The SEC Shows Why Bitcoin is Doomed.

[QuestionAuthority]

I just read this Timothy Lavin Bloomberg story and wondered if it's been discussed yet. I can't seem to find anything on it. If it has please direct me to the thread. The comments at the bottom are as interesting as the article. He raises some interesting points considering all the recent action from government agencies lately (like Mike Caldwell's recent letter forcing him to close up shop). Will governments simply regulate Bitcoin to death like so many good ideas of the past? Will business competition cease to make Bitcoin a worthwhile alternative? Is this just another naysayer that is missing the "point" of Bitcoin? Is the "point" to provide an outlet for crime or does Bitcoin have a place alongside other payment systems and is simply waiting to claim its market share?

http://www.bloomberg.com/news/2013-08-08/did-the-sec-just-validate-bitcoin-no-.html

[LiteCoinGuy]

thats from the Aug 8, 2013.

also:

in my opinion not a special article.

yes, its a high risk investement if you see it like this. you probably lose all money. you should sell when you dont believe in it.

[QuestionAuthority]

thats from the Aug 8, 2013.

also:

yes, its a high risk investement if you see it like this. you probably lose all money.

Yeah, I know how old it is but things have happened like attempting to put Casascius Coins out of production with threats. The government knows how expensive it is to be in a financial services business. So the info might be even more relevant today.

Their are plenty of high risk investments. Most aren't teetering on being illegal.

[QuestionAuthority]

Someday food will need to be purchased in the black market.

I think gasoline will be first.

[Its About Sharing]

Regarding Mike and the Casascius coins, Mike just chose not to get the licensing. (Which is proving great for those who already have his coins as the price has of course shot up. But bad for newcomers).
Titan has the licensing and they have also raised prices A LOT. Go figure. I do think Mike will get the licensing, at least in some states as he was doing just too well imo.

SEC stopping BTC? LOL, please, this isn't just about America, much less regulations...

[EvilPanda]

Then let's just build bunkers and store food because everything may become illegal. Making alcohol illegal didn't stop people from drinking it, chill.

[QuestionAuthority]

Regarding Mike and the Casascius coins, Mike just chose not to get the licensing. (Which is proving great for those who already have his coins as the price has of course shot up. But bad for newcomers).
Titan has the licensing and they have also raised prices A LOT. Go figure. I do think Mike will get the licensing, at least in some states as he was doing just too well imo.

SEC stopping BTC? LOL, please, this isn't just about America, much less regulations...

Of course, that's the point of the article. Did you read it?

SEC isn't attempt to stop Bitcoin. Again, that's what they are talking about. Bitcoin isn't about America. It's about India, the UK, China, the EU and everywhere else. What's happening in India and China right now?

[Peter R]

thats from the Aug 8, 2013.

also:

yes, its a high risk investement if you see it like this. you probably lose all money.

Yeah, I know how old it is but things have happened like attempting to put Casascius Coins out of production with threats. The government knows how expensive it is to be in a financial services business. So the info might be even more relevant today.

Their are plenty of high risk investments. Most aren't teetering on being illegal.

I was frustrated when I first learned of the letter sent to Mike Caldwell of Casascius Coins.  

Upon reflection, FINTRAC was just doing its job.  Casascius Coins is a money transmitter.  I know the argument: people just sent him 1 BTC plus a fee for packaging it into a nice physical coin, and Mike sent them back their own bitcoins--harmless.  But it's only harmless because we all trust Mike.  Potentially, a less scrupulous person in the same business could keep a log of all the private keys.  Two years down the road, he drops the A-bomb and steals all the unspent coins.  I wanted to make it very clear that I do not necessarily agree with the MSB laws but they are designed so people that are trusted with other people's money can be more easily held accountable if something goes wrong.  

Think about it like this: say Mike "open-sources" his Casacscius Coins so that anyone can easily make them.  You wouldn't trust buying one from someone you met at a bitcoin meetup, would you!  The current coins have value because we know that Mike is honest.  

Using similar logic, I expect eventually all non-open source services/products that could potentially steal a users funds will be regulated in a way similar to MSBs.  Even something like the Trezor (if purchased as a complete device, not as hardware to which you load open-source firmware) I could see regulated in the USA because it's possible that the Trezor has hidden code that eventually steals peoples coins.  

[QuestionAuthority]

thats from the Aug 8, 2013.

also:

yes, its a high risk investement if you see it like this. you probably lose all money.

Yeah, I know how old it is but things have happened like attempting to put Casascius Coins out of production with threats. The government knows how expensive it is to be in a financial services business. So the info might be even more relevant today.

Their are plenty of high risk investments. Most aren't teetering on being illegal.

I was frustrated when I first learned of the letter sent to Mike Caldwell of Casascius Coins.  

Upon reflection, FINTRAC was just doing its job.  Casascius Coins is a money transmitter.  I know the argument: people just sent him 1 BTC plus a fee for packaging it into a nice physical coin, and Mike sent them back their own bitcoins--harmless.  But it's only harmless because we all trust Mike.  Potentially, a less scrupulous person in the same business could keep a log of all the private keys.  Two years down the road, he drops the A-bomb and steals all the unspent coins.  I wanted to make it very clear that I do not necessary agree with the MSB laws but they are designed so people that are trusted with other people's money can be more easily held accountable if something goes wrong.  

Think about it like this: say Mike "open-sources" his Casacscius Coins so that anyone can easily make them.  You wouldn't trust buying one from someone you met at a bitcoin meetup, would you!  The current coins have value because we know that Mike is honest.  

Using similar logic, I expect eventually all non-open source services/products that could potentially steal a users funds will be regulated in a way similar to MSBs.  Even something like the Trezor (if purchased as a complete device, not as hardware to which you load open-source firmware) I could see regulated in the USA because it's possible that the Trezor has hidden code that eventually steals peoples coins.  

Those are good points. Maybe I shouldn't have used Mike as an example. Does anyone know what happened to Bitinstant? Governments don't need to make anything illegal to make it unusable or unprofitable.

[Elwar]

Bloomberg and BusinessInsider are sources of FUD.

Most likely they are so invested in the big business/big government marriage that they are merely mouth pieces for those groups.

[ixne]

Using similar logic, I expect eventually all non-open source services/products that could potentially steal a users funds will be regulated in a way similar to MSBs.

FinCEN's problem with Casascius has nothing to do with stealing buyer funds. They see his business as a laundering service in that users send him bitcoins and he sends bitcoins back in a new, unconnected address.  In other words, this action has nothing to do with "protecting" buyers and everything to do with tracking money.

As for "regulating everything to death," you could make the same argument to say that they're trying to kill the dollar. Every action FinCEN has taken against Bitcoin-related businesses could and would be taken against someone doing the same thing with dollars.

China forbid money transmitters from dealing in Bitcoin because Bitcoin was so efficient in skirting currency exchange controls. It was a reflection of Bitcoin's utility, not its weakness. China can't shut down Bitcoin, and I expect that if it is not brought into the fold somehow in China there will be a thriving black market in Bitcoin given the huge pressure that existing currency controls have built up - even if it means transmitting private keys by mail rather than working through the blockchain.

[QuestionAuthority]

Bloomberg and BusinessInsider All mainstream media outlets are sources of FUD.

Most likely they are so invested in the big business/big government marriage that they are merely mouth pieces for those groups control the world. Are they going to let us play in their playground or should we go underground right now?

FTFY

[QuestionAuthority]

Using similar logic, I expect eventually all non-open source services/products that could potentially steal a users funds will be regulated in a way similar to MSBs.

FinCEN's problem with Casascius has nothing to do with stealing buyer funds. They see his business as a laundering service in that users send him bitcoins and he sends bitcoins back in a new, unconnected address.  In other words, this action has nothing to do with "protecting" buyers and everything to do with tracking money.

As for "regulating everything to death," you could make the same argument to say that they're trying to kill the dollar. Every action FinCEN has taken against Bitcoin-related businesses could and would be taken against someone doing the same thing with dollars.

China forbid money transmitters from dealing in Bitcoin because Bitcoin was so efficient in skirting currency exchange controls. It was a reflection of Bitcoin's utility, not its weakness. China can't shut down Bitcoin, and I expect that if it is not brought into the fold somehow in China there will be a thriving black market in Bitcoin given the huge pressure that existing currency controls have built up - even if it means transmitting private keys by mail rather than working through the blockchain.

Good point. All they are doing is their job which can make it difficult for any business to survive. Can Bitcoin then remain a viable alternative for the main stream financial services user or will it always remain fringe because of the costs involved?

[marcus_of_augustus]

SEC has little to zero jurisdiction outside the facist USA .... you need to alter your title to "Why Bitcoin is Doomed in USA" ... sub-title "And Other Like-Minded Backward Repressive States"

The current clamping down on an Internet communications protocol will be looked back upon in the future as an equivalent historical transgression equal in insanity to the Spanish Inquisition driven by the Catholic Church or the colonial slavery era.

[BCB]

Bitcoin can only be a "large scale" alternative to the extent that is fits in with the existing regulations and legislation in the jurisdiction in which it is used.

For the record FinCEN's mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.

The State regulations are concerned with safety and soundness and consumer protection.

Also, legitimate Bitcoin business should be concerned with the Consumer Financial Protection Bureau (CFPB) which was created by the Dodd Frank act and includes a whole host of consumer protection items that will affect the buying and selling of bitcoin.

Also the IRS has not weighed in yet on taxing Bitcoin.  Looking for guidance coming before April 15, 2014.

[QuestionAuthority]

SEC has little to zero jurisdiction outside the facist USA .... you need to alter your title to "Why Bitcoin is Doomed in USA" ... sub-title "And Other Like-Minded Backward Repressive States"

The current clamping down on an Internet communications protocol will be looked back upon in the future as an equivalent historical transgression equal in insanity to the Spanish Inquisition driven by the Catholic Church or the colonial slavery era.

That's actually not my title. It's the title of the story on Bloomberg. Unfortunately, the "America and the Other Like-Minded Backward Repressive States" control most of the worlds land mass. Besides we shouldn't ignore the people of repressive countries. They're the ones that need Bitcoin the most.

Agreed, it's insane.

[QuestionAuthority]

Bitcoin can only be a "large scale" alternative to the extent that is fits in with the existing regulations and legislation in the jurisdiction in which it is used.

For the record FinCEN's mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.

The State regulations are concerned with safety and soundness and consumer protection.

Also, legitimate Bitcoin business should be concerned with the Consumer Financial Protection Bureau (CFPB) which was created by the Dodd Frank act and includes a whole host of consumer protection items that will affect the buying and selling of bitcoin.

Also the IRS has not weighed in yet on taxing Bitcoin.  Looking for guidance coming before April 15, 2014.

That's right and that's my concern. The battery of, to date, unused regulations is extensive. No doubt Bloomberg simply parrots what they believe their readership wants to hear but they made me think to current events and future disaster. Preparedness comes from not hiding your head in the sand and saying everything will be just fine because we have the rest of the world. Develop regulation resistive businesses now instead of when it's too late.

[BCB]

Exactly.

Instead of posting rants on bitcointalk.org we have to engage the regulators.  Are you familiar with Millybitcoin/Atlantic Bitcoin?  He recently challenged the March 18th 2013 FinCEN guidence that says ALL miners are "moneytransmitters" (a legal term) and won.

http://www.slashgear.com/bitcoin-miners-do-not-have-to-register-as-money-transfer-services-ruling-28310218/

I also know of another bitcoin business who challenged this guidance and won but the information is not public yet.

[BCB]

Also, have you read the transcripts or watched the recent Federal Senate Hearings?

http://www.hsgac.senate.gov/hearings/beyond-silk-road-potential-risks-threats-and-promises-of-virtual-currencies
http://www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=955322cc-d648-4a00-a41f-c23be8ff4cad

Law Enforcement and Regulators clearly state that bitcoin is NOT illegal it is only the illegal use that they are concerned about.

[Its About Sharing]

Regarding Mike and the Casascius coins, Mike just chose not to get the licensing. (Which is proving great for those who already have his coins as the price has of course shot up. But bad for newcomers).
Titan has the licensing and they have also raised prices A LOT. Go figure. I do think Mike will get the licensing, at least in some states as he was doing just too well imo.

SEC stopping BTC? LOL, please, this isn't just about America, much less regulations...

Of course, that's the point of the article. Did you read it?

SEC isn't attempt to stop Bitcoin. Again, that's what they are talking about. Bitcoin isn't about America. It's about India, the UK, China, the EU and everywhere else. What's happening in India and China right now?

I had not read it but gave it a read and am still not clear on it! These titles are just getting a bit old and I once again was only partly pulled in.

Regarding India and China, first India, I think they are trying to get a grasp on what BTC is. They seem a bit against it.
China on the other hand, and shockingly so, seem to just want to separate it from their money system and categorize it as a commodity. I'm still shocked by it.
It will take time to play out and I think the run continues once things get clear in China (then later, much later, India). Of course, it can get ugly in either case, but at least with regards to China, I'm not so worried.

Your perspective on India and China?