FBI is after bitcoin? Good!

[Wary]

You all know the yesteday's news: http://www.reddit.com/r/Bitcoin/comments/1k9jhv/congress_appropriations_bill_directs_fbi_to/
Congress wants FBI to investigate bitcoin threat and report what resources FBI would need to contain it.

What would any sane bureaucrat would answer to it?
Yes, sirs, BTC is a problem. Yes, sirs, we work on it. No sirs, there is not enough people and money. We need more. Heaps more! Because the problem is HUGE! We need to create a special Anti-Bitcoin Department and make me the head of it!

So, the FBI will have vested interest in BTC: It will want bitcoin to be a big problem. This is both a good and bad news.

The bad news is that FBI need to bitcoin to be a problem. Sorry, Gavin, but all efforts of "upstanding, law-abiding, clear-thinking citizens doing interesting things with Bitcoin" will not help. Bitcoin won't be allowed to become a respectable, reputable business. It will be pushed, with all might of "coordinated Federal response" to the area of pedo-terro-launder-underminers. Because FBI will want bitcoin to be there.

The good news is that FBI will want bitcoin to be. The end of BTC will mean the end of Anti-BTC Department. And the Anti-BTC department will not want to die, it will want to live and grow! So the FBI will want bitcoin not just to be, but to be a big problem. Yes, they will push us underground, but they will help us grow down there!

And a year from now the head of Special Anti-BTC FBI Department will be saying something like this: "The bitcoin problem is solved, I can be fired. We were fighting like lions, but what could we do? We were outnumbered because we were understaffed and underfunded! I warned Congress, but they didn't listen! They gave me only a half of what I was asking for! And as a result for this year the bitcoin has grown tenfold! And my secret personal stack of coins have ghown tenfold as well. Now we need ten times more staff and ten times more money!"

tl; dr: FBI will push BTC undergroud, but will help it grow.

[SeanArce]

Any publicity is good publicity

[neordicICE]

Typical american institutions. The only threat is national debt and colapse of current monetary system

[elor70]

im happy i dont live in the us..

[totemITnow]

im happy i dont live in the us..

+1

Must be shame to be US citizen

[pacojones]

im happy i dont live in the us..

I've thought about moving myself!

[Wary]

Any publicity is good publicity

Sure, but there is more to it. The point is that FBI will want BTC to grow.

[og kush420]

none of what you said will happen. in my opinion your assumptions are irrational.

if something similar would happen(it will not), the FBI would slowly close bitcoin. juicing every dollar out of the government and only doing just enough to keep their department open. if they completely fail, they will just be closed.

[tvbcof]

The OP is very high quality observation and analysis, and very prescient actually.  Sad (in a way) but very likely quite true.

Indeed it has seemed to me at times over the past few years that 'they' were actually propping the solution up and incubating it if anything.  Most clued in people see distributed crypto-currencies as a stunningly powerful thing fairly early on in their research.  It would not surprise me in the least if fighting Bitcoin were anticipated by some as a rich vein of revenue and power if it could just get off the ground.

[countryfree]

...on the nature and scale of the risk posed by such ersatz currency...

I know BTC is safe, but it will more and more difficult to offer exchange services in the U.S.

[drawingthesun]

If the busybodies, bureaucrats and lawyers take Bitcoin away from the American people, for their safety I would be very happy.

Hopefully the next silicon valley will be forced to form outside of the United States and finally bring an end to American technology dominance.

Just like the Government has killed the cloud industry (NSA Prism) in the states they now stand to destroy one of the next tech paradigms.

Of course for people outside the United States this could not be more welcome.

Like I predicted a while ago, the US will eventually be destroyed from the inside out by vile lawmakers and clueless policy setters. People who hold power because it makes them feel better will be the downfall of the US and the faster it happens the better.

So US lawmakers, please ban all the Bitcoins, make the internet slower, stop all pornography and make sure no US citizen can send a encrypted email or wander onto a bad internet page. Ban it all and make those Americans safe!

Thanks, the World.

[cbeast]

While all this brouhaha sounds ominous, there is little they can really do. There is no legal standing (nor logical reasoning) to consider Bitcoin any more of a threat than any other payment system. There will soon be a tipping point where government is seen as bullying Bitcoiners and some other nation will step in as a voice of reason. Smart money will go there (hello France, Iceland, Japan, India, and others). Until there is more than breast-beating, this is a good time to get cheap bitcoins.

Here's a test: One of the greatest potential threats about Bitcoin is *gasp* kidnapping with a ransom in Bitcoin. It's the perfect crime, right? Yet nobody has done so. Why? Because Bitcoin is not good for that. If Bitcoin was so great for narcotics, then why aren't the cartels using it? Because it's not good for that. Bitcoin is not good for crime. It is not anonymous. It *is* private. There is a difference. Maybe they are more afraid of privacy than anything else. Are you listening NSA?

[Wary]

tvbcof, Holliday

Thanks

in my opinion your assumptions are irrational.

I assume actors' rational self-interest. Departments want to grow. Parkinson's Law, you know. They grow if they can justify it to the tax-payers. Anti-BTC department will have very good justifications.

FBI would slowly close bitcoin. juicing every dollar out of the government and only doing just enough to keep their department open.

Person that "just doing enough" can't become the head of a department. Not ambitious enough. And there are ambitious deputies anyway.

if they completely fail, they will just be closed.

But who is talking about failure? Billlions of $ confiscated, millions of captives in prisons - are not signs of failure, but signs of great victory, aren't they?   Such victories get rewarded not by closures, but by promotions and fundings. That's how war on drugs is waged. Any reasons to believe that war on bitcoin will be different?

[Elwar]

The war on bitcoins will do to the Bitcoin price what the War on Drugs has done to the price of drugs.


We are all about to get stinking rich.

[Wary]

The war on bitcoins will do to the Bitcoin price what the War on Drugs has done to the price of drugs.

We are all about to get stinking rich.

I'm not an economist, but it seems to me that it is not quite true. If exchange is made more difficult, buyer does pay more. But the seller on average does not receive more. The difference goes to state or get wasted (Today you sell for $$$, tomorrow you get jail and confiscation. Or get shot by competitors). I wouldn't like to become that rich.  

Although real price will grow as well, because of side-effects of the war, such as publicity.

[Wary]

There is no legal standing (nor logical reasoning) to consider Bitcoin any more of a threat than any other payment system. There will soon be a tipping point where government is seen as bullying Bitcoiners and some other nation will step in as a voice of reason. Smart money will go there (hello France, Iceland, Japan, India, and others).

Agree, bitcoin is no more threat to a citizen than any other monetary system. But it is a threat (or at least a very big nuisance) to the states. That's why they will try to persuade their citizens that BTC is a theat for them as well. And for such persuagion you don't need logical reasoning, you need an emotional picture. Such as kidnapped child or blown-up skyscraper. First - hypotetical cases, then, when BTC grows bigger - real cases.

As for "France, Iceland, Japan, India and others", printing money is a source of income for all states (including ones you've listed). Why would they voluntary forfeit it? Or who would force them? Voters? What percentage of voters understand that inflation is a tax?

That's why I'm glad that we may get an ally in the enemy's camp, namely the FBI's Anti-BTC Department. 

[tclo]

im happy i dont live in the us..

It used to be pretty good but yeah, now it does sort of suck..  I mean it's still better than Somalia or Iran, but I suspect not nearly as good as the Netherlands or New Zealand and most of western europe.

But the evil interests have taken control of this country...they own most everything and always getting more and they don't do it by "playing fair".  If they have to, they will make a law that equates bitcoin with heroin or cocaine.  Yes those are still around but definitely underground and relatively dangerous to be buying or selling.

[tclo]

While all this brouhaha sounds ominous, there is little they can really do. There is no legal standing (nor logical reasoning) to consider Bitcoin any more of a threat than any other payment system.

You don't need "legal standing" when you can just change the laws.  Then you are suddenly standing on very solid ground.

[Elwar]

difference goes to state or get wasted (Today you sell for $$$, tomorrow you get jail and confiscation. Or get shot by competitors). I wouldn't like to become that rich.  

You gotta get bitcoins first. Then when you get the bitcoin, you get the power. Then when you get the power, then you get the woman.

[DobZombie]

Who cares what happens in the United States.

I don't