UPDATE: I've bumped this thread in light of the recent events with Mt Gox which may catalyze the kind of draconian regulation we do not want. Now more than ever is the time for Bitcoin businesses to federate and set their own standards instead of a bureaucrats that have scant idea of what a Bitcoin truly is.
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Let me start by saying I find the idea of regulating Bitcoin a tenuous one at best, but the biggest argument that the pro regulation crowd has in their favor is that it will afford Bitcoin greater legitimacy and accountability as it moves towards mainstream adoption. This may be all well and good, but the biggest problem I have is just who would be providing this legitimacy and accountability.

Already we are seeing pro crowd individuals and companies reaching out to government almost begging for Bitcoin regulation. They are convinced that the legitimacy that would come from it would better allow Bitcoin to spread and support whatever business model they happen to believe in as well as other social benefits to prevent the abuse of Bitcoin.

And they have a point.

There are specific issues around the use of Bitcoin that deserve an answer, things like the sale of child pornography that everyone would agree needs to be stamped out with extreme prejudice. Bitcoin itself is innocent in all this, it's purely a means to exchange value and no different to the dollar note in that regard but unfortunately these issues are going to be repeatedly raised by regulators and anti-bitcoin groups and used to beat Bitcoin over the head with to support their argument and goal of ultimately having Bitcoin banned or regulated into near uselessness.

This is not an ideal outcome, but the thing is if we look back in history something very similar has happened before.

I refer to the inception of the Comics Code Authority back in the 1950's. Have a look at the Wikipedia article about it if you want to know the details: http://en.wikipedia.org/wiki/Comics_Code_Authority

In short, back in the early days of the comic book industry there were public concerns about the sexual and violent content of comic books and the influence they had on young people. This "wild west" of comic publishing led to - like Bitcoin - Senate inquiries - which gave real concern from publishers that they would become subject to draconian regulation that went far beyond banning the areas of concern but severely limit the creativity and stories that could be told. As a result of this the comic book publishing industry pre-empted laws and regulation by creating a self-regulating code that was run by the comic publishing community and set the standard by which stories and comics would be produced. This body became known as the Comics Code Authority and provided a means for the publishers to deal with the worst of the rogue publishing elements and blunting the argument of the biggest anti-comic proponents. The code remained in place for several decades, but eventually a shift in community attitudes led to it's abandonment by most publishers a decade ago.

So what does this mean for Bitcoin?

Perhaps we should let history be our guide and look at creating a similar institution - a Bitcoin Code Authority under the trusted auspices of say the Bitcoin Foundation. If a common code that address the worst negative criticisms against Bitcoin could be put into play with a seal or badge that business display on their sites to indicate voluntary adherence to the code this may go a long way towards blunting the biggest arguments of Bitcoin's biggest critics and allow the community to retain control of the situation and avoid the risk of becoming over-regulated by government.

I am not advocating this lightly and while it isn't designed to address person-to-person transaction issues it would go a long way to protecting the embryonic Bitcoin marketplace as it develops. And like the history of comic books - one day when the world is more enlightened and used to cryptocurrency we may be able to quietly do away with it completely.

Thoughts everyone?

Wonderful; we'll finally be able to fool people into thinking Bitcoin isn't being used for nefarious purposes.  Even when it is.

I've edited and bumped my original post follow the events of the past week with MtGox. There is a perfect storm forming in the path of Bitcoin with mainstream media just beginning to report on the situation, we need to be prepared for the worst.

One would hope the industry comes up with a set of rules that can prevent a situation like this again. Like setting limits on how many BTC can be stored in a single wallet, implementing M of N keys where the authority holds a shared key in trust, regularly signing public audits using their keys as proof of control.

This is all about putting good Bitcoin business practice in place and making it as publicly accountable and verifiable as the blockchain itself is.

The CryptoCurrency Council, the council would design regulations that would be voluntarily adopted by those who seek certification from the CCC (cryptocurrency community council).

The council would essentially serve as an example and vehicle for integrity in the cryptocurrency industry.  

Yes it is centralized, however it would have a decentralized feel since it would be made up of people from all over the world, and the majority of decisions would be determined by vote

In this way the CCC can experience and recommend thought their certification process good businesses (and pros), so that all cc users can have easier and safer way do do cc business.

that individualistic mentality isn't the key in a community driven industry and community

I agree that there needs to be a cryptocurrency school, and perhaps even a cryptocurrency university, complete with cc professors, providing cc degree, and certifications however an endeavor such as bitcoin which is just one part of a much larger system of coins will need specialization in order to maximize resources.

It's ridiculous to need to have 3 computers, cold and hot wallet storage, 2 level verification on every account, because they system is so corrupt.  The system itself needs more security, accountability, self-regulation, verification, validation, valuation, certification, assurances, insurances, guarantees, and integrity. 

Yes, it is the TIME !

And I want to be vice-president of this Bitcoin Code Authority.
Vote for me !

bounty: 1 DOGE per 1 vot !  I will open soon even a faucet on my webpage !

The only regulation that would make sense would be some kind of self regulation based on math and p2p networking.
Until someone finds a way to make that happen, we got nothing.

Seriously, the regulation people are talking about belongs to the old world. It has no value when it comes to crypto currencies.

What about individual regulation? If you don't want to lose your BTC don't deposit it anywhere you don't own the private keys, simple. If one prefer a different regulation, one may just deposit it anywhere even not owning the private keys.

Just make your own set of rules whatever it be and take the responsability for what you do.

without intergrity you could loose your btc BEFORE you get it, there have been many miners burned by mining pools
there are developers who have devised wallets that steal your coins once it reaches a certain level
there are developers who create websites that offer you free coins but place viruses on your computer that raid your wallets

at every turn you could lose your coins, your coins are vulnerable as long as they are connected to the internet and useless as long as they are not connected to the internet, so at some point in order to used them you must expose them to many risks.

There are tons of on and offline p2p scams.  

if you think there is any safe point in the btc system you need to remove your money from it