipping point where the international banking community wakes up to its benefits and starts investing in and supporting bitcoin, in the same way they attempt to gain monopolies on gold, stocks, land and all other commodities.

if this point comes, the bitcoin system could end up becoming 'too big to fail' in a similar way to the current banking system and it will be impossible for anybody to stop its growth in the same way the current system has been impenetrable for centuries.

[esenminer]

They always go for easiest target. Liberty Reserve was easy, like e-gold and that Liberty Dollar or smth. Bitcoin is hardest target ever. More resilient than Bittorrent and Freenet without single point of failure.

Not really, they shut down the exchanges and its over for bitcoin.

That's like saying if they were able to shut down PirateBay then it would be "over" for Torrent files.

Reality: it wouldn't be.

I still don't believe that the government views Bitcoin in any way a threat to the current economic system.

1. If you purchase Bitcoin you need to use FIAT to get it.

2. If you mine Bitcoin and convert to FIAT the government will expect you to pay taxes on it.

3. If you mine Bitcoin and spend Bitcoin to buy goods and services then the government will expect you to pay taxes on the amount you've spent.

In all 3 scenarios nothing changes for the government - they collect taxes like they've always done and they regulate industries to make sure that they can collect those taxes like they've always done.

[ThatDGuy]

They always go for easiest target. Liberty Reserve was easy, like e-gold and that Liberty Dollar or smth. Bitcoin is hardest target ever. More resilient than Bittorrent and Freenet without single point of failure.

Not really, they shut down the exchanges and its over for bitcoin.

That's like saying if they were able to shut down PirateBay then it would be "over" for Torrent files.

Reality: it wouldn't be.

I still don't believe that the government views Bitcoin in any way a threat to the current economic system.

1. If you purchase Bitcoin you need to use FIAT to get it.

...

Under the assumption (which I'm not saying remotely possible, or a given) that BTC became a widely used currency, fiat could be theoretically removed from the equation.

At some point, though yes, they would likely just collect tax from BTC transactions.

Bitcoin stands to shake up the current economic system quite a bit before then, though...

[Peter Lambert]

Bitcoin is not having a war against anybody. Bitcoin does not give a shit what these people do.

Imagine the man at work, he does not notice the petty squabble of ants around his feet, neither does he care if the red ants or the black ants kill each other first. He just goes on his way. Bitcoin is as this man - the politicians and criminals may squabble back and forth but they make nary a dent in the blockchain before bitcoin flicks them off into the dustbin of history.

[esenminer]

They always go for easiest target. Liberty Reserve was easy, like e-gold and that Liberty Dollar or smth. Bitcoin is hardest target ever. More resilient than Bittorrent and Freenet without single point of failure.

Not really, they shut down the exchanges and its over for bitcoin.

That's like saying if they were able to shut down PirateBay then it would be "over" for Torrent files.

Reality: it wouldn't be.

I still don't believe that the government views Bitcoin in any way a threat to the current economic system.

1. If you purchase Bitcoin you need to use FIAT to get it.

...

Under the assumption (which I'm not saying remotely possible, or a given) that BTC became a widely used currency, fiat could be theoretically removed from the equation.

At some point, though yes, they would likely just collect tax from BTC transactions.

Bitcoin stands to shake up the current economic system quite a bit before then, though...

I think at first it's going to shake up with money services industry and that's who I would be worried about. Companies like Western Union (revenues of $5.7 Billion in 2012), PayPal (revenues of $5.9 billion, transfers of $145 Billion), SWIFT (revenues of $600 Million in 2011) and almost any bank who deals with wire transfers have a lot more to lose when Bitcoin is widely adopted. These will be the companies who will undoubtedly lobby governments to ban / restrict Bitcoins because it will put a huge dent in their revenues or if Bitcoin is adopted on a wide scale make them obsolete. Not complying with laws only gives them more ammunition.

I think it's naive to think that somehow Bitcoin lies outside of any laws or regulations. It is a revolutionary idea but an idea created in the context of our current political, social and economic systems. I believe it has the power to shape the future of those systems but we need intelligent and well thought out approaches to how to increase Bitcoin adoption not rhetoric about evil government or powers that be etc..

[bytemaster]

If this is bitcoins war against the competition, then I am here to provide it with some:   http://www.youtube.com/watch?v=RPbSaznUbg8&feature=youtu.be

If this works as I think it does ( and there is a 10 BTC bounty to convince me otherwise) then I will have just replaced Bitcoin, Mt.Gox, savings accounts, and the commodity / stock exchanges.   

Bitcoin's biggest competition  isn't the old IOU based economy, it is the potential for the development of an entirely trust-less economy based off of Bitcoin derived technologies.

[humanitee]

Silly thread.

I actually laughed out loud when I read OP.

No way this is happening.