Slashdot Mirror
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?"
It should if you want it to be as legitimate as the dollar.*
* That's a joke son.
How can your regulate something that you do not or can not control?
Here's another pointless story to remind you to invest in it! You'll be a billionaire!
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.
PS: I don't reply to ACs.
If Slashdot now sponsored by the Bitcoin promotional council or something?
seems like a story a day about it this week, I do find Bitcoin fairly interesting, but not reading about slightly different thoughts on it every day...
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.
"Well kids, you tried your best, and you failed. The lesson is, never try." -Homer Simpson
Let's not get confused here, people.
1. Government doesn't care about stability. They care about being able to tax it.
2. Government doesn't care about stability. They care about being able to tax it.
3. Government doesn't care about stability. They care about being able to tax it.
4. Government doesn't care about stability. They care about being able to tax it.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
It might be a joke but it raises the question: whose dollar? As a virtual currency whose regulations will apply to a transaction when, for example, one person is in Europe and another in the US?
If it moves, tax it.
If it keeps moving, regulate it.
If it stops moving, subsidize it.
In all seriousness:
If regulation is based out if the USA that will make it a no-go for me. The US already illegally snoops my EU-based bank account, illegally gets my UK-based purchase data and has illegally obtained SWIFT data in the past. A US-based regulator is not to be trusted.
Work like no one is watching. Dance like you've never been hurt. Make love like you don't need the money.
Wow, that's an entirely laughable concept. Its quite easy to regulate- make it illegal to accept it as payment, and arrest anyone who takes payment in it. It wouldn't entirely stamp it out, but it would make it useless in day to day commerce, which will relegate it to a niche in black market trades at best. In reality it would pretty much kill it in any country that did it- normal people are not going to use a currency where you have to track down an underground website thats constantly being changed in order to buy groceries.
I still have more fans than freaks. WTF is wrong with you people?
bitcoin already is regulated, it's just difficult for .gov to track so many people do not report their income and the banks like mtgox don't follow the rules.
Snowden and Manning are heroes.
Perhaps a more pertinent question would be this - if an international currency is to be regulated, who should be in charge of the regulation? Who has jurisdiction?
In science fiction (at least, in games, not so sure about literature) we often see the term 'credit' used to refer to some vague internationally accepted currency. But if such a thing existed (and bitcoin might be heading that way), who sets the rules on it? if it's 'every country', then the concept breaks down and the currency becomes unworkable as you start having to track too much to use it. If it's the UN? I don't see the US ever accepting that.
So that leaves the only workable answer as the originators or the currency.
Regardless, different nations can tax transactions in the currency with the same rules they use for domestic currencies. If the currency is processed by a domestic bank or financial institution, they'd have to process it in much the same way as they would any other transaction. So it seems the simplest way to handle these things is just to make it clear in the law (if it isn't already) that all transactions, regardless of currency, must adhere to the same rules.
Exchanges have been compromised, customers have lost money, basic protections are absent. It is used freely for the silk road drug trade, hiding money from governments and evading taxes. Can anyone seriously make the argument that it won't be regulated?
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.
https://en.bitcoin.it/wiki/Tax_compliance#Are_my_bitcoins_taxed_as_income.2C_or_as_capital_gains.3F
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.
Please check out http://bitcoin.stackexchange.com/ for questions and answers like these!
Colin Dean Go a year without DRM
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
http://interserver.net/
One (or more than one) of the editors/staff is in to it and thus they push it here. Bitcoin is only valuable so long as people keep giving a shit and buying in to it. If suddenly everyone ignored it, the value would drop to zero. It has no national economy behind it, there are no taxes you can pay with it, there is no reason to hold it unless you are playing the bubble game with it. So those in Bitcoins need it to keep getting hype.
One of the founders of a currency designed from the ground up to be resilient to Government intervention, is now complaining that the Government wants to intervene. Have they realised they failed in their mission (which at this point, I think is too early to say) or were they naively hoping it would never actually happen. Or maybe, the anti Big Brother thing was just marketing and they actually expected the whole thing to collapse (and they would have cashed out) long before that point.
Money is a "I owe you" As long as we play the game and use fiat money the governments can regulate but there are so many kinds of alternative currencies becoming more popular.
It is quite common to do a plumbing job for a mate and have the mate come around one weekend to build a fence. I owe you. Currencies can take so many forms and those that are trusted will become main stream.
After I have done a plumbing job for my mate he owes me building a fence. However, I don't need a fence but my neighbor who is a baker does. What I do need is bread. I can go to the baker and pass on my mates debt of building a fence to the baker in exchange for bread but if my mate has a bad reputation and the baker doesn't trust my mates promise then there can't be a deal.
Governments can only regulate through compulsion. Fiat money that may not be refused as a legal tender. But with bitcoin, they don't appear in the game at all. I like that.
Clearly everybody involved with Bitcoin does not want to be regulated - if they did it would have been designed differently.
So the actual question here is, "should an unregulated currency be allowed to exist?" Or, without the euphemisms and passive voice, "should we bust the heads of people who use an unregulated digital currency?"
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
No, bitcoin can't be counterfeited, that's kinda the point. Distributed transaction history shows source of every satoshi.
Show me how you can -truly- counterfeit gold/silver, the only things that have been historically always accepted as money. Sure, you can try to fake it with brass/white metal but under any sort of inspection it fails miserably, its density won't be close to gold and so it will either be the wrong weight or wrong diameter. You can try to fake gold with tungsten but, in all but the largest bars, a simple punch (like what you see on silver/gold bullion ranging from antiquity to present) will bring the counterfeit to light.
Sure, you can counterfeit fiat currency but it isn't money and it will be counterfeited all the time by the issuing authorities. The deathblow of EVERY fiat currency has been death by hyperinflation. The US dollar and bitcoin are no exceptions.
Taxation is legalized theft, no more, no less.
Bitcoin will surely come down from current levels. That's because, there is a constant downward pressure on price, due to mining.
Energy spent on mining is probably the biggest part of total costs of running Bitcoin network. Also, this energy is easy to predict, because energy spent on mining is a simple function of Bitcoin price and average total block awards. This is because mining has very low barrier of entry, and this ensures that as long as it is profitable, new miners will join, until the most inefficient miners are at the break-even point. And the most profitable miners will try to expand their operation.
This makes it that each block costs somewhere around (0.5 * block award * price) to (0.75 * block award * price). And since awards are paid in Bitcoins and electricity is paid in local currencies, this makes the situation that all mining costs hit the exchanges every day, and push the price down.
This can currently be estimated to be $150.000 to $250.000 each day (using price of $90), and this amount of fresh money must enter the exchanges every day, or the price will go down. Currently, this money comes in from "suckers".
At this point we have a temporary delay in the "mining difficulty follows price" process , because of the change in technology and delays in deliveries of ASIC miners, so mining is very profitable at this point, and this reduces the selling pressure on exchanges. This, plus block award halving is why we have this current Bitcoin bubble.
And this bubble will end soon, because of the process described above.
I am just not keen on the idea of the US government being the one to do it.
Is Bitcoin restricted to the US only? In that case, it would be up to the US to look after its own.
The problem is that the US government regularly shows that it has as much idea about "international" as I have about gynaecology. It's complicated, do do with other people and it really helps if you actually know where the patient is.
You can tell the suitability of someone to have any say in something trans national if you find out how they feel about it being regulated by a UN body.Yes the UN contains corruption but so does every government in the world and the US one is well known to be in corporate pockets to an impressive degree.
Sure Congress can identify Bitcoin use as gambling or something and that will keep it under control of the Mafia where it belongs but fortunately, the remaining 96% of humanity can ignore their veniality.
I'll see your Constitution and raise you a Queen.
>admins SHOULD have known/built tracking in
What do you mean "should have"? Bitcoin is probably the most trackable currency ever created - anyone who wants to can readily trace every transaction of every bitcoin back to the moment of it's first creation. It's only "anonymous" in that your name isn't directly attached to anything and you have the option of easily sending your coins through a shuffling (aka money laundering) service. The only difference where money laundering is concerned is that it's currently much more readily available so that anyone can play, rather than just the big boys as is the case with dollars, yuan, etc. The existence of money-laundering services has nothing to do with the currency itself.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
Let me end this right now. It's unregulateable. They can try to nip at the heels of the exchanges but other than that, it's impossible. Nobody runs it, nobody controls it. It's distributed, encrypted, and transactions cannot be modified or blocked or intercepted or duplicated. So that sort of makes any "decision" pointless.
I bet you're better off with out debit and credit cards anyway.
A loop, by its nature, continues. If that didn't make sense, start reading this sentence again.
Only the US government is permitted to create currency
Nope.
The constitution prohibits the states from making a legal tender of anything other than gold or silver. It also authorizes the federal government to issue coinage. It has no prohibition at all on private parties making coinage or scrip.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
I'm confused about which variables are linked to what here. It seems to me that the way you have linked the price of electricity, the price of bitcoins and the value of money is a little more complicated than a simpler demand and supply model could explain. I'm not sure that the price of electricity controls anything but how many people choose to mine instead of buy bitcoins. And I wouldn't think that the price of electricity would be involved much in determining the value of bitcoins themselves (because increased mining does not produce increased number of bitcoins as it does with other types of mining). Maybe you're not saying that it does, but I'm confused why it is mentioned then.
In my mind, yes, the constant availability of new bitcoins pushes the price down, but the new demand for bitcoins obviously pushes prices up. So long as the demand is increasing faster than the supply, prices would continue to increase, would they not? The value of a bitcoin is simply a quotient of how much money is invested in bitcoins divided by the total number of bitcoins on the market. And your statement about needing a certain number of dollars added to the market each day to support that seems to agree with that.
So in rating the value of bitcoins in terms of dollars, isn't it more about the number of dollars in the economy versus the number of bitcoins in the economy? So long as the number of dollars is increasing (dollar inflation) faster than the number of bitcoins (bitcoin inflation) as a percentage of the whole, bitcoins will continue to be a better investment than dollars.
But as I've probably made painfully obvious somewhere, I'm no economist, so what am I missing?
I was able to buy things with bitcoins, and sell bitcoins for dollars. That's real enough for me.
Regulation doesn't stop corporate elite from robbing us blind and committing all sorts of fraud with our money.
Fuck regulation, all it gets us is smoke and mirrors reassurances that don't have any teeth.
I'd say that bitcoin is better off staying wild and untamed. At least that way people KNOW not to be stupid with who they trust.
With dollars, people get lulled into a false sense of security.
With bitcoins people are naturally paranoid and are much more careful.
Mod parent up. US Banks have a long history of issuing their own dollars.(This was mainly true before the US Government started issuing paper currency.)
http://www.npr.org/blogs/money/2012/12/07/166747693/episode-421-the-birth-of-the-dollar-bill
Translating "Should Bitcoin Be Regulated?" into its plain meaning, that is, "Should peaceful Bitcoin users be threatened with harm, or harmed?" should yield the answer almost immediately: of course not, any more than any other peaceful people should be harmed, whether they want to sell or consume "large" sodas, trade or manufacture "high" (standard) capacity firearm magazines, use drugs, give food to the hungry, or engage in any other pursuit that is not directly harmful to other people or property. How can it ever be right to so threaten and harm peaceful individuals? And is not all regulation such a threat - give us money or we will harm you (take the money by force, cage you, murder you if you resist); conform to our requirements, even though you do no harm, or we will harm you? There is no case where such harm is justified.
Yeah, one more bitcoin story. I have an idea for a /. story - how about one on how Raspberry Pi's can be used to mine bitcoins? That should be a double whammy here for /., since they'd get to cover 2 of their pet topics.
So yes, all currencies are just theoretical constructs, they have value purely because we believe they do. Yes even in the case of things like gold coins. If the world suddenly decided to stop taking a currency, it would cease to be one. Money is only money if you can spend it, and money is only money if people do spend it.
However the difference is that US dollars are legal tender in the US. What that means is the government requires taxes to be paid in them, and so all of the country's residents who pay taxes, which is most adults that aren't retired, have to get US dollars to do so. Speaking of the retirement thing, it is also the currency that the government pays out to retirees. Also, the government requires it to be accepted for all debts. So if you owe someone in the US money, they have to accept its value in US dollars to settle the debt. They cannot require you to get another currency.
That little reality means that there will always be a good deal of interest in US dollars so long as the US exists. There are even more factors that make it much, much more desirable and useful, but so long as it is what you use to do business with the government and to settle debts, it is what will get used all over.
Same deal in other countries. If you move to Canada, you'll find you need Canadian dollars. There is a good deal of acceptance of US dollars there since there is a lot of tourism and the US dollar has a sort of special status as the world's reserve currency, but you can't function entirely in them. The Canadian government wants to be paid in Canadian dollars and you'll encounter other agencies that are the same. The fact that it is a national currency keeps it going.
More or less, national currencies are backed by the economy of that nation. Because of that economy, they are useful and valuable to at least the people in that nation.
Bitcoin has none of that. It is just some geeks faffing about that read Cryptonomicon and thought it was a guide, not a work of fiction. Very, very few places accept it, and they just use it for payments, they immediately convert it to a real currency. It fluctuates as much or more than a thinly traded stock, any currency that fluctuated like it did would be said to be in extreme crisis. It's value is almost entirely based on speculation. That means that for its value to hold or increase, the hype and speculation needs to continue. If it vanishes, the price will crash, perhaps down to zero.
Real currencies that actually get used as currencies don't need hype to keep them going.
Bitcoin is already regulated by somebody, so it is only a question of who gets to write the rules. It's a bit like PayPal - they do all the things a bank does, but they escape bank regulations by not calling themselves a bank - I don't think I need to reiterate all the complaints against PayPal, so I won't, but they are getting away with these things because they don't follow the normal banking rules.
The reason we have laws and standards regulating the handling and production of money is to protect society, ie mostly ordinary people. And the reason the rules have to be written by the legislature is that self-regulation never works in favour of people, it only works for the said industry. At least the government has to consider all the industries, and who knows, maybe even the people sometimes.
As far as I can see, somewhere behind Bitcoin there's a group of people who are making a profit from it, and whose profit would be diminished by having to follow rules meant to protect the ordinary user. I haven't been able to find out who they are; IMO, you should never trust a business who doesn't want to look you in the eye. There is nothing wrong with wanting to make money out of something, so why hide behind anonymity? It is certainly not because they are saintly idealists who only want the best for you. Remember the old saying: "If it's too good to be true ..."
"After the introduction of ASIC chips for mining, the barrier of entry has gotten significantly higher."
Not true. Before, any idiot could buy a $150 GPU and mine in his basement. Now, any idiot can buy a $150 ASIC card and mine in his basement.
If you want to see an example of a high barrier of entry, consider starting a gold mine.
"they only need to sell a fraction of the income to pay for electricity."
Until others join and that fraction becomes a significant part.