[2014-02-25] Why Regulating Bitcoin Won’t Work

[cryptoanarchist]

http://www.coindesk.com/why-regulating-bitcoin-will-not-work/


Nice to see someone write an article that almost gets it. Even better to see comments from people that get it entirely.

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[fancy_pants]

World wide regulation will smash the bitcoin ecosystem into a million tiny little pieces.  In that form,  bitcoin will thrive.

[StarfishPrime]

World wide regulation will smash the bitcoin ecosystem into a million tiny little pieces.  In that form,  bitcoin will thrive.

+1
bitcoin is antifragile

[hilariousandco]

They'll make regulation work. They might not be able to regulate it from the actual protocol, but they'll regulate it when we spend or earn it. Governments aren't really just going to sit back and let us earn and launder money freely; they're going to want their cut.

[cryptoanarchist]

They'll make regulation work. They might not be able to regulate it from the actual protocol, but they'll regulate it when we spend or earn it. Governments aren't really just going to sit back and let us earn and launder money freely; they're going to want their cut.

I've been hearing this nonsense for over 3 years now, and still haven't had to deal with any regulations. What you're saying hilariousandco isn't new at all, and it is as wrong now as it was 3 years ago. Did you even read the article, or are you just doing your usual statist trolling?

[hilariousandco]

They'll make regulation work. They might not be able to regulate it from the actual protocol, but they'll regulate it when we spend or earn it. Governments aren't really just going to sit back and let us earn and launder money freely; they're going to want their cut.

I've been hearing this nonsense for over 3 years now, and still haven't had to deal with any regulations. What you're saying hilariousandco isn't new at all, and it is as wrong now as it was 3 years ago. Did you even read the article, or are you just doing your usual statist trolling?

You might not've had to deal with any regulations yet, but you most certainly will. Bitcoin has only really started to break into the mainstream, so they haven't had long to look at how to deal with it. Do you really think the government is just going to let us have our own money to play with? Here in the UK you already have to pay capital gains tax if you sell over a certain amount. I'm sure this is just a temporary solution to claw at what they can whilst they look at other options.

And yes, I read it, and I'm not a statist, Why is it I'm only trolling when I have a different opinion to somebody? I'm not arguing in favour of them doing it, I'm saying they will, but I guess you're one of these fuck da government armchair anarchist types who still gladly pay their masters wages, but think they've found a magical untaxable way out of the matrix with Bitcoin, right?

[cryptoanarchist]

They'll make regulation work. They might not be able to regulate it from the actual protocol, but they'll regulate it when we spend or earn it. Governments aren't really just going to sit back and let us earn and launder money freely; they're going to want their cut.

I've been hearing this nonsense for over 3 years now, and still haven't had to deal with any regulations. What you're saying hilariousandco isn't new at all, and it is as wrong now as it was 3 years ago. Did you even read the article, or are you just doing your usual statist trolling?

You might not've had to deal with any regulations yet, but you most certainly will. Bitcoin has only really started to break into the mainstream, so they haven't had long to look at how to deal with it. Do you really think the government is just going to let us have our own money to play with?

Governments don't have a choice - they can't. I guess you just don't understand how bitcoin works - its just file sharing. How well has the government stopped that? Maybe you're so obedient you've never figured it out, but anyone can go online and watch a movie that is not yet on dvd, or download their favorite music for free - both supposedly illegal. Chuck Schumer was supposed to regulate bitcoin 3 years ago - what's taking him so long? Why hasn't the government regulated torrents? Same reason - they can't.

Saying you're a statist troll was me trying to be nice. The only other explanation is that you're just really stupid and don't understand how bitcoin works.

Just looked at your profile, hilariousandco - over 6000 posts since just Nov 2013??? No one with a regular life spends that much time on here. I spend too much time on here and haven't made that many posts since April of 2011! You're a paid troll, no doubt about it. Welcome to my personal ignore-land.

[dynodog]

A self-regulatory organization (SRO) could be created which serves to provide guidance and supervision to exchanges.  This would not involve governments, but an elected group, probably elected by various exchanges, regarding the operation of the exchanges.  Joining would be completely voluntary.  Public confidence in bitcoin would increase.  Finally, mistakes (or fraud) in situations like gox would be greatly reduced.  

Gov regulation comes in when it's needed.  If people aren't getting cheated (because of the SROs involvement and supervision of exchanges), then the demand for gov regulation isn't as strong.  We all know that people losing money and getting cheated = gov regulations, which will likely be overly broad and hinder bitcoin greatly.  

Seems like a SRO could have prevented what many are calling obvious errors with the manner in which gox handled its exchange.  I don't see any negatives with having the SRO either.

[hilariousandco]

They'll make regulation work. They might not be able to regulate it from the actual protocol, but they'll regulate it when we spend or earn it. Governments aren't really just going to sit back and let us earn and launder money freely; they're going to want their cut.

I've been hearing this nonsense for over 3 years now, and still haven't had to deal with any regulations. What you're saying hilariousandco isn't new at all, and it is as wrong now as it was 3 years ago. Did you even read the article, or are you just doing your usual statist trolling?

You might not've had to deal with any regulations yet, but you most certainly will. Bitcoin has only really started to break into the mainstream, so they haven't had long to look at how to deal with it. Do you really think the government is just going to let us have our own money to play with?

Governments don't have a choice - they can't. I guess you just don't understand how bitcoin works - its just file sharing. How well has the government stopped that? Maybe you're so obedient you've never figured it out, but anyone can go online and watch a movie that is not yet on dvd, or download their favorite music for free - both supposedly illegal. Chuck Schumer was supposed to regulate bitcoin 3 years ago - what's taking him so long? Why hasn't the government regulated torrents? Same reason - they can't.

Saying you're a statist troll was me trying to be nice. The only other explanation is that you're just really stupid and don't understand how bitcoin works.

I know exactly how Bitcoin works. I don't think you know how regulation does or doesn’t work though. Although Bitcoin and torrents are based around the same principle, torrents are not a currency. Just because they haven't or can't regulate illegally downloading movies doesn't mean they can't with Bitcoin. Drugs are 'regulated' but you can still buy them illegally, does that mean they're unregulatable too? Nothing is regulatable 100%, that's why blackmarkets exists, but governments don't just let them be without trying to take them down or their cut.

And I've already said they can't regulate the protocol, but they can regulate when you buy goods or services or get paid in it just like cash. Obviously it'll never be 100% taxable or regulatable but they can't do that with cash either.

Edit:

Just looked at your profile, hilariousandco - over 6000 posts since just Nov 2013??? No one with a regular life spends that much time on here. I spend too much time on here and haven't made that many posts since April of 2011! You're a paid troll, no doubt about it. Welcome to my personal ignore-land.

Nice edit, but that's just a petty and pathetic attempt at a cop out for when you have a difference of opinion and can't back it up, but whatever.

[cryptoanarchist]

A self-regulatory organization (SRO) could be created which serves to provide guidance and supervision to exchanges.  This would not involve governments, but an elected group, probably elected by various exchanges, regarding the operation of the exchanges.  Joining would be completely voluntary.  Public confidence in bitcoin would increase.  Finally, mistakes (or fraud) in situations like gox would be greatly reduced.  

this^.

[hilariousandco]

A self-regulatory organization (SRO) could be created which serves to provide guidance and supervision to exchanges.  This would not involve governments, but an elected group, probably elected by various exchanges, regarding the operation of the exchanges.  Joining would be completely voluntary.  Public confidence in bitcoin would increase.  Finally, mistakes (or fraud) in situations like gox would be greatly reduced.  

this^.

But when you elect a group of people they will gradually essentially become a government and that's when corruption comes in, then we're back to square one. "Probably elected by various exchanges", would just bring in people with corporate interests and become some sort of Bitcoin Foundation (look how well that's been going). The people who join these groups and rise to power usually have self or other business interests motivating them.

[dynodog]

A self-regulatory organization (SRO) could be created which serves to provide guidance and supervision to exchanges.  This would not involve governments, but an elected group, probably elected by various exchanges, regarding the operation of the exchanges.  Joining would be completely voluntary.  Public confidence in bitcoin would increase.  Finally, mistakes (or fraud) in situations like gox would be greatly reduced.  

this^.

But when you elect a group of people they will gradually essentially become a government and that's when corruption comes in, then we're back to square one. "Probably elected by various exchanges", would just bring in people with corporate interests and become some sort of Bitcoin Foundation (look how well that's been going). The people who join these groups and rise to power usually have self or other business interests motivating them.

But the exchanges would not have to join the SRO.  I would feel more confident sending money to an exchange which I know is being supervised to some extent compared to one like gox which was not supervised at all, and was obviously making terrible errors or even engaging in fraud.  If you want to buy bitcoin from an exchange that is not affiliated with the SRO, you could do that.  The point is the public (and the exchanges) should have the choice. 

[hilariousandco]

A self-regulatory organization (SRO) could be created which serves to provide guidance and supervision to exchanges.  This would not involve governments, but an elected group, probably elected by various exchanges, regarding the operation of the exchanges.  Joining would be completely voluntary.  Public confidence in bitcoin would increase.  Finally, mistakes (or fraud) in situations like gox would be greatly reduced.  

this^.

But when you elect a group of people they will gradually essentially become a government and that's when corruption comes in, then we're back to square one. "Probably elected by various exchanges", would just bring in people with corporate interests and become some sort of Bitcoin Foundation (look how well that's been going). The people who join these groups and rise to power usually have self or other business interests motivating them.

But the exchanges would not have to join the SRO.  I would feel more confident sending money to an exchange which I know is being supervised to some extent compared to one like gox which was not supervised at all, and was obviously making terrible errors or even engaging in fraud.  If you want to buy bitcoin from an exchange that is not affiliated with the SRO, you could do that.  The point is the public (and the exchanges) should have the choice. 

Whilst I understand that, I think the question who polices the police comes into play. These bodies are always corruptible. Say if Gox was being monitored and someone finds a problem, all gox has to do is bribe somebody to keep it to themselves or not tell anyone about it. They could also just hide the problem or cover it up and hope nobody notices. I also think people should be wise enough to just use their own initiative and shouldn’t deal with shoddily run business like gox anyway. I've been saying for months I cannot fathom how people even still used them or how it was even still in business.

[dynodog]

A self-regulatory organization (SRO) could be created which serves to provide guidance and supervision to exchanges.  This would not involve governments, but an elected group, probably elected by various exchanges, regarding the operation of the exchanges.  Joining would be completely voluntary.  Public confidence in bitcoin would increase.  Finally, mistakes (or fraud) in situations like gox would be greatly reduced.  

this^.

But when you elect a group of people they will gradually essentially become a government and that's when corruption comes in, then we're back to square one. "Probably elected by various exchanges", would just bring in people with corporate interests and become some sort of Bitcoin Foundation (look how well that's been going). The people who join these groups and rise to power usually have self or other business interests motivating them.

But the exchanges would not have to join the SRO.  I would feel more confident sending money to an exchange which I know is being supervised to some extent compared to one like gox which was not supervised at all, and was obviously making terrible errors or even engaging in fraud.  If you want to buy bitcoin from an exchange that is not affiliated with the SRO, you could do that.  The point is the public (and the exchanges) should have the choice. 

Whilst I understand that, I think the question who polices the police comes into play. These bodies are always corruptible. Say if Gox was being monitored and someone finds a problem, all gox has to do is bribe somebody to keep it to themselves or not tell anyone about it. They could also just hide the problem or cover it up and hope nobody notices. I also think people should be wise enough to just use their own initiative and shouldn’t deal with shoddily run business like gox anyway. I've been saying for months I cannot fathom how people even still used them or how it was even still in business.

Agreed.  But at least there would be an additional layer of protection.  Imagine someone like Andreas going to mtgox to review their exchange in a manner similar to what he did recently with Coinbase.  Could mtgox bribe him to keep him quiet?  Yes, but unlikely.  The SRO would not provide absolute protection, but it would help exchanges from making mistakes (not keeping up with changes to bitcoin protocol, TM issues, etc), and it would make exchange fraud much more difficult, all of which would help the investing public and bitcoin in general.

[hilariousandco]

A self-regulatory organization (SRO) could be created which serves to provide guidance and supervision to exchanges.  This would not involve governments, but an elected group, probably elected by various exchanges, regarding the operation of the exchanges.  Joining would be completely voluntary.  Public confidence in bitcoin would increase.  Finally, mistakes (or fraud) in situations like gox would be greatly reduced.  

this^.

But when you elect a group of people they will gradually essentially become a government and that's when corruption comes in, then we're back to square one. "Probably elected by various exchanges", would just bring in people with corporate interests and become some sort of Bitcoin Foundation (look how well that's been going). The people who join these groups and rise to power usually have self or other business interests motivating them.

But the exchanges would not have to join the SRO.  I would feel more confident sending money to an exchange which I know is being supervised to some extent compared to one like gox which was not supervised at all, and was obviously making terrible errors or even engaging in fraud.  If you want to buy bitcoin from an exchange that is not affiliated with the SRO, you could do that.  The point is the public (and the exchanges) should have the choice. 

Whilst I understand that, I think the question who polices the police comes into play. These bodies are always corruptible. Say if Gox was being monitored and someone finds a problem, all gox has to do is bribe somebody to keep it to themselves or not tell anyone about it. They could also just hide the problem or cover it up and hope nobody notices. I also think people should be wise enough to just use their own initiative and shouldn’t deal with shoddily run business like gox anyway. I've been saying for months I cannot fathom how people even still used them or how it was even still in business.

Agreed.  But at least there would be an additional layer of protection.  Imagine someone like Andreas going to mtgox to review their exchange in a manner similar to what he did recently with Coinbase.  Could mtgox bribe him to keep him quiet?  Yes, but unlikely.  The SRO would not provide absolute protection, but it would help exchanges from making mistakes (not keeping up with changes to bitcoin protocol, TM issues, etc), and it would make exchange fraud much more difficult, all of which would help the investing public and bitcoin in general.

I agree, an additional level is usually a good thing, but far from watertight and could easily turn into a false sense of security, but lets also not forget we only know Andreas' (or whoever we voted fors) public persona. Sure, he seems like a great guy and I'm a fan of him, but he's only human and we don't know everything about him or on a personal level. He also has or could have business interests that may be affected by the whatever problems he uncovers. So maybe he does or doesn't take a bribe, but keeps something that should be publicly known to himself because if people became aware of it he might lose a lot of money or cause a lot of panic etc. It's always swings and round-abouts with these scenarios  .

[marcus_of_augustus]

The free market will provide ... just give it time and space to work.

Ratings agencies, insurance companies ... where do you think these originally came from, the end of a bureaucrat's pen?