Chunk of Bitcoin Network Being Cut-Off Due to US Regulations

[NewLiberty]

Well but if the miners on that pool can simply change the pool they mine for (and that is the case) then how does this cut off 5% of the network.  Isn't it just that the hashing power moves to another pool?

Agreed. The only way that the network would lose percentages of hashing powers would be if BTC Guild operated their own mining equipment and then chose to shut this down. Otherwise members will only switch to other mining pools.

However, I think they're giving up too easily in this case. If they're profitable, and have amassed some funds, the first thing I would've done if I was them, if they truly believe in the concept of bitcoin, and are not just into it to make money, would be to move operations abroad. They have all the source code and knowledge, so they could establish themselves offshore, and in addition it would be possible to renounce their US citizenship to make their stance.

There's always the negative and positive consequences of every action, and if they chose to give in now, one can only assume that they chose that option, because it's the option that they think is best for them.

In my view however, although I don't at all like the regulatory environment that seems to become a reality, it's not the regulations that is shutting them down, but rather they're shutting themselves down because they can't or are unwilling to adapt to the new reality.

Heck, surely, if I personally had funds to set up shop offshore, and had to leave my current country because of regulatory uncertainty, I would do so in a heartbeat. However, if I did not believe so much in Bitcoin, I would rather shut it down and jump into any other business where I could make money.

As it's hard to know all the reasons why BTC Guild is deciding to shut down, pointing to the govt. and saying it's their fault we need to stop our business operations, is in my view giving up a little bit too easy.

They considered the option of moving abroad.  It would require personal sacrifices they were unwilling to undergo.

When Bitcoin people had to choose between Bitcoin and Apple iPhones, they posted videos of shooting holes in their iPhones this February, BC.info is back on the iPhone that June. 
The choice is what country to live in is somewhat more nuanced than which brand of phone to use. 

[Dabs]

There's always making the pool run over TOR, right?

[inBitweTrust]

With one aspect this is great news as it may inspire more miners in the US to use p2p mining instead. Hopefully, this will inspire the development of more decentralized pools.

[NewLiberty]

With one aspect this is great news as it may inspire more miners in the US to use p2p mining instead. Hopefully, this will inspire the development of more decentralized pools.

Yes there's silver linings to everything.  Take a bullet in the arm?  Learn to be more ambidextrous. 
Catch ebola?  Meet a nice nurse.
More business strangling regulation in one country?  See the world, start over with something new.
It is less easy to find the silver lining for the USA, sometimes bad regulatory decisions are just bad decisions.

[Bit N Roll]

Satoshi Dice is closed to US players too.  

http://www.coindesk.com/bitcoin-gaming-site-satoshidice-closes-to-us-players/

That article is over 18 months old.

But I think Satoshi Dice just made it official already.

[inBitweTrust]

More business strangling regulation in one country?  See the world, start over with something new.
It is less easy to find the silver lining for the USA, sometimes bad regulatory decisions are just bad decisions.

You are reading into my quote. I am not justifying these government actions and being an anarchist I certainly have no illusions about their ill intentions towards bitcoin despite how many times I hear them praise blockchain technology.

This is a war of ideals that is being fought right now and the quicker our community builds up an immunity to these expected attacks the better.

Using centralized mining pools is a security liability regardless if its an individual , gang, or government attacking.

[NewLiberty]

More business strangling regulation in one country?  See the world, start over with something new.
It is less easy to find the silver lining for the USA, sometimes bad regulatory decisions are just bad decisions.

You are reading into my quote. I am not justifying these government actions and being an anarchist I certainly have no illusions about their ill intentions towards bitcoin despite how many times I hear them praise blockchain technology.

This is a war of ideals that is being fought right now and the quicker our community builds up an immunity to these expected attacks the better.

Using centralized mining pools is a security liability regardless if its an individual , gang, or government attacking.

Yes, we do agree on all that.  Even though I don't claim to be an anarchist.

My point is that this is really just bad for the USA.
It is like the government is shooting itself.
i see no silver lining for them.

[inBitweTrust]

My point is that this is really just bad for the USA.
It is like the government is shooting itself.
i see no silver lining for them.

No, it isn't bad for the US Government. The US , Chinese, Russian, Bangladesh, Bolivian, Ecuador, and Iceland governments are acting in their own rational self interest. It is bad for the people and businesses within these geographical regions. While Blockchain technology certainly can be used by and benefit governments there are some intrinsic properties in the way Bitcoin is designed that subverts their authority and institutions.

If you don't understand why they are doing this and why they insist upon oversight and regulation you don't understand the raison d'être and purpose of Bitcoin in the first place.

Expect more governments to follow suite, Expect more regulation, and Expect much more resistance in the future when Bitcoin continues to grow and isn't merely a passing fad that they hope it to be.  

If bitcoin continues to be successful than governments will likely adapt and use coercive means to fund themselves focusing on property taxes, tickets, fines , and sales and VAT taxes rather than income taxes.

[NewLiberty]

My point is that this is really just bad for the USA.
It is like the government is shooting itself.
i see no silver lining for them.

No, it isn't bad for the US Government. The US , Chinese, Russian, Bangladesh, Bolivian, Ecuador, and Iceland governments are acting in their own rational self interest. It is bad for the people and businesses within these geographical regions. While Blockchain technology certainly can be used by and benefit governments there are some intrinsic properties in the way Bitcoin is designed that subverts their authority and institutions.

If you don't understand why they are doing this and why they insist upon oversight and regulation you don't understand the raison d'être and purpose of Bitcoin in the first place.

Expect more governments to follow suite, Expect more regulation, and Expect much more resistance in the future when Bitcoin continues to grow and isn't merely a passing fad that they hope it to be.  

If bitcoin continues to be successful than governments will likely adapt and use coercive means to fund themselves focusing on property taxes, tickets, fines , and sales and VAT taxes rather than income taxes.

It is bad for each of these governments.
Bitcoin has many purposes and raison d'être.  I think that I do understand these well enough.
Those governments that choose to fight it, will lose out in the endgame.

Ecuador appears to be taking an interesting approach, moving towards making bitcoin contraband, which would allow them to seize any they can (not an easy task though).
One wonders what will happen to any they do manage to steal in that way, they wouldn't be about to auction it like the US has done (in the same way the US doesn't auction the drugs it seizes as they are contraband).

[Cryptowatch.com]

Ecuador going to make it contraband?

Well, then that's one country off the list to visit then.

[QuestionAuthority]

Ecuador going to make it contraband?

Well, then that's one country off the list to visit then.

Oh noes! Not Ecuador! My God, there has to be at least 15 million people there. If we lose Trinidad and Tobago too - I'm out. ROFL

[NewLiberty]

Ecuador going to make it contraband?

Well, then that's one country off the list to visit then.

Oh noes! Not Ecuador! My God, there has to be at least 15 million people there. If we lose Trinidad and Tobago too - I'm out. ROFL

15 million people and 11 billion in debt, mostly to China.  
Their central bank plans to issue an electronic currency that inflates, pegged to their fiat, and can't bear competition.
I wish them luck.
They will need it.

[Eastwind]

Can they operate the pool server in another country and reside in US? Is that still be classified as US business? Can they close the pool  connection to US citizen?

[NewLiberty]

Can they operate the pool server in another country and reside in US? Is that still be classified as US business? Can they close the pool  connection to US citizen?

Not really a great option.
If you have assets in the US, those assets are at risk.  (This includes your fleshy freedom)  The bitcoin are everywhere that you are.
The US has laws against its citizens and businesses repatriating assets to avoid regulation.  You have to have a legitimate business reason to do it (other than the regs).
Even defending against such a case brought by the feds would be too expensive and too consuming to absorb the risk.
The decision makes me sad for the US government.