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Author Topic: "Money Services Business" - The Corporatist Reign Over Bitcoin  (Read 2930 times)
Harvey
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December 09, 2011, 08:28:19 PM
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A good lot of Bitcoin exchanges and services could be considered Money Services Businesses and be required to be licensed and pay horrendous and nearly unprofitable fees. This is a problem and could very well centralize the Bitcoin market to only big exchanges; the small guys will be left out.

The solution: Bitcoin needs to be called what it is. Not money and not currency but a data protocol to provide free speech and communication without inhibition across the web.

We're going to get in a huge mess with the regulators if we don't begin changing our culture in regards to this. I would prefer our economy to be diverse with small merchants rather than a oligarch of government-approved Mt. Goxes created by corporatist regulation.

We may even see the bigger faces such as Gox and Tradehill bought out by the government with favoritism and exemptions (aka corporatism) to allow for further centralization of the Bitcoin market. Using their voice, the Bitcoin culture could be altered to support widespread government control of the currency. This is scary stuff and it could stifle Bitcoin. We need to be alert.

@HarveyAlpha (https://twitter.com/#!/HarveyAlpha) | It would be foolish to assert that there is no power above mine. Only the attitude that I take toward it will be quite another than that of the religious age: I shall be the enemy of every higher power.
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cbeast
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December 09, 2011, 10:22:00 PM
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Well, if centralized exchanges have to pay fees, then that is their problem. I have a feeling that Bitcoin users will find a better solution. The exchanges can alter their business models to adapt. Eventually, when we reach Stage 1 or 2* in Bitcoin acceptance, accessibility will be ubiquitous.


*https://bitcointalk.org/index.php?topic=54091.0

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December 09, 2011, 10:31:01 PM
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I think your worries are a little over simplified. Exchanges are an interim step, once enough people have their clients on their computers, cell phones, etc...  Exchanges will go the way of the Dinosaur for small transactions... for large transactions a form of escrow will ensue which I suppose the 'Exchanges' could fulfill a role.

As far as any ForEx exchange for travelers... instead of doing it at Airports, Hotels, Banks, and certain Bars Smiley , they will be able to do it with anyone standing around said places. Sort of like they do now, but for cheaper rates Smiley


Corporations have been enthroned, An era of corruption in high places will follow and the money power will endeavor to prolong its reign by working on the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. ~Abe Lincoln 1ApJdWUdSWYw8n8HEATYhHXA9EYoRTy7c4
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December 09, 2011, 11:03:35 PM
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A good lot of Bitcoin exchanges and services could be considered Money Services Businesses and be required to be licensed and pay horrendous and nearly unprofitable fees. This is a problem and could very well centralize the Bitcoin market to only big exchanges; the small guys will be left out.

The solution: Bitcoin needs to be called what it is. Not money and not currency but a data protocol to provide free speech and communication without inhibition across the web.

...and then people use bitcoin as money / a store of value, in exchange for goods and services.

Any court in the world will see that it is more than a "data protocol" in practice.


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cbeast
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December 09, 2011, 11:06:06 PM
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Bitcoin will probably become the judicial bribery of choice.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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December 09, 2011, 11:57:32 PM
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A good lot of Bitcoin exchanges and services could be considered Money Services Businesses and be required to be licensed and pay horrendous and nearly unprofitable fees. This is a problem and could very well centralize the Bitcoin market to only big exchanges; the small guys will be left out.

The solution: Bitcoin needs to be called what it is. Not money and not currency but a data protocol to provide free speech and communication without inhibition across the web.

...and then people use bitcoin as money / a store of value, in exchange for goods and services.

Any court in the world will see that it is more than a "data protocol" in practice.



Of course they will, but a court will have to exercise its rulings through Law Enforcement. How do they enforce their rulings? Make it a crime to use BitCoin? Put everybody in jail?  If BitCoin spreads fast enough and grows, it will become a defacto-standard... that can't be enforced.

So either the system will change, probably to a National (world) sales tax system or they will have to go after the BitCoin users or change the way money is accepted currently.

I often wondered why the Governments don't encode a BarScan, QR Code, etc... on their dollars and each and every transaction taking place can be verified as to their are not duplicates(counterfeits) and track every dollar and transaction for goods and services.. They would be able to follow all physical currency to who(or at least where it has last been used) currently holds that bill.

But then I think that Scares them as much as it does us. Who is paying that Congressman, Senator, President, or CEO. Smiley  IMO, that is why they don't do it.

Just an opinion.

Corporations have been enthroned, An era of corruption in high places will follow and the money power will endeavor to prolong its reign by working on the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. ~Abe Lincoln 1ApJdWUdSWYw8n8HEATYhHXA9EYoRTy7c4
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December 10, 2011, 12:07:43 AM
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A good lot of Bitcoin exchanges and services could be considered Money Services Businesses and be required to be licensed and pay horrendous and nearly unprofitable fees. This is a problem and could very well centralize the Bitcoin market to only big exchanges; the small guys will be left out.

The solution: Bitcoin needs to be called what it is. Not money and not currency but a data protocol to provide free speech and communication without inhibition across the web.

We're going to get in a huge mess with the regulators if we don't begin changing our culture in regards to this. I would prefer our economy to be diverse with small merchants rather than a oligarch of government-approved Mt. Goxes created by corporatist regulation.

We may even see the bigger faces such as Gox and Tradehill bought out by the government with favoritism and exemptions (aka corporatism) to allow for further centralization of the Bitcoin market. Using their voice, the Bitcoin culture could be altered to support widespread government control of the currency. This is scary stuff and it could stifle Bitcoin. We need to be alert.

Bitcoin is money. A court _will_ rule this way if a big case comes to a rational court. It meets all of the definitions of money, it just hasn't been recognized as such.

Any gazing into the future should be based upon this assumption.

Hopefully bitcoin reaches an adoption level where currency trading won't really be relevant.

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Big Time Coin
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December 14, 2011, 03:26:30 AM
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This is a good post with some bad off the cuff replies.  I judge ye  Angry

Bitcoin is money in the same way that WoW gold is money, doesn't mean that Vivendi Universal or Blizzard is a MSB.  Definitely doesn't mean that Leeroy Jenkins is MSB.

The solution: Bitcoin needs to be called what it is. Not money and not currency but a data protocol to provide free speech and communication without inhibition across the web.

Maybe this would have worked had it been done from the beginning, but it is too late now to unring the bell.  You may as well start your own open-source project like ixcoin etc.  If you want to be in charge of the message like this.  Even being called virtual currency, it is having a hard time getting traction.

The effort needs to be to get regulators and courts to treat it differently than electronic bank deposits of fiat currencies.  This is achievable without playing hide-the-ball with them.  Trying to hide the ball as you propose just makes you look sneaky and devious. 

Ultimately, lying about the bitcoin project's aims and purpose will get you nowhere with any of the three branches of government at best.  At worst, it will hurt the image of the project by making it look like a devious, sneaky, criminal thing.

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December 14, 2011, 03:46:09 AM
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This is a good post with some bad off the cuff replies.  I judge ye  Angry

Bitcoin is money in the same way that WoW gold is money, doesn't mean that Vivendi Universal or Blizzard is a MSB.  Definitely doesn't mean that Leeroy Jenkins is MSB.

The solution: Bitcoin needs to be called what it is. Not money and not currency but a data protocol to provide free speech and communication without inhibition across the web.

Maybe this would have worked had it been done from the beginning, but it is too late now to unring the bell.  You may as well start your own open-source project like ixcoin etc.  If you want to be in charge of the message like this.  Even being called virtual currency, it is having a hard time getting traction.

The effort needs to be to get regulators and courts to treat it differently than electronic bank deposits of fiat currencies.  This is achievable without playing hide-the-ball with them.  Trying to hide the ball as you propose just makes you look sneaky and devious.  

Ultimately, lying about the bitcoin project's aims and purpose will get you nowhere with any of the three branches of government at best.  At worst, it will hurt the image of the project by making it look like a devious, sneaky, criminal thing.
The widespread cloning of parts of the financial services industry to the bitcoin world, particularly the speculative ones, has made it easier and easier to apply the reasoning that "If it walks like a duck, talks like a duck, and shakes that thang like a duck - it's a duck" such that it's probably a done deal at this point in time. That is to say, the horse is out of the barn, I hope you didn't marry the cow for her free milk.

It's time for the U.S. to throw Israel under the bus. The pure avarice of a colonial land grab by European colonists after WWII has nothing to do with religious tolerance or freedom, to the contrary, it mocks both by hiding behind them.
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January 10, 2012, 04:58:36 AM
 #10

It is much better for Bitcoin to be treated as money since that would avoid the payment of VAT (European Union) or GST (Canada, Australia) etc. Treating Bitcoin as money actually makes a lot of sense given its purpose and use.



Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
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January 10, 2012, 10:35:07 AM
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It is much better for Bitcoin to be treated as money since that would avoid the payment of VAT (European Union) or GST (Canada, Australia) etc. Treating Bitcoin as money actually makes a lot of sense given its purpose and use.
On one hand, interpreting Bitcoin as currency instead of a normal good would eliminate VAT on sale, but on the other might make Bitcoin subject to certain regulations. It's a double edged sword. However, something similar that Nagle pointed out a couple of months back could also happen: that the classification of Bitcoin for tax purposes would be different than the classification for the purposes of regulation/anti-money-laundering etc.
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January 10, 2012, 04:33:00 PM
 #12

Sales taxes such as GST or VAT are a far greater threat to Bitcoin if it is not treated as "money" that anti money laundering laws will ever be. Paying an extra 5% - 20% (VAT, GST) or more on each Bitcoin transaction will kill Bitcoin in no time. On the other hand requiring  the reporting of "large" Bitcon transactions to the government will have a minimal if any impact on Bitcoin. Most people do not live in the United States with its lack of VAT/GST style of sales taxes.


Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
lonelyminer (Peter Šurda)
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January 10, 2012, 05:45:35 PM
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Sales taxes such as GST or VAT are a far greater threat to Bitcoin if it is not treated as "money" that anti money laundering laws will ever be. Paying an extra 5% - 20% (VAT, GST) or more on each Bitcoin transaction will kill Bitcoin in no time.
In principle you are correct that VAT requirement is not great, but I think you're exaggerating the effect. It only affects situations where the person "paying" with Bitcoin is registered for VAT purposes, and the counterparty (i.e. seller of goods/services) isn't. An example would be merchants selling physical Bitcoins. It does not affect B2B transactions (accounting is different, but has no effect on the net result), it does not affect consumers buying goods with Bitcoin, it does not affect employees being paid with Bitcoin (I'm not sure about this one actually), it does not affect Bitcoins obtained through exchanges (other than the fees being subject to VAT). Maybe it would affect loans, but I'm not sure to what extent this is relevant for the near future.

On the other hand requiring  the reporting of "large" Bitcon transactions to the government will have a minimal if any impact on Bitcoin. Most people do not live in the United States with its lack of VAT/GST style of sales taxes.
Again, in principle, you are correct, but the regulation can annoy all kinds of people. It can make miners subject to regulations, exchanges who have customers in VAT-using countries, e-wallets and so on. It can, for example, require that miners incorporate with a minimum capital of 1 million Euros (as the e-money directive does in the EU already).
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January 11, 2012, 06:17:29 AM
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Bitcoin needs to be called what it is. Not money and not currency but a data protocol to provide free speech and communication without inhibition across the web.

Amen... Amen I say to you.  The survival of bitcoin lies mostly in the public perception.  Bitcoin being a method in which one can freely express their speech (one could print out the block chain to date ie. this could be considered printed free speech) [1] has some staying power.  What better way to promote free speech but to allow a method in which people can freely exchange value without the observance of law.[2]

Bitcoin being perceived as a commodity, or currency could be easily regulated down a hell hole of "terrorist funding"




[1]  there may be a business in officially printing out (on paper) the block chain at a given date to provide an academic means to verify btc ownership

[2]  someone mandating to you where the fruits of your labour need to be allocated
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January 11, 2012, 09:27:40 PM
 #15

There is a critical difference between "currency" and"money" here. Bitcoin is not currency but it is very hard to argue it is not "money". As for Bitcoin being a commodity possibly but is more along the lines of a virtual equivalent to a precious metal for example gold than say a regular commodity for example lead.

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
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January 11, 2012, 10:23:37 PM
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...................

I often wondered why the Governments don't encode a BarScan, QR Code, etc... on their dollars and each and every transaction taking place can be verified as to their are not duplicates(counterfeits) and track every dollar and transaction for goods and services.. They would be able to follow all physical currency to who(or at least where it has last been used) currently holds that bill.

......................


they already did... http://counterfeitdetector.blogspot.com/2007/07/rfid-tagged-euro-banknotes-now-in.html

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February 17, 2012, 03:03:57 PM
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I suppose most of you have heard Facebook has applied for a Money Transmitter Licence for their facebook credits.
If its become perfectly legal to trade in FB credits I wonder on what ground ANY government will forbid its citizen from trading in bitcoins ..refusing them what they granted to FB.
I can run my own free software social network, including bitcoins: the people I am dealing with in bitcoins are my "friends"
I do not need a licence because I am not doing it for a profit as a third party  but only for a private circle.
This is how bitcoin could get started on a large scale.

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February 17, 2012, 03:10:30 PM
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I suppose most of you have heard Facebook has applied for a Money Transmitter Licence for their facebook credits.
If its become perfectly legal to trade in FB credits I wonder on what ground ANY government will forbid its citizen from trading in bitcoins ..refusing them what they granted to FB.
I can run my own free software social network, including bitcoins: the people I am dealing with in bitcoins are my "friends"
I do not need a licence because I am not doing it for a profit as a third party  but only for a private circle.
This is how bitcoin could get started on a large scale.
Maybe we should all get a series 7 license and broker electronic currencies publically. If you think Bitcoin is volatile, wait until FB has competition jump in the game. Bitcoin will become the stable "gold standard" to all these online currencies.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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February 17, 2012, 03:16:36 PM
 #19

Really the only "money services" are thoses that convert BTC to fiat currencies.

Why use them at all?  Why convert to fiat currencies (i.e. "funny money")?

Just sit on your BTC and only spend it in direct transactions for goods and services.  With no intermediary involved, there's no way to regulate BTC at all.

You are in a maze of twisty little passages, all alike.
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