selling drugs and money laundering: the potential downfall of bitcoin

[wb3]

I'm not debating if drugs should be illegal or not. I think people should be able to ingest anything they want. Regardless of whether it should or shouldn't be illegal, it is illegal. The government you want to over throw could buy all 5 million bitcoins in existence without batting an eye, instantly destroying the network. Don't tempt them. If you want this to succeed you have to make it something the powerful people want a piece of, not something they want to crush.

I would agree with that as long as I don't pay for their stupidity.  If someone wants to drink acid, go for it. Just don't let public money or systems pay for their health care.

[kiba]

Basically, the best strategy is not so much to ban stuff, but to flood the forum with legit stuff that it become politically impossible to shut down.

This is what people called "kitty activism".

[asdf]

I'm not debating if drugs should be illegal or not. I think people should be able to ingest anything they want. Regardless of whether it should or shouldn't be illegal, it is illegal. The government you want to over throw could buy all 5 million bitcoins in existence without batting an eye, instantly destroying the network. Don't tempt them. If you want this to succeed you have to make it something the powerful people want a piece of, not something they want to crush.

I would agree with that as long as I don't pay for their stupidity.  If someone wants to drink acid, go for it. Just don't let public money or systems pay for their health care.

I think many here would agree that the drug prohibition AND the public health care system need to go.

I Australia, the government steals our money, takes a huge cut and then rations it back out to us in the form of health care. Then taxes the shit out of cigarettes (500%) because smokers are a drain on the health care system and smoking is "bad" (similar for alcohol). I didn't ask for you health care, your moral righteousness or your taxes. Fucking government!

/rant

[protagonist]

Illegal goods and services are the best use for Bitcoins at the moment. All the legal things one could buy with Bitcoins can already be easily bought with credit cards and cash.

[Shortline]

Hi everyone, first post, just one of the many recent interested folks that have been lurking these forums. Really interesting community,  please don't dismiss this as a troll post because I totally believe in what you're doing and appreciate all the work you've put in. I'm not normally this aggro but someone's got to stand up for reason:)

This silk road thing is quite the debate around here.

Y'all need to get over it. From the discussions I've seen on the chans, slashdot, reddit and other public forums you're basically considered to be a collection of ultra-libertarian weirdos so ensconced in your own software-driven utopian scenarios that you're about as far removed from the prevailing public narrative as transhumanists and furries are. As in, nobody gives a toss about what you're doing even if they understand it, which the few who have heard of it probably don't. I'm not saying people are stupid (also apparently a forum paradigm that should be the subject of another rant) but bitcoin is obscure, requires more than a little bit of reading to understand and bitcoin.org isn't the place to learn about what's going on. Silk Road and other drug vendors in onionland are the place.

Drug markets give people an incentive to learn about this stuff. Legit e-merchants buy drugs too, more than a few will be swayed by the experience into adopting bitcoin.
The TOTAL bitcoin market is so small nobody in the government with the authority to do so is going to buy up all your coins - Silk Road has fewer than 1,000 members and a couple dozen vendors. At this point the DEA agent who proposes this at opsec is going to be laughed out of the room.

"We're not spending $5,000,000 to buy bunch of imaginary internet money to prevent people from buying cannabis, adderall and unscheduled chemical compounds. We're transferring you to the Mexico office instead."

Also, they may well be sinister operators but the government isn't stupid. If they did this buyout today (or another more sophisticated attack on the network) they'd have to go all black-ops and that's complicated. They can't even keep their black-hood torture centers secret. If they start publicly attacking bitcoin in any serious way you're going to see the entire internet jump up for your defense, and if the government wants it speculators of all kinds will want it too.

Take heart. I realize Tor is a different animal because it's had the strong support of the US government from it's inception, but look at the strength of the network now. The entire domain of hidden services is pretty much devoted to the most reviled forms of pornography and yet they're still there and stronger than ever. They're fighting a much more intense battle with public opinion than you ever will - if this thing survives it'll be because people can actually use it for their legit online dealings, not because parts of the early-adopter community were shunned. If anything the government will eventually find a use for bitcoin that, like Tor, undermines foreign governments that threaten their economic strength. What form this will take may never be known (I mean, what are all those Tor exit nodes in Virginia for? We'll probably never know) but it's assured that when Bitcoin markets start popping up in China and Pakistan a good chunk of their trade will be funneling money to low-level people who aren't worth the time for the secure parallel banking channels spooks use.

Someone bought this, after all: http://blockexplorer.com/block/0000000000022043f9ea2c298f3381c6ddd86b968271117dd55cb48ac297954c

Ok, /rant.

All that said, I think it's really good that there's a discussion of what should tolerated and what the banhammer should come down on in here. If anything a few folks who are curious about this sketchy bitcoin thing are going to come here, see these discussions and make up their own minds about consequences of being associated with this community, and I think it's easy for the average user to react favorably to soul-searching like this.

[semyazza]

... If anything the government will eventually find a use for bitcoin that, like Tor, undermines foreign governments that threaten their economic strength. What form this will take may never be known (I mean, what are all those Tor exit nodes in Virginia for? We'll probably never know) but it's assured that when Bitcoin markets start popping up in China and Pakistan a good chunk of their trade will be funneling money to low-level people who aren't worth the time for the secure parallel banking channels spooks use ...

Emphasis added.  

Food for thought:
How do we know this is not the exact intent of Bitcoin.  The questions are: Who is the target and who is the creator?

[mjsbuddha]

Also, they may well be sinister operators but the government isn't stupid. If they did this buyout today (or another more sophisticated attack on the network) they'd have to go all black-ops and that's complicated. They can't even keep their black-hood torture centers secret. If they start publicly attacking bitcoin in any serious way you're going to see the entire internet jump up for your defense, and if the government wants it speculators of all kinds will want it too.

bitcoin is completely anonymous. All they would have to do is download the bitcoin wallet, hop on Mt. Gox, and offer $1 dollar per bitcoin. Everyone would sell to them. The people that wouldnt would either hold on to the bitcoins so they aren't in circulation or trade them with people that then would sell them. And theres no way of telling if its the government buying them or some schmuck millionaire in utah.

[FatherMcGruder]

Markets like Silk Road cannot exist without law abiding Bitcoin users. Without them, there's no cover and exchangers would be accessories. Just an observation.

I'm okay with the likes of Silk Road sharing their announcing themselves in the Marketplace as long as they don't do any soliciting. I think that rule should apply to all vendors.

[BitterTea]

Also, they may well be sinister operators but the government isn't stupid. If they did this buyout today (or another more sophisticated attack on the network) they'd have to go all black-ops and that's complicated. They can't even keep their black-hood torture centers secret. If they start publicly attacking bitcoin in any serious way you're going to see the entire internet jump up for your defense, and if the government wants it speculators of all kinds will want it too.

bitcoin is completely anonymous. All they would have to do is download the bitcoin wallet, hop on Mt. Gox, and offer $1 dollar per bitcoin. Everyone would sell to them. The people that wouldnt would either hold on to the bitcoins so they aren't in circulation or trade them with people that then would sell them. And theres no way of telling if its the government buying them or some schmuck millionaire in utah.

They might be able to buy some coins at $1/ea, but the price would quickly climb above that, once people realize there was a large buyer buying without regard to cost.

[NghtRppr]

Also, they may well be sinister operators but the government isn't stupid. If they did this buyout today (or another more sophisticated attack on the network) they'd have to go all black-ops and that's complicated. They can't even keep their black-hood torture centers secret. If they start publicly attacking bitcoin in any serious way you're going to see the entire internet jump up for your defense, and if the government wants it speculators of all kinds will want it too.

bitcoin is completely anonymous. All they would have to do is download the bitcoin wallet, hop on Mt. Gox, and offer $1 dollar per bitcoin. Everyone would sell to them. The people that wouldnt would either hold on to the bitcoins so they aren't in circulation or trade them with people that then would sell them. And theres no way of telling if its the government buying them or some schmuck millionaire in utah.

They might be able to buy some coins at $1/ea, but the price would quickly climb above that, once people realize there was a large buyer buying without regard to cost.

Which would create another gold rush as mining has just become even more valuable. Driving up demand is probably the worst way to shut down a market since it only encourages new suppliers to enter the market.

[mjsbuddha]

If they bought all the coins one day then stopped buying them the next there would be none in circulation in the economy. we would be back to day one accept it would be a lot harder to get people to accept bitcoins after a giant crash like that.

[SmokeTooMuch]

Well its services like 'silk road', and the inevitable money laundering schemes that will eventually catch the eye of the powers that be and compel them to declare the bitcoin network illegal. If we don't moderate and police our own network it will all disappear in smoke, and the profits of everyone involved along with it. Blatantly illegal activity going on will make bitcoin go the way of napster.

Don't moderate the market. Moderate the government to legalize these things.
It's as simple as that.

[Timo Y]

If we don't moderate and police our own network it will all disappear in smoke, and the profits of everyone involved along with it.

The wonderful thing about a p2p project such as Bitcoin is: If you want something to get done, you don't lobby a central authority in the hope that they will listen, instead you just get straight to work and do it yourself.

So go ahead, police away!

And when you're done with the policing come back and tell us how it went. I'll be very curious to learn about your effective strategy of ostracising Silk Road from the Bitcoin network.  I certainly can't think of any myself.

Blatantly illegal activity going on will make bitcoin go the way of napster.

Blatantly illegal activity also goes on with cash, and on mobile phone networks, and on bittorrent. Can't remember most governments trying to ban those.  (nb. bittorrent has never been explicitly banned as a technology, it's only illegal to use it in certain ways).

Also, didn't napster rely on a centralised server?  

[jgarzik]

Blatantly illegal activity also goes on with cash, and on mobile phone networks, and on bittorrent.

Yes -- and a great many Internet forums make efforts to avoid discussion and encouragement of illegal activity.

[Anonymous]

Most likely they will find some kind of useful idiot to buy something illegal with bitcoin as a false flag.

It's what they do. Highly effective plan is highly effective.

 

[BitterTea]

Yes -- and a great many Internet forums make efforts to avoid discussion and encouragement of illegal activity.

Not to speak for Satoshi, but Bitcoin was created with the intention of undermining the State's hold on money. Is there any reason to believe the the State does a better job creating law than it does money?

[jgarzik]

Yes -- and a great many Internet forums make efforts to avoid discussion and encouragement of illegal activity.

Not to speak for Satoshi, but Bitcoin was created with the intention of undermining the State's hold on money. Is there any reason to believe the the State does a better job creating law than it does money?

The State is a collection of men, just like any other.  Anarchy doesn't work.

[BitterTea]

The State is a collection of men, just like any other.  Anarchy doesn't work.

Very bold claim. Care to back it up?

If not anarchy, what do you call the interaction between states?

[gusti]

The State is a collection of men, just like any other.  Anarchy doesn't work.

Very bold claim. Care to back it up?

If not anarchy, what do you call the interaction between states?

the law of the jungle ?   

[ShadowOfHarbringer]

If they bought all the coins one day then stopped buying them the next there would be none in circulation

OMG, this has been discussed soooooooooooooooooooooooooooo many times.

It is absolutely impossible to "buy all the coins". Nobody can force anybody to sell even at the HIGHEST price.
The human greed factor comes into play here.

Right now, If somebody announced "hey, we're buying BTC for 100 dollars each !!", there would be a lot of people who would still hoard the BTC because they would think that the price will rise even more.