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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1806356 times)
rocks
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March 11, 2014, 06:02:52 PM
 #7821

The issue with US authorities creating a colored coin system and tainting coins they don't like, is simply that Bitcoin is an international system and trying to get all of the world's authorities to agree to a common regulatory framework is simply impossible.

Consider what will happen if the US uses regulation to taint coins out of their control:
1) The US market will split in two, a white market and a black market. Many people will have both and there is nothing that can be done to stop it. White market coins will be used with reputable businesses, but at the same a thriving black market would be created around tainted coins. This will be similar to when alcohol was made illegal and the country simply ignored the ban, but the long term effect was the rise of organized crime which took the FEDs two generations to get under control.
2) US based bitcoin startups/businesses and silicon valley would howl that the US is missing out on the next great new innovation by limiting US firms' ability to compete. The US always wants to be at the front of innovation worldwide and does not like missing an opportunity.

At the same time, tainted coins would maintain their value because said regulation is not global and tainted coins would still have value in the EU, SA, Asia, etc. It might be necessary to pay a "service fee" to use overseas cash-out "services" and there would be some risk, but it would be a vibrant and competitive market. So the end effect would be tainted coins would not lose too much value.

The end result is a US tainted coin regulatory system would simply: 1) Hamper US business 2) Foster an underground black market that would be difficult to stop once it gets going and 3) have little practical effect on tainted coins value.

I'm not saying they won't try, but it is a long term futile effort IMHO.
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Peter R
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March 11, 2014, 06:22:04 PM
 #7822

...coin taint...


Tvbcof, do you expect coinbase transactions (newly-created coins) to be considered taint free, or will the tainting authorities peel off a bit of taint from all the transaction fees included in that block reward?  They'd be introducing the idea of "original taint."  

Right now, blockchain.info considers newly created coins as untainted but this could be changed retroactively.  


Run Bitcoin Unlimited (www.bitcoinunlimited.info)
tvbcof
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March 11, 2014, 06:29:59 PM
 #7823

The issue with US authorities creating a colored coin system and tainting coins they don't like, is simply that Bitcoin is an international system and trying to get all of the world's authorities to agree to a common regulatory framework is simply impossible.

Consider what will happen if the US uses regulation to taint coins out of their control:
1) The US market will split in two, a white market and a black market. Many people will have both and there is nothing that can be done to stop it. White market coins will be used with reputable businesses, but at the same a thriving black market would be created around tainted coins. This will be similar to when alcohol was made illegal and the country simply ignored the ban, but the long term effect was the rise of organized crime which took the FEDs two generations to get under control.
2) US based bitcoin startups/businesses and silicon valley would howl that the US is missing out on the next great new innovation by limiting US firms' ability to compete. The US always wants to be at the front of innovation worldwide and does not like missing an opportunity.

At the same time, tainted coins would maintain their value because said regulation is not global and tainted coins would still have value in the EU, SA, Asia, etc. It might be necessary to pay a "service fee" to use overseas cash-out "services" and there would be some risk, but it would be a vibrant and competitive market. So the end effect would be tainted coins would not lose too much value.

The end result is a US tainted coin regulatory system would simply: 1) Hamper US business 2) Foster an underground black market that would be difficult to stop once it gets going and 3) have little practical effect on tainted coins value.

I'm not saying they won't try, but it is a long term futile effort IMHO.

I think you are making several mistakes:

1) Most nations are likely to follow the U.S.'s lead for a variety of reasons.  Whatever methods the U.S. uses to promote taint will be followed by the aligned nations (or more offensively, our vassal states known colloquially as 'the free world') and the methods used by the non-aligned states will be probably even more draconian.

2) Nobody wants to lose value personally no matter what their stripe.  Thus, with a tiny fraction of exceptions, everyone is going to want to have clean coins because they are most useful.  They can be used on exchanges which handle fiat, traded at full value to Americans(+), used to buy shit on TigerDirect, etc, where as tainted coins cannot.  I'll bet you'll be surprised at the level of devaluation this provokes.  And again, if one is not checking for tainted coins it won't be long before that is all that they own.

The main thing influencing the value of tainted coins will be speculation that they will one day be untainted for a variety of reason.  That will indeed produce a lively market, but it will be one which burns most non-sophisticated participants badly and regularly.


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March 11, 2014, 06:38:50 PM
 #7824

...coin taint...

Tvbcof, do you expect coinbase transactions (newly-created coins) to be considered taint free, or will the tainting authorities peel off a bit of taint from all the transaction fees included in that block reward?  They'd be introducing the idea of "original taint."  

Right now, blockchain.info considers newly created coins as untainted but this could be changed retroactively.  


Actually, right now there is no such thing as taint.  There are no entities who can compute it, but efforts are underway and they will be successful to some degree on a technical level.  To be successful otherwise simply means forming a relationship with regulators who are working on a 'bitcoin license' for businesses, and I have little doubt that they'll be successful in this sphere.

My suspicion is that there will be a phased roll-in culminating eventually in all BTC values which are not declared as property of a specific individual or entity being tainted.  This would include 'newly minted' BTC which don't comply by virtue of it being a simple and mechanical requirement.

---

If it is not obvious, these are all simply my own conjectures on how things will, or could, proceed.  Take them for what they are worth.  Better yet, formulate your own!  Let's kick them around to figure out how much of a threat they actually are and what we can do about them.


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March 11, 2014, 09:39:54 PM
 #7825

...coin taint...

Tvbcof, do you expect coinbase transactions (newly-created coins) to be considered taint free, or will the tainting authorities peel off a bit of taint from all the transaction fees included in that block reward?  They'd be introducing the idea of "original taint."  

Right now, blockchain.info considers newly created coins as untainted but this could be changed retroactively.  


Actually, right now there is no such thing as taint.  There are no entities who can compute it, but efforts are underway and they will be successful to some degree on a technical level.  To be successful otherwise simply means forming a relationship with regulators who are working on a 'bitcoin license' for businesses, and I have little doubt that they'll be successful in this sphere.

My suspicion is that there will be a phased roll-in culminating eventually in all BTC values which are not declared as property of a specific individual or entity being tainted.  This would include 'newly minted' BTC which don't comply by virtue of it being a simple and mechanical requirement.

---

If it is not obvious, these are all simply my own conjectures on how things will, or could, proceed.  Take them for what they are worth.  Better yet, formulate your own!  Let's kick them around to figure out how much of a threat they actually are and what we can do about them.



Not sure what this has to do with gold but taint as a technical proposition is all but dead ... dyodd.

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March 11, 2014, 09:46:14 PM
 #7826

I'm sorry if I'm a bit off topic, but I would like to signal all of you the story of Patrick Byrne, CEO of Overstock, one of the biggest (maybe the bigger?) retails in the world accepting bitcoins:

http://www.wired.com/business/2014/02/rise-fall-rise-patrick-byrne/

The usual thought is that he began accepting them for marketing purposes while in reality he don't give a shit about Bitcoin.

Short answer: quite the opposite.

Read it, it's worth your time.

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March 11, 2014, 10:17:02 PM
 #7827

...
Not sure what this has to do with gold but taint as a technical proposition is all but dead ... dyodd.

If you are implying that native transactions are not practical to trace, I'll bet you are wrong.

If you are implying that cloaking technologies are effective, I'll posit that a solution to that would be to taint coins which use them by default.  And further that it would be politically acceptable to a most 'normal' people.

I'll point out that the technical solution only has to be mildly believable to support the political goals.  A fall-back if even that is not achievable is to taint coins simply by virtue of them not being traceable (e.g., 'registered'.)

I am quite certain that Coinbase and TigerDirect/Overstock would honor taint as defined by whatever authority had a regulatory charter.  The retailers might just decide to forget about Bitcoin, but Coinbase does not have that luxury.

You can bet that taint will not be a factor that we'll need to deal with in the Bitcoin ecosystem as we move forward, and I do hope you are right(*), but I'm not going to make that bet.

* Actually I only half-way hope that since I have what will probably end up being clean coins in almost any scenario, and will register them (albeit with disgust) if I need to in order to maximize their value...and justify it on the basis that it was necessary due to a design, implementation, and prioritization flaw which I was not responsible for.  And, of course, there will be something more interesting to move into in distributed crypto-currency-land.


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March 12, 2014, 01:04:04 PM
 #7828

Does anyone consider that there are 200+ countries in the world, and 96% of their population is not American, and about 60% of the bitcoins are not? Does it have any practical significance?

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March 12, 2014, 03:02:25 PM
 #7829

Does anyone consider that there are 200+ countries in the world, and 96% of their population is not American, and about 60% of the bitcoins are not? Does it have any practical significance?

Probably the result of education availability and existing capital concentrations

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March 12, 2014, 06:52:37 PM
 #7830

Does anyone consider that there are 200+ countries in the world, and 96% of their population is not American, and about 60% of the bitcoins are not? Does it have any practical significance?

Agreed that is seems many are over estimating the US's influence.

I think you are making several mistakes:

1) Most nations are likely to follow the U.S.'s lead for a variety of reasons.  Whatever methods the U.S. uses to promote taint will be followed by the aligned nations (or more offensively, our vassal states known colloquially as 'the free world') and the methods used by the non-aligned states will be probably even more draconian.

I think you are misunderstanding why most nations follow the US "lead" today, and why it is different with Bitcoin.

The simple reason why many nations follow US rules regarding money is the US if the reserve currency. As such the US can say "you (Russia) have to follow our regulations x, y & z regarding money and if you do not we will remove you from the FED depository system." Without access to the FED entire nations can not trade since the dollar is the world's reserve currency and all trade happens in US dollars.

But with Bitcoin the US has no control and mechanism to enforce its self declared rules. In fact, most nations are actively looking to get out of the thumb of the US, have you picked up a newspaper recently and seen not just Russia's maneuvers but also Chinese, Indian and many others response?
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March 12, 2014, 08:07:28 PM
 #7831

Does anyone consider that there are 200+ countries in the world, and 96% of their population is not American, and about 60% of the bitcoins are not? Does it have any practical significance?

It is difficult to imagine the EU not employing a similar scheme, so that's another 30 developed world countries to cross off the list. Hong Kong or Singapore might be safe for a while, but I agree with your basic premise, as it's unworkable in practice anyway. No-one considers the issue where one person accepts BTC after checking it's clean, but then the crime report taints it some time afterwards. Fixed supply currency will be unworkable like this, so all jurisdictions enforcing clean lists will see the cryptocurrency (and it's benefits) disappear.

Vires in numeris
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March 13, 2014, 03:05:32 AM
 #7832

Moonage time !
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March 15, 2014, 09:52:15 PM
 #7833

Does anyone consider that there are 200+ countries in the world, and 96% of their population is not American, and about 60% of the bitcoins are not? Does it have any practical significance?

Agreed that is seems many are over estimating the US's influence.

Every country is bankrupt with $223 trillion in global debt. They all need to ramp up taxation compliance. There is a big push in the Philippines about it all over the news every day (obviously being pushed by the PTB that control the media).

Coin taint is going to be intertwinded with tax compliance, because the government will say "prove you didn't mine it and sell it to yourself numerous times?".

So you have to prove the identities of whom you bought and sold your coins.


I think you are making several mistakes:

1) Most nations are likely to follow the U.S.'s lead for a variety of reasons.  Whatever methods the U.S. uses to promote taint will be followed by the aligned nations (or more offensively, our vassal states known colloquially as 'the free world') and the methods used by the non-aligned states will be probably even more draconian.

I think you are misunderstanding why most nations follow the US "lead" today, and why it is different with Bitcoin.

The simple reason why many nations follow US rules regarding money is the US if the reserve currency. As such the US can say "you (Russia) have to follow our regulations x, y & z regarding money and if you do not we will remove you from the FED depository system." Without access to the FED entire nations can not trade since the dollar is the world's reserve currency and all trade happens in US dollars.

But with Bitcoin the US has no control and mechanism to enforce its self declared rules. In fact, most nations are actively looking to get out of the thumb of the US, have you picked up a newspaper recently and seen not just Russia's maneuvers but also Chinese, Indian and many others response?

Yet you forgot a small detail. Russia and China banned Bitcoin.  Roll Eyes

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March 15, 2014, 11:03:39 PM
 #7834

Yet you forgot a small detail. Russia and China banned Bitcoin.  Roll Eyes

it's not just about bitcoin, but about any conversion of anything in fiat.
Until one can spend btc /cryptocoins directly he's quite immune to any state's threat. And that's where we should try to move towards.

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March 19, 2014, 08:08:58 PM
 #7835

Gold smackdown today.  MIners were telegraphing the FOMC decision.  Look out.

Bitcoin stable.  Things are lining up.
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March 20, 2014, 01:03:18 AM
 #7836

Gold smackdown today.  MIners were telegraphing the FOMC decision.  Look out.

Bitcoin stable.  Things are lining up.

Very confrimed.

Edit: Where were you when gold was at $1380 a few days ago?  Just stopping by to gloat over a correction?  K.
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March 20, 2014, 01:43:24 AM
 #7837

Gold smackdown today.  MIners were telegraphing the FOMC decision.  Look out.

Bitcoin stable.  Things are lining up.

Very confrimed.

Edit: Where were you when gold was at $1380 a few days ago?  Just stopping by to gloat over a correction?  K.

No need to comment everyday when the long term trend is down.
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March 20, 2014, 03:12:04 AM
 #7838

Gold smackdown today.  MIners were telegraphing the FOMC decision.  Look out.

Bitcoin stable.  Things are lining up.

Very confrimed.

Edit: Where were you when gold was at $1380 a few days ago?  Just stopping by to gloat over a correction?  K.

No need to comment everyday when the long term trend is down.

People pay for your advice?  Fascinating.
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March 20, 2014, 03:28:27 AM
 #7839

Gold smackdown today.  MIners were telegraphing the FOMC decision.  Look out.

Bitcoin stable.  Things are lining up.

Very confrimed.

Edit: Where were you when gold was at $1380 a few days ago?  Just stopping by to gloat over a correction?  K.

No need to comment everyday when the long term trend is down.

People pay for your advice?  Fascinating.

And they listen to yours?

I doubt it.
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March 20, 2014, 05:06:40 AM
 #7840

Gold smackdown today.  MIners were telegraphing the FOMC decision.  Look out.

Bitcoin stable.  Things are lining up.

Very confrimed.

Edit: Where were you when gold was at $1380 a few days ago?  Just stopping by to gloat over a correction?  K.

No need to comment everyday when the long term trend is down.

Gold is down from $300 long term?
Well heck why not from $30.  Or perhaps $0 from the times before the US Dollar existed. 
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