Ask Slashdot: Should Bitcoin Be Regulated?

Nerval's Lobster writes "Federal regulators are starting to make noise about Bitcoin, the digital currency that's gained in recognition and value over the past few years: the Treasury Department's Financial Crimes Enforcement Network (FinCEN) is offering up 'guidance' for digital currency and those who use it as part of commerce. But the Bitcoin Foundation, which is devoted to standardizing and promoting the currency, doesn't like that idea; as Patric Murck, the organization's general counsel, wrote in a March 19 blog posting: 'If FinCEN would like to expand its statutory authority over "money transmitters" to include brand new categories such as "administrators" and "exchangers" of digital currency it must do so through proper rulemaking proceedings and not by fiat.' If Bitcoin continues to gain in value, it could spark a rise in virtual currencies—and force some very interesting discussions over regulation. But here's the question: would regulation actually be good for Bitcoin, if it made organizations and businesses more comfortable with using it as a currency?"

Comments

Confused

[Anonymous Coward]

How can your regulate something that you do not or can not control?

Re:White paper on EXACTLY what a bitcoin is, pleas

[GrandCow]

I've looked, didn't find it. I just found some vague mumbo about cryptography with a ton of loaded buzzwords.

I want specifics.

1.) What is a bitcoin, EXACTLY?
2.) How divisible is a single bitcoin?
3.) All the specifics of any relevant protocols.

You looked at what? First result of a google for "bitcoin white paper" is http://bitcoin.org/bitcoin.pdf, the white paper originally released by the creator of bitcoin.

Knock it off with that quote

[Sycraft-fu]

Or, go move to the Democratic Republic of the Congo or other similar place with effectively no government and see how unlimited liberty really works. Turns out that when there's no regulation, when people can do whatever they please you get a lot of people who's idea of "freedom" is "the freedom to oppress, kill, and harm others."

There's a reason why free nations actually end up needing a government, laws, regulations, and all that kind of shit. You have to keep people form shitting on the rights of others. If you don't, some people will, it is just the way humans are.

Some security is necessary if we want individual liberty, and if we want to be able to live and enjoy that liberty. That does not mean that all security is good, that we should trade off liberty for no reason (like with the TSA, which isn't even useful security wise and is just a dong and pony show) but stop quoting this like it is some kind of maxim, like we should just toss out all regulation and let people do whatever the fuck they want. We can see, time and time again, in history what happens when that goes on. the result is not good.

Already is regulated

[michaelmalak]

https://en.bitcoin.it/wiki/Tax_compliance#Are_my_bitcoins_taxed_as_income.2C_or_as_capital_gains.3F

Are my bitcoins taxed as income, or as capital gains?

Income that is earned through the exchange of services with another person, whether in the form of bitcoins, dollars, or barter; is included in gross income, and would be subject to income tax at applicable rates. Also these bitcoins could be subject to self employment tax.

In some jurisdictions, income earned through the process of buying and selling bitcoins would also be included in gross income, but would be treated as capital gains.

Note: The above interpretation is based on the assumption bitcoins are treated as a store of value such as gold, or other such commodity. If instead they are treated as a currency or debt, the full gain could be taxed based on market value at the end of each tax year. 3858 IRS Ends Currency ETN Adantage Simply put, the IRS never considers currency a long-term investment. Consequently, if bitcoins are treated as a currency, you will be taxed the same as holding an account in any non-functional (foreign) currency.

I.e. if bitcoins are treated the same as gold coins, then for every transaction, one must calculate the capital gains or loss, and pay 28% tax on the total net gain on Form 1040 Schedule D. For anyone who tries to comply with U.S. tax code, such as those seeking political office or security clearance, this makes it impractical to use bitcoins for everyday transactions, and practical only for occasional, large transactions such as investing in bitcoins for the medium or long term.

your missing the point

[detain]

bitcoin isnt a popularity contest, its an open distributed currency that was originally created to get away from the current system. asking if government regulation is a good tradeoff for increased popularity means you clearly dont get why people created bitcoin or are switching to bitcoin

yes

[houbou]

all forms of currency should be regulated, else there will be abuse, it's that simple and it's been proven historically over and over again.. Even today, normal currency gets counterfeited.. So, digital currency can't?

Re:yes

[Anonymous Coward]

No, bitcoin can't be counterfeited, that's kinda the point. Distributed transaction history shows source of every satoshi.