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Google Looks To Cut Funds To Illegal Sites
rbrandis writes "Google is in discussions with payment companies including Visa, MasterCard and PayPal to put illegal download websites out of existence by cutting off their funding. If Google goes ahead with the radical move, it would not mark the first time that illegal websites have been diminished or driven out of business by having a block put on their source of money."
It hasn't been declared illegal ... yet. Governments do tend to regard the minting of legal tender as their exclusive purview. The bitcoin community would do well to regard bit coins as "scrip" or "tokens" and not "currency." Lawyers love to sink their teeth into the legal definitions of words as opposed the common usage of words.
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I think this could be great, and have unintended consequences that end up strengthening piracy.
By driving out the for-profit pirates, you restore it to the hobbyists, who tend to have high standards and be somewhat fanatical.
This will probably damage piracy of the vapid "big media" movies, music, etc. but will enhance piracy of niche markets and specialty genres, which will strengthen those through the "try before buy" principle among those who are likely to buy them anyway, if they like them.
Google's policies have already somewhat achieved this model. Some of the best piracy for music at least is through Youtube these days. They take down the big acts, but you can find lots of obscure and older material (full albums) with a simple search.
In many ways, this is the resolution between pirates and industry. Industry gets to protect its big money makers, which if pirated result in a loss of profits because they are only purchased for a short term (novelty value). Pirates get access to the vast breadth of information available that isn't in that single protected category.
"innocent until proven guilty" only ever applied to criminal law. This is civil law at best. But more probably not even that. Visa and the other credit companies don't have to do business with any particular merchant. They are free to chose who to do business with and who not to.
The danger here, and not a legal one but a moral one, is that it may be that Visa and the other credit companies trust Google to tell them who not to do business with. I don't think Google have proven themselves to be trustworthy enough to make such decisions. And the scale of their operation suggests they might automate it. Not good.
The article refers to someone whose virtual currency "borrowed" significant elements from US currency. While his "medallions" weren't anywhere close to being replicas with US-mint-issued currency, there were enough elements to cause confusion about just who or what was backing the coins' value. Calling them "Liberty dollars" when that is the common name for a historical US coin probably didn't help.
If he'd minted them as "Liberty Money," used units other than "dollars," "cents," or any other past or present unit used by the US government, and avoided words, coin-sizes, and other attributes that might cause confusion he would likely have been free and clear legally. If he went further and put "not backed by any government" or similar words on all coins and paper-money products, that would've been even better.
His mistake wasn't making a second currency. His mistake was either not knowing the law and going out of his way to avoid even the appearance of violating it or knowing the law and being arrogant enough to dare the government to step in. If his goal was anything other than to go to jail, he failed. On the other hand, if his goal was to become a legal martyr and the money thing was just a means to an end, he succeeded.
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First, this requires that people are willing to sell, and if a single entity was buying up Bitcoins at that massive of a scale, you can bet the price (due to demand) would skyrocket. Then if the government effectively 'destroyed' said currency by not reintroducing it to the system, the value of the coins in the system (presuming a stable demand similar to what already exists), would remain high as the supply of coins would be drastically reduced. A government doing something like that would temporarily destabilize the market place, but wouldn't in any significant way impact the long term viability of bitcoins as a currency, if bit coins could bounce back from their 2011 market bubble, then obviously their viabilty as a currency can survive a period of temporary instability.
The demand for Bitcoin is predicated on the existence of exchanges that allow Bitcoin to be traded for fiat currencies. Those exchanges are easy targets for a government wishing to ban Bitcoin within its borders.
This would be a much more successful avenue of attack for a government trying to shut down bitcoins, however I think that it would be difficult to completely eradicate conversion between fiat currencies and bitcoins. All it takes is for one government to allow such a conversion to their local fiat currency, and you can convert that to litterally any other currency in the world. Sure it might take more hoops, but I'm sure there are more than a few nations that wouldn't mind some extra influx of value to their currency should a large portion of the world ban digital currency to fiat conversion.
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