The Government Cannot Outlaw Bitcoin, it's Impossible!

[BTC_Junkie]

America is a nation of the people, by the people. If your president are going to ban bitcoin, just go to the street and vote another candidate who are for bitcoin.

... With 1 election every 4 years its not very easy to do.

[tonto]

Not to mention most candidates ride the fence to get elected and then do what they want anyway (congress or the pres), or do whatever lobbyist pays the most money asks for

(edited)

[Rassah]

Bitcoin transactions will be added to the taxcode at some point.

Likely it'll be treated the same as any other foreign currency: you pay taxes on your profits when you convert them into your home country currency. (I suspect it should be treated like that already, especially if your profits are HUGE, and you want to stay safe and avoid IRS audits and jail)

[Elwar]

America is a nation of the people, by the people. If your president are going to ban bitcoin, just go to the street and vote another candidate who are for bitcoin.

LOL!!!

You must have read these United States' Constitution and thought that it had anything to do with our government.

Government is now of the corporations, by the corporations. And whichever corporations can spend the most on advertisements for presidential candidates which will sway the sheeple into voting for what they want wins.

See Germany circa 1940s...

[bitrebel]

Anyone care to explain here just how a government can attempt to outlaw bitcoin?

By outlawing the use of the concept rather than any particular implementation of it.

The law and associated penalties would only need be harsh enough to destroy market confidence.  It wouldn't take that much.

You cannot outlaw the use of a concept that injures nobody.
Destroying market confidence may be almost impossible as well, because no matter what anyone says, i'll always have bitcoins if I choose liberty over security.

[bitrebel]

I think the theory is that the governments will collude and force all supporting sites to shut down.  What happens when you are no longer to move money into and out of an exchange?  I know the long term hope is that we no longer will need exchanges, but I think it's a required mid term step.

I read this article about egold and it scared me.   http://www.wired.com/threatlevel/2009/06/e-gold/

In order to shut down all supporting sites, they would have to force foreign governments to work for them, to do their dirty work. I don't think Antigua is getting rid of their pro gambling laws because the US government is losing business to offshore entities acting illegally against the interests of American citizens. So, they may be able to shut down Tradehill, but they cannot touch Mt Gox from the US, unless they go after Mark personally, then there are always more exchanges.

E-Gold was stored physically somewhere, was not it's own currency, since it took US deposits to convert, it could actually be considered a money laundering operation. Bitcoin is not. Your not buying something that represents currency, it's actual currency.

[bitrebel]

In order for the government to effectively outlaw bitcoin, they would have to outlaw the exchanging of encrypted numerical data. Nothing short of this, could effect bitcoin, legally.

if I follow your reasoning, in order for the government to effectively outlaw violence, they would have to outlaw the exchange of kinetic energy ?

Violence has always been controlled by societies. People cannot be allowed to go around injuring others irresponsibly. That is a real, REAL crime. It makes no sense to compare this to bitcoins.

[Rassah]

Anyone care to explain here just how a government can attempt to outlaw bitcoin?

By outlawing the use of the concept rather than any particular implementation of it.

The law and associated penalties would only need be harsh enough to destroy market confidence.  It wouldn't take that much.

You cannot outlaw the use of a concept that injures nobody.

They did it with "gay" for a few decades/centuries, so why not?

[bitrebel]

Just look at money laundry laws, many of them apply to Bitcoin unmodified. Any exchange or barter of valuable assets (gold, diamonds, currency, real estate, casino chips etc.) is money laundry if done with the purpose of misrepresenting the source or destination of wealth.

Since Bitcoin transfers shield the sender and the receiver from each other, they fit by default the broad definition of money laundry. It's easy to target any on-line shop or non-shady exchange. They could discourage the wast majority of US based shops from accepting Bitcoins by merely posting a message on the IRS site that accepting such payments without complying to know-your-customer is illegal. Nobody fancies a trip to "pound me in the ass" land for the sake of a few extra customers.

Would that destroy the concept of distributed currency ? I don't think so, but yet again, what good is an electronic currency that can't be used legally online ? It may still be significant for potheads, traffickers and other persons dealing in the black market, but not for most regular people.

The terms "transaction" and "financial transaction" are defined in § 1956(c)(3) and (4). In short, virtually anything that can be done with money is a financial transaction—whether it involves a financial institution, another kind of business, or even private individuals. Thus, the simple transfer of cash from one person to another may constitute a money laundering offense. See United States v. Otis, 127 F.3d 829 (9th Cir. 1997) (drug dealer's delivery of cash to a money launderer is a financial transaction). Other examples abound in the case law. See United States v. Herron, 97 F.3d 234, 237 (8th Cir. 1996) (wire transfer through Western Union is a financial transaction); United States v. Rounsavall, 115 F.3d 561 (8th Cir. 1997) (writing check to purchase cashier's checks is financial transaction); United States v. Brown, 31 F.3d 484, 489 n.4 (7th Cir. 1994) (processing credit card charges involves "payment, transfer, or delivery by, through, or to a financial institution").

Note that the transaction does not need to involve money or other monetary instruments. Simply transferring title to certain kinds of property, such as land or vehicles, falls within the statutory definition of a financial transaction. See United States v. Hall, 434 F.3d 42, 52 (1st Cir. 2006) (recording a mortgage is a financial transaction); United States v. Carrell, 252 F.3d 1193, 1207 n.14 (11th Cir. 2001) (transfer of title to real property is a financial transaction under section 1956(c)(4)); United States v. Westbrook, 119 F.3d 1176 (5th Cir. 1997) (purchase of a vehicle is a financial transaction because it involves transfer of title); 18 U.S.C. § 1956(c)(4)(A)(iii)

UNITED STATES ATTORNEYS' BULLETIN SEPTEMBER 2007

All of these laws target something called "Financial Instruments" of the United States, that involve financial transactions.

Encrypted numbers are not even physical, so they do not actually exist, in fact.

You cannot tell people of a nation, that they cannot create their own currencies. Alternative currencies are completely LEGAL in the United States. Even less effective, is to tell the people of a nation like the US or Europe, that using encrypted numbers agreed upon by consensus, cannot be used to trade and exchange items.

I have studied law for years now. Not as a lawyer but as a freedom fighter.
One thing I know, by studying laws, is that in order to outlaw something, you have to target certain actions and tie them to something that should not be done. If I were a legislator, I would have to write the law something like this.

"It shall now be considered against the laws of the United States for any person to transmit encrypted data with the knowing and willful intention to disguise the source and destination of that data".

Nothing short of this, will outlaw bitcoin.

[bitrebel]

GOVERNMENT CAN DO WHATEVER IT WANTS

for real. unfortunately.

People are the REAL government, in fact, not fiction. Real people can do even more than government because real people make up government and real people ARE IN FACT, Government.

So, I agree, the people can do whatever we want!

[bitrebel]

Anyone care to explain here just how a government can attempt to outlaw bitcoin?

Something like:


1) all transactions must be denominated in and carried out using our legal tender

2)  anyone doing fx or any international trade  must be licensed,   and per the terms of the license only approved units of trade may be used.

Total FAIL.

Currently, it's legal to create your own alternative currency. There are 100's already throughout the US. If it was possible to outlaw them, the government would have already.

Forex is not bitcoin, again, it relates specifically to "financial instruments" and "financial transactions" which bitcoin are neither, in fact, or legally considered. And they cannot ever be considered legally "financial instruments" or "financial transactions".

[bitrebel]

Which government?

The one that shut down ThePirateBay.org.

Bitcoin does not sit on a server somewhere.
P2P has not gone anywhere just because Napster was taken down or PirateBay was seized.

[bitrebel]

Bitcoin transactions will be added to the taxcode at some point.

Impossible!

You cannot add "Beanie babies" to the Tax Code and you cannot add an intangible series of numbers as a taxable issue. Taxes are charges of interest on money loaned to the people. Example, we only started the Income Tax after the Federal Reserve Act, because the tax was to collect interest on the national debt. So, so cannot take something unrelated to the economy and tax it. You can tax sales, so people selling bitcoins from their business, need to pay taxes on those sales. But bitcoins themselves cannot be taxed. People selling bitcoins to each other without businesses are not taxable sales. Just like you would not need to collect tax at a garage sale.

[bitrebel]

Anyone care to explain here just how a government can attempt to outlaw bitcoin?

By outlawing the use of the concept rather than any particular implementation of it.

The law and associated penalties would only need be harsh enough to destroy market confidence.  It wouldn't take that much.

You cannot outlaw the use of a concept that injures nobody.

They did it with "gay" for a few decades/centuries, so why not?

Good Point! But were not living in the Dark Ages anymore, either.

[twobits]

Anyone care to explain here just how a government can attempt to outlaw bitcoin?

Something like:


1) all transactions must be denominated in and carried out using our legal tender

2)  anyone doing fx or any international trade  must be licensed,   and per the terms of the license only approved units of trade may be used.

Total FAIL.

Currently, it's legal to create your own alternative currency. There are 100's already throughout the US. If it was possible to outlaw them, the government would have already.

Forex is not bitcoin, again, it relates specifically to "financial instruments" and "financial transactions" which bitcoin are neither, in fact, or legally considered. And they cannot ever be considered legally "financial instruments" or "financial transactions".

Bzzzttt..... wrong answer.

The fact something is legal now is irrelevant to the fact it could be made illegal later.  As a small example, consider private ownership of gold.   Now go read http://en.wikipedia.org/wiki/Executive_Order_6102  .  If they were willing to make it illegal and seize all the gold in the county, they sure as heck would have no qualms about making currently legal alternative currencies illegal.

As for your second paragraph, it says nothing.  It changes nothing  about the fact that they can make any trading outside of approved denominations illegal.  

So ...  yeah, you predicated your response right from that start.   It was total fail.

[Dansker]

Bitcoin transactions will be added to the taxcode at some point.

It already is in most countries...

[bitrebel]

Bitcoin transactions will be added to the taxcode at some point.

It already is in most countries...

Please cite your evidence for this, or I will assume you are bluffing. Show me where bitcoins are added to a country's tax code.

[twobits]

Bitcoin transactions will be added to the taxcode at some point.

It already is in most countries...

Please cite your evidence for this, or I will assume you are bluffing. Show me where bitcoins are added to a country's tax code.

They would fall either under the barter or the capital gains codes.

[bitrebel]

Bitcoin transactions will be added to the taxcode at some point.

It already is in most countries...

Please cite your evidence for this, or I will assume you are bluffing. Show me where bitcoins are added to a country's tax code.

They would fall either under the barter or the capital gains codes.

It cannot be. It has to be tied to something, and it's it's own currency and value changes daily.

[twobits]

Bitcoin transactions will be added to the taxcode at some point.

It already is in most countries...

Please cite your evidence for this, or I will assume you are bluffing. Show me where bitcoins are added to a country's tax code.

They would fall either under the barter or the capital gains codes.

It cannot be. It has to be tied to something, and it's it's own currency and value changes daily.

And yet it is.    Call up the IRS and ask them if using a different currency makes things untaxable.   How much to you want to bet on the answer?

http://www.irs.gov/businesses/small/article/0,,id=113437,00.html for example shows they want taxes dollars or not on exchanges.