Some thoughts on Bitcoin regulation...

[asdf123]

I realise there are bitcoin users who are libertarians or crypto-anarchists, and they tend to reject all regulation.  They seem to desire that bitcoin forever remain underground.  Or, if any of them ever think regulation is a good thing, it would only be because they believe any attempted regulation of Bitcoin would ultimately serve to drive Bitcoin further underground, where they want it to stay.  Until of course the global revolution, when it can go mainstream because mainstream will then mean mainstream in a new world order of decentralized everything?

That's one view... but it certainly isn't mine.

Ideologically, I do see dangers in centralised power structures and hierarchical authorities.  But I see benefits there too, provided sufficient checks and balances are in place to help curb abuse of power.  No system will prevent or catch all abuses.  There's no perfect system.

I want Bitcoin to go mainstream, for the benefits it offers people as a free payment system. The Bitcoin decentralized network and the way it's possible to trust it because of how it's set up is  a really clever computer science invention.  But I don't deny a role in society to centralised authority as well.  I don't see the two as mutually exclusive.

But whatever your political ideology, I think we have to face the fact that Bitcoin is not going to go mainstream without going through a process of regulation.  Mainstream Bitcoin means regulated Bitcoin.  That need not break the benefits of Bitcoin if it's done carefully.

Governments have a legitimate interest in curbing money laundering, because of the crime that is facilitated by such money laundering.  Yes, I know the worst culprits in terms of scale are the banks who are too big to fail, and too big to jail.  And yes, it is hypocritical of authorities to go after the small time Bitcoin money launderer, but give a free pass to the major bankster money launderer. But the ideal solution is not to give a free pass to both, it's to go after both with the full force of the law.

If Bitcoin regulation is tuned appropriately, I think regulation could be a very positive development.  I think it's important that Bitcoiners who aren't crypto-anarchists are willing to engage in the process of helping authorities to appropriately regulate Bitcoin.

Maybe some of you want to use Bitcoin to buy drugs or worse, but I don't, and I don't think the majority of people who've currently never heard of Bitcoin and who currently use cards and cash to pay for things are wanting a way to buy heroin or hire a hitman and so on.  Those regular people buying everyday things are people I would like to see using Bitcoin, to pay for all the regular everyday stuff they currently use inconvenient cash and expensive cards for.  Along with all the unbanked people in the developing world who are currently excluded.

I personally was very encouraged to watch the recent NY DFS Bitcoin hearings. I got the impression that the man apparently in the driving seat of that process is really quite enlightened and is genuinely looking to find a way of achieving necessary law-enforcement goals without crushing Bitcoin in the process.  He's trying to find a win-win solution if he can, and (not being a crypto-anarchist) I think such a solution is possible.  That possible outcome is, I think, more likely if Bitcoiners co-operate with authorities over regulation.

It remains to be seen how regulation in NY actually turns out.

But in principle I want to see Bitcoin (appropriately) regulated, it will give it a major boost towards going mainstream, where it will benefit everyone.  Except the currently overpaid chief  banksters of course 

Any comments?

[BitcoinBobbeh]

regulation is inevitable.

the community has two choices:

1. be at the table.
2. or be on the menu.

3. Work in the kitchen.

[instructor2121]

Couldnt agree more!

Now as the technology evolves, and BTC becomes more mainstream, I could see a time where we could care less and less about regulation. But as of right now, no way to get around it! As long as fiat currency is involved, so will be the regulators...

[IndustrialSector3083]

As an anarch-capitalist, i don't want anyone saying what i must or not do with my money, neither explain each of my cents source. I'm a honest and polite citizen, but the government have many other ways to detect and arrest criminals, this is not made only by the money trail, and this have been the main question/excuse against bitcoin. Authorities can catch all criminals, by their actions/ways of communications and using intelligence, the money have been always the 'excuse', because through money they can keep the bankers and politics in the same place of always, and then, never will change.

Now is our chance, and we must not throw it in the trash.

[BADecker]

https://bitcointalk.org/index.php?topic=466239.msg5153121#msg5153121

[tabnloz]

One question:

How are money regulation rules going to stop money laundering?

Anyone who wants to launder / legalise their money via bitcoin, if they are competent enough, will simply continue find a way. 

Same way they do now, with cash.

[erik777]

I question that our current anti-money laundering laws have a net positive impact on the number of victims.  When this woman couldn't get $150 to her son for his baby's diapers, did a drug kingpin die? 

A victim is a victim, regardless of whether that victim has a needle shoved in their arm against their will, or a regulation impairing their ability to live freely and take care of themselves and those they love.  The difference is that when it is the government of a democratic society doing the victimizing, we are all responsible. 

[abhay81]

I have a self and peer regulatory protocol in mind that

it works using basic understanding of human limitations

Bitcoin has good value for doing honest internation business...


A coin from development to usage should be regulated by this p2p protocol of bitcoins

and needs to just be a layer on top of the bitcoins...

Let the dishonest BTC users lie exactly where they are...


The early Adopters of this shall have to be identified to the world...people will regularly check on them...

[polarhei]

Bitcoin is a two-fold thing.

It is better to state clearly.

[Bitcoinpro]

those who oppose regulation are the rich bankers profiting as much as they can before it gets govt protection

then the bankers are going to lose a large slice of transaction fee profits, many jobs loses also

[FalconFly]

IMHO regulation comes at a hefty price (over time).
Why ?

Basically because regulation comes from government or any other centralized institution, which all share one major (!) setback : lack of honesty over time.
Once governments run out of other people's money to spend (originally accociated with communism/socialism programs but affects so-called democracy just as well), regulation always ends up as control, then as abuse, then as a destructive force that only feeds itself until it dies due to lack of remaining resouces - or honest people intervention a.k.a. revolution of some sort.
Even non-government NGOs are affected, given sufficient time and enough resources/power to attract criminal elements.

Problem as usual : the human factor

Anything centralized always attracts corruption, which eventually cracks even the biggest dam built to hold it back.

Therefor, any type of regulation ideally is completely automated (systemic) and free of human influence and designed with failsafe safety functions to prevent it. Quite difficult to achieve, if at all.

[abhay81]

I totally agree with you my friend...

I believe such a system is possible and has to be made like it'd be used...

based on trust...  it'll award those who get there first and

while the fight between good and evil is carried out

people can do international business trustingly...

as much as the people inside the system fight each other... they loose that much value...and the rest who do honest work using it gain value lost by

those who fight it...

But as this is an ethical constraint we're talking about...

we've entered the phase of Open Source Politics...

The honestCoin Protocol...It's beauty will blow your mind...Trust me we could be the part of a legacy

or we enter a new legendary era

[Xav]

Well, it seems time gets a little bit rough for Bitcoin nowadays. On Reddit I read a cry for a PR-team and on this board some need for "re-gu-la-tion." C'mon. Please. These people don't understand the essential quality of Bitcoin; it's decentralised all the way, which means not only its fundamental P2P/PoW Network but also its authority or more so its absence of authority.

Keep in mind. In code and in nothing but the code we trust. People spreading nonsense about Bitcoin will always get corrected in the long run by this truth, and the truth lies in the code.

Of course some experts can express this truth better than others, and Andreas Antonopolous is doing it for the best; yet he has no authority - he does not need to have, for he is backed up by the code, which is the truth.

<sigh>

[nextgencoin]

The OP or anyone here hasn't even tackled the question why 'The Mainstream' ie Governments and central banks are even against Bitcoin. They don't like the deflationary nature of Bitcoin, disallowing them to run up massive debts to insure votes and so Central Banks can print themselves wealth for them and their banks. So why would they want this system? You're acting like they are just jealous of Bitcoins technology or something. You're basically suggesting that Governments will happily lose all their power along with Central Banks and accept a heavily inflationary situation and their own currency and power structures to crumble.


Ok so this is what WILL happen IF Bitcoin was regulated and went mainstream. Governments would simply add to the number of Bitcoins in someway, maybe by having a Bitcoin 2 or whatever they have to do to continually add supply.


People who want regulation don't understand what powerful forces are at play in this world.


Bitcoin (in its current state) will succeed with either bloody revolution or not at all.    

[NordicMoose]

One of the most forward arguments put forward is that it will crush underground markets, but it will still continue because cryptocurrency will never be the only means to procure these items.

But more fundamentally, bitcoin was invented to bypass these restrictions in the first place. What would Satoshi say if he/she/they were still actively and publicly involved in bitcoin?

Probably to f**k off.

[virtualmaster]

I realise there are bitcoin users who are libertarians or crypto-anarchists, and they tend to reject all regulation.  They seem to desire that bitcoin forever remain underground.  
...

The most people want Bitcoin to be as a free payment and value store system.
Free and underground they are two different things - generally.
But it could be also the same in the mind of those who think in terms slavery=legal and freedom=illegal.
If you like that your money to be stolen with inflation and hyperinflation or to be confiscated because some laws which are emitted only for this and not understandable with the common logic then you can use simply fiat.
It is difficult to break the chains of slavery in your mind and to realize that basically it is nothing criminal to carry all your money with you over the border(like in a brain wallet) even if a specific law declare to be illegal.
How many millions or billions of people lost all what they saved as result of decades of work to have something for their older days or for their childrens and corrupt governments simply inflated or confiscated with a law made for this purpose.
Is it so criminal to keep safe your legal and taxed income from such government actions ?

[franky1]

all that is needed is the regulations to look at transactions that swap crypto into FIAT. because FIAT is involved, goverments which own this FIAT can make laws about it, so we do not have control over their currency. thus we have to live with it and accept it and develop the best ways to impliment it that do not cause too much red tape.

what we do not want is controls to limit btc being sent to a btc recipient. a comparison is that do not want the likes of banks limiting ATM withdrawals to £$300 a day, which limits peoples daily spend.

what we do not want is controls to add identification to EVERY bitcoin transaction. a comparison is that every bank note is marked with someones name,address, date of birth before they buy items at the grocery store.

what we do not want is anything that delays the freedom and speed of sending bitcoins to each other.

governments do not have juristiction over bitcoin. but the main wallet and miner coders do. and this is why i do not like mining software rules which luke JR has implimented in his pool to limit 99% of transactions into his blocks as being transaction fee inclusive.

so i would be more worried about the likes of luke JR messing with bitcoin code, then governments

[Ragnarly]

But more fundamentally, bitcoin was invented to bypass these restrictions in the first place. What would Satoshi say if he/she/they were still actively and publicly involved in bitcoin?

Probably to f**k off.

In the genesis block, Satoshi used the following headline, "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks". https://en.bitcoin.it/wiki/Genesis_block

Photo of the newspaper: https://i.imgur.com/tWCACH5.jpg

Financial regulation won't make Bitcoin safer. Bitcoin was created in response to the failure of the regulators. Bitcoin has succeeded because it's has been able to develop in an unfettered free market. Regulations would have choked it. Imagine if Satoshi had sat down with regulators when he wrote his white paper.

[Meuh6879]

regulation is inevitable.

the community has two choices:

1. be at the table.
2. or be on the menu.

3. Work in the kitchen.

4. Drive the truck that it's supplied ... the all world.

[Timo Y]

I am not an anarcho-capitalist and I believe that centralized government has many roles to play.  Interfering in private commerce is not one of them.

"Money laundering" is a crime that didn't even exist 100 years ago. It was invented because the police was too lazy and incompetent to catch wealthy drug dealers. So what did the government do?  Instead of investing in better policing, they basically forced the private sector to do the police's job instead.  It is understandable why they did this.  It is easier to create regulations and offload the cost of policing to the private sector, than to spend taxpayer's money which will have to come from tax hikes or cuts in other departments. But that does not change the fact that AML regulations are horrible.  They are unjustifiable from a cost/benefit perspective.  They are a blunt tool that increases the cost of doing business across entire industries and hurts the economy. They treat honest people as "guilty until proven innocent" and are inefficient at catching the big criminals who will always find holes in the net.

Not every aspect of our lives needs to be regulated.  In fact, some aspects of our private lives remain completely unregulated and the world is not falling apart because of that. I don't need to fill in a mountain of paperwork before I choose to have someone as a friend.  So why should I need to fill in a mountain of paperwork before having someone as a business partner? Both types of relationships are private and to some extent indistinguishable. Also, regulation doesn't need to be top-down.  Cryptocoins not only make it possible to avoid doing businesses with people that you deem immoral, they will also allow this process to be automated.

Hopefully bitcoin and altcoins will convince governments that AML regulation has gone too far, and that there are more effective ways of catching criminals.  Sometimes laws have to adapt to new technologies, not the other way around.