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bitplane (OP)
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June 23, 2012, 03:24:54 PM |
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Let's assume that Bitcoin catches on in the future and is used for all kinds of online payments by a huge number of legitimate businesses. What happens when a large political power, like the USA or EU, decides to regulate Bitcoin within their borders by regulating the rules used by clients?
Merchants and traders would have to adhere to the new rules, which I'm guessing would make Bitcoin fall out of favour or fork the block chain dividing the currency into regional networks. At this point we'd have lots of local currencies depending on regulations enforced by local government.
Anyone care to speculate on what would happen in this case, or why it won't/can't happen?
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There are several different types of Bitcoin clients. The most secure are full nodes like Bitcoin Core, which will follow the rules of the network no matter what miners do. Even if every miner decided to create 1000 bitcoins per block, full nodes would stick to the rules and reject those blocks.
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Phinnaeus Gage
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June 23, 2012, 03:36:01 PM |
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Let's assume that Bitcoin catches on in the future and is used for all kinds of online payments by a huge number of legitimate businesses. What happens when a large political power, like the USA or EU, decides to regulate Bitcoin within their borders by regulating the rules used by clients?
Merchants and traders would have to adhere to the new rules, which I'm guessing would make Bitcoin fall out of favour or fork the block chain dividing the currency into regional networks. At this point we'd have lots of local currencies depending on regulations enforced by local government.
Anyone care to speculate on what would happen in this case, or why it won't/can't happen?
Watching! I love the way you posed your question(s), bitplane. ~Bruno~ |
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mobile4ever
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June 23, 2012, 04:01:35 PM |
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Merchants and traders would have to adhere to the new rules,
Well, that is just it. People who use BTC do not have to adhere to the rules. The money is not the property of the politicians, it belongs to those who use it. If you live in a communist country it could become a problem, though. I can imagine Castro making up some crazy rule and trying to kill those who break it. Liberty is a powerful thing and the wrong people do not like it. |
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edd
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June 23, 2012, 04:05:10 PM |
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No government can simply decide to insert its own rules or restrictions into Bitcoin as it exists today and a fork different enough to allow it would be almost unrecognizable as related to the original client. It would be much easier for them to simply follow Canada's example and issue their own digital currency and then outlaw the use of Bitcoin. This wouldn't necessarily cause it to "fall out of favor" but would force legitimate businesses already accepting it to decide whether or not they wanted to fight or flaunt the applicable laws. If anything, I think this would increase Bitcoin's appeal as an underdog/Robin Hood player although one would have to use more discretion with transactions.
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Still around.
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Spekulatius
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June 23, 2012, 04:24:32 PM |
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Bitcoin would not have to fork for its users to become subject of heavy law enforcement. I imagine it much like the current situation where currency transactions of any kind are already regulated and enforced, even face to face transactions are subject to law enforcement once they reach a significant amount. So, if any gov decides to monitor bitcoin transactions, all they have to do is to make identification and use of traceable addresses compulsory for the users in their jurisdiction.
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unclescrooge
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June 23, 2012, 04:36:20 PM |
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The politicans decisions apply only to those who obey them  And the bitcoin economy that is currently emerging is an economy where politicians and governments and their corporate allies have not role to play. EDIT: All the wonderful tools that emerge nowadays thanks to internet are tools that allow people to organize themselves without the State. So yes, expect the State to fight back. But its fight is doomed to fail. |
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Explodicle
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June 23, 2012, 04:54:39 PM |
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Assuming it works and people actually run the fork, then it would be incredibly easy to exchange Statecoins for Bitcoins online. The exchange is our biggest weak point, so as long as a decentralized irreversible system exists, we benefit.
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Cryptoman
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June 23, 2012, 05:22:10 PM |
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I can imagine Castro making up some crazy rule and trying to kill those who break it. Liberty is a powerful thing and the wrong people do not like it.
I can imagine the U.S. Congress passing a stupid law and trying to kill (or at least imprison) those who break it. Liberty is a powerful thing, and U.S. politicians do not like it being in the hands of the people. |
"A small body of determined spirits fired by an unquenchable faith in their mission can alter the course of history." --Gandhi
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bitplane (OP)
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June 23, 2012, 05:39:05 PM |
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Assuming it works and people actually run the fork, then it would be incredibly easy to exchange Statecoins for Bitcoins online. The exchange is our biggest weak point, so as long as a decentralized irreversible system exists, we benefit.
Yeah and as holders of Bitcoin today, we'd own shares in each of the block chains that came after the fork. Hopefully they will be worth more than the originals in the long run. |
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hazek
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June 23, 2012, 05:45:21 PM |
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It's simple: those who want to, can follow their rules and those who don't want to, need not follow their rules. Besides there are enough tools available to hide your "illegal" use of Bitcoin that I think no one will ever follow any rules other than the agreed upon Bitcoin rules they have to follow if they want to use it.
I do think if they ban the use of Bitcoin in a certain country people in that country will have a slightly harder time getting some which may result in a price drop due to a diminished demand especially if that country is one where most of the current demand comes from.
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FreeMoney
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June 23, 2012, 07:14:11 PM |
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The government can easily get away with calling things by their wrong name (defense, lol), but it won't change the fact that the 'bitcoins' the government sends you won't work.
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Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone. |
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bitplane (OP)
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June 24, 2012, 04:39:42 AM |
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It's simple: those who want to, can follow their rules and those who don't want to, need not follow their rules. Besides there are enough tools available to hide your "illegal" use of Bitcoin that I think no one will ever follow any rules other than the agreed upon Bitcoin rules they have to follow if they want to use it. I said assume it catches on and replaces PayPal or Visa. At this point governments will regulate it, and they *may* do this by adjusting the rules of the network. For example they may publish a blacklist of known money laundering accounts and say that a valid block must not contain transactions from accounts in that blacklist, or maybe they'll go for a whitelist approach and force people to register their addresses for tax reasons, maybe they'll put some central override in for returning stolen coins. Whatever those rule changes it will create a regional fork the block-chain, legitimate merchants in the affected region won't be able to accept vanilla BTC and this will fuck with the economy. |
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Bitcoin Oz
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June 24, 2012, 05:03:41 AM |
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What happens when bitcoin forks the government ?
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Kluge
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June 24, 2012, 05:09:02 AM |
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What happens when bitcoin forks the government?
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zebedee
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June 24, 2012, 01:09:08 PM |
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What happens when bitcoin forks the government ?
Lol, best thing I read all day! |
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gilgil
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June 24, 2012, 02:41:25 PM |
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As with any changes to the bitcoin protocol, you have to have more than 50% of the hashing power accepting those changes, otherwise you're just wasting electricity...
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hazek
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June 24, 2012, 02:54:58 PM |
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As with any changes to the bitcoin protocol, you have to have more than 50% of the hashing power accepting those changes, otherwise you're just wasting electricity...
That's not true. The 51% hashing power attack allows only to carry out the double spend attack.. Anyone with a single CPU miner can fork the chain with different rules. |
My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)
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FreeMoney
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June 24, 2012, 03:23:37 PM |
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As with any changes to the bitcoin protocol, you have to have more than 50% of the hashing power accepting those changes, otherwise you're just wasting electricity...
That's not true. The 51% hashing power attack allows only to carry out the double spend attack.. Anyone with a single CPU miner can fork the chain with different rules. Yeah. There have already been forks with little power or interest. They could have stupidly called themselves Bitcoin also. Also, even a majority of miners playing by new rules won't change the fact that merchants will still want the real thing. Bitcoin isn't valuable because miners burn up energy mining it, it is valuable because merchants will give you something you want for it. |
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gilgil
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June 24, 2012, 03:31:30 PM |
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As with any changes to the bitcoin protocol, you have to have more than 50% of the hashing power accepting those changes, otherwise you're just wasting electricity...
That's not true. The 51% hashing power attack allows only to carry out the double spend attack.. Anyone with a single CPU miner can fork the chain with different rules. As I understand the protocol (pls correct me if I'm wrong), if a mining node or group of nodes decide to change bitcoin rules, the blocks they submit will be rejected by genuine bitcoin nodes, right? So these guys will be trading something, but it won't be bitcoin... If they want to join back the genuine bitcoin blockchain, they have to throw away all their effort (the alternative chain), unless they have more than 50% of the hashing power, in which case the alternative chain will win. |
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Transisto
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June 24, 2012, 03:34:08 PM |
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As with any changes to the bitcoin protocol, you have to have more than 50% of the hashing power accepting those changes, otherwise you're just wasting electricity...
That's not true. The 51% hashing power attack allows only to carry out the double spend attack.. Anyone with a single CPU miner can fork the chain with different rules. As I understand the protocol (pls correct me if I'm wrong), if a mining node or group of nodes decide to change bitcoin rules, the blocks they submit will be rejected by genuine bitcoin nodes, right? So these guys will be trading something, but it won't be bitcoin... If they want to join back the genuine bitcoin blockchain, they have to throw away all their effort (the alternative chain), unless they have more than 50% of the hashing power, in which case the alternative chain will win. If they really want to, they'll have that 51%, "it's to protect the public", so they'll say. |
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