Why do people fear regulation so much?

[un_ordinateur]

(I know I'll be saying things that will some people will strongly dissagree. But I'm trying to have an intelligent conversation)

Don't get me wrong: any overly restrictive regulation; outlawing bitcoins, etc... would of course be bad.

What I don't get is that some people seem to fear ANY form of regulation whereas reasonable and balanced regulation can, on the contrary, help an industry strive.

The fact that food additive and pharmaeutical is regulated is good: I can trust that they are safe and won't poison me.

Net neutrality laws, benefit Internet and benefit the end user, even if telecoms don't like them.

In the same fashion, imagine that law required that bitcoin exchanges are required to publish an audit every quarter. The Mt.Gox fiasco would have never happened.

In any case, if we ever hope that bitcoin be used as commonplace currency, it should be treated as such. Which means the same taxes, regulation, etc... You may dissagree with those laws, but it is another debate; how much must the governement tax and regulate money. But I think that somebody that really hopes for Bitcoin becoming mainstream, should rejoince at any reasonable regulation that consider bitcoin on an equal footing with regular money.

[byt411]

Because BitCoin is a decentralized currency. It was created as one, meant to be one, and will end up as one.
If it is centralized, it means 100% hashrate is controlled by someone. They can then do what they like and launch a 51% attack and destroy bitcoin. And the governments can force us to use pieces of paper again.

[glendall]

The problem I have with it is that regulation by the government would in itself not bother me.

But the fact is, the banking industries (wealth management companies etc etc, all the same 2/3 companies in reality) have effectively taken over public government's policy making ability.  This is most notorious in the United States (which sets most of the world's financial policies) where Goldman Sachs employees basically set economic policy.

In contemporary times much economic policy is not set by government to benefit citizenry, but instead, to enlarge the power of the banks.

So where does that leave us? The banking industry is against bitcoin naturally, because it is the first and only realistic hope people have escaping out of their greedy fingers in your pocket.  So it goes to figure that most regulation made will just in a effect be a penalty against bitcoin primarily before anything else.

We don't ever want to get the place where we are with fiat, where companies are leveraged 100x+ to 1 for every dollar they have, take massive systemic risks on the regular to increase quarterly profits, charge you exorbitant fees to take out your own money, are able to freeze you out of you the monetary system if you have a non-corporate opinion or tell the truth (ie wikileaks), have the power to repeal saftey guards in the economy that prevent Great Collapse ( http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Legislation ) , print money magically from nothing, controlled by a private company run by a handful of people profiting 6% for every dollar they create ( google federal reserve 6% dividend) ,  and so powerful that they even if they fail they can be bailed out by taxpayer debt when they fail.

The banking industry heads have more say on policy making than most elected officials -- it's a bad situation, bitcoin is the only hope that I see, and does not need regulation to prosper (just look at its history already).

Regulation = control

Control = limiting others' power to increase your own

http://prof77.wordpress.com/politics/an-updated-list-of-goldman-sachs-ties-to-the-obama-government-including-elena-kagan/

[keithers]

One of the major problems with regulations would be the state and government licenses.   The exchanges, or business may be forced to be licensed in each state or country that a person is trying to purchase bitcoins from.  Not to mention that you may need to register with all appropriate forms of ID, any place that you purchase or store bitcoins.  Major un-needed headache

[corebob]

Basically because revolution always comes from below. Anything applied to it from above can only weaken it.

[leopard2]

the problem with regulation it is not here to protect us 

simple example

exchange cash for btc at a physical location in any quantity (a process that would almost annihilate the need for exchanges)

a) good regulation: makes sure no one gets mugged, cash is checked for counterfeit

b) bad regulation: outlaws this via AML and KYC in the first place, enforces a horrible bureaucracy, plus taxes. in many countries even the withdrawal or deposit of cash from your own bank account is severely restricted!

that is why people fear regulation, for the same reason they fear bacteria, because most of them make you ill

[Dafar]

I want some regulation... this shouldn't be the wild wild west where hackers and scammers roam free. Right now that's how it is and you have to be extremely careful in securing your money, which is one of the problems that needs to be overcome for mass adoption. There should be some protection, without the kind of deception, bureaucracy and control we get form banks.

[DooMAD]

The first three things that popped into my head about why regulation is pointless.  There would be more if I could be bothered.

1)  Bitcoin is international and you'll never get every country to agree on how to regulate them.
2)  Regulation would not have prevented gox's poor programming and non-existent customer service.
3)  The second you introduce regulation is the second everyone who understands the currency properly dumps it.

[Lauda]

Because most of the time it has an negative impact on us.

[Lethn]

I understand where you're coming from and I definitely agree about the idea of pharmaceutical companies and food companies selling me something poisonous or worse, in fact I wish government would focus on basic things like this instead of trying to judge every facet of our lives like they currently do now. I think the reason a lot of people are, I wouldn't say afraid, but extremely sceptical and hateful of government regulation is because the regulators we have just aren't bloody trustworthy.

For an example do you remember when the senate Bitcoin hearings began awhile back? In order to 'fact find' about the currency the first thing the committee did was bring in what must have been two crime based government agencies, a child protection charity and from what I can see maybe one or two people who were actual experts on the subject. This is the kind of shit we're going to be put through all the time if the community actively goes along with the U.S regulations.

it's like a bunch of U.S Ambassadors being assigned to countries they've never actually been to and yes this is actually true.

The first three things that popped into my head about why regulation is pointless.  There would be more if I could be bothered.

1)  Bitcoin is international and you'll never get every country to agree on how to regulate them.
2)  Regulation would not have prevented gox's poor programming and non-existent customer service.
3)  The second you introduce regulation is the second everyone who understands the currency properly dumps it.

I agree with most of these points except for 3, I suspect when they introduce regulation as they have done that's when everybody who understands the currency dumps the country

[Snail2]

If you let bankers and politicians to your table they never ever will leave. Probably you have to abandon your table. This is why I'm afraid of regulation.

[un_ordinateur]

a) good regulation: makes sure no one gets mugged, cash is checked for counterfeit

b) bad regulation: outlaws this via AML and KYC in the first place, enforces a horrible bureaucracy, plus taxes. in many countries even the withdrawal or deposit of cash from your own bank account is severely restricted!

That's my point. We should be happy with good regulation.

As for AML and KYC law, well... That's USA being stupid. The rest of the world is not crazy as you. For example, Canadian banking system is one of the most sane; during the 2008 crisis, we were almost not affected. (Well, we suffered because our main trading partner was the US, and they were hit hard; the point is, up here, the forclosure rate or the employement rate did not go up that much.)

that is why people fear regulation, for the same reason they fear bacteria, because most of them make you ill

I'm sorry to tell you, but there are more bacterias in your body than there are of your own cell. Your digestive system contains several kind of bacteria that help to keep you alive. (The once did an experiment in which they raised mice in a sterile environnement; they died)

[Lauda]

I don't fear regulation because Bitcoin.

Regulation fears bitcoin.

[ISAWHIM]

The fact that food additive and pharmaeutical is regulated is good: I can trust that they are safe and won't poison me.

Regulation promises no such thing... What it promises is that there is less potential chance for being poisoned (except for the "known" side-effects/poisons), and if poisoned beyond that known poison, the company who sold you the poison, will be held responsible.

There is no claims of "safety", in regulation.

Drugs get pulled off the "regulated market", which were once regulated. Items get pulled for being unsafe. People still get screwed by regulated markets...

Enron
NYSE
AOL
Microsoft
DOW

Just to name a few "regulated" things that have been the source of some major "non-good", and "distrust".

Why do we fear it... Because it costs us, to regulate. It rewards only those regulating it. It offers little protection, and even less enforcement is actually done. The majority of regulation is simply to do nothing, and get something. "Comfort foods" for the mind.

However... Since it is "comfort food", it does fill more peoples bellies than the distasteful fear of unregulated markets. (However, it should not be forced. What should be forced is alerting people that they are participating in an unregulated market. So they are aware of the lack of "comfort food" that they will never not get.)

Regulation has many faces...

We are not talking about price regulation... We are talking about accountability and proof, regulation.

[Snail2]

Just try to imagine Ben Barnake and Christine Lagarde in the board of the Bitcoin Foundation... Scary stuff .

[xyzzy099]

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

[Lauda]

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

Some regulation would be okay I assume, but the governments tend to take a bad stance here.

[anth0ny]

What I don't get is that some people seem to fear ANY form of regulation whereas reasonable and balanced regulation can, on the contrary, help an industry strive.

Generally such people are using the term "regulation" to mean "a law I don't like.

The fact that food additive and pharmaeutical is regulated is good: I can trust that they are safe and won't poison me.

Well, it's nice that there are laws against poisoning people, but the current regulations go way too far.

Net neutrality laws, benefit Internet and benefit the end user, even if telecoms don't like them.

How so? Why shouldn't I be allowed to buy whatever Internet service that someone is willing to sell to me?

In the same fashion, imagine that law required that bitcoin exchanges are required to publish an audit every quarter. The Mt.Gox fiasco would have never happened.

Enron was required to publish an audit every quarter.

But I think that somebody that really hopes for Bitcoin becoming mainstream, should rejoince at any reasonable regulation that consider bitcoin on an equal footing with regular money.

I think I can agree with that. On the other hand, there are currently a lot of bad regulations over "regular money".

My main issue with regulations is that I want to be able to buy whatever I want from whomever I want, so long as I'm not hurting anyone else in the process. If I want to buy pot, or non-neutral Internet access, or bitcoin, I should be able to do so without the government interfering. I'm an adult. Let me make adult decisions.

[un_ordinateur]

Net neutrality laws, benefit Internet and benefit the end user, even if telecoms don't like them.

How so? Why shouldn't I be allowed to buy whatever Internet service that someone is willing to sell to me?

You said later: "as I'm not hurting anyone else in the process". Non-neutral network hurt other buisnesses. If people have to begin signing "distribution contracts" with Internet providers in order for poeple to be able to access their website, you're hurting every startup and killing whats makes Internet so awesome: The fact that I can setup a website in my home computer, and the whole world can access it for free!

It's one of the beneftis of Bitcoin too, that it's neutral! There is no processor that can chose wether to let go a transaction or not.

In the same fashion, imagine that law required that bitcoin exchanges are required to publish an audit every quarter. The Mt.Gox fiasco would have never happened.

Enron was required to publish an audit every quarter.

Fine, but there's a difference between deliberate fraud and stupidity. People deliberately can hide cash or facts, and no amount of regulation can prevent that. However, by requiring to publish an audit, it would have forced Mt.Gox to check wether it had enough BTC on had to cover all it's users funds. And their problem would have been found sooner.

My main issue with regulations is that I want to be able to buy whatever I want from whomever I want, so long as I'm not hurting anyone else in the process. If I want to buy pot, or non-neutral Internet access, or bitcoin, I should be able to do so without the government interfering. I'm an adult. Let me make adult decisions.

I agree with that.

[descarte]

I think a bit of regulation gives government some peace of mind. Full regulation takes away the spirit of bitcoin. I don't think many government knows how to deal with it yet, and hence the controversy.