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?"
Here's another pointless story to remind you to invest in it! You'll be a billionaire!
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
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.
You might think bitcoin is impossible to control, but you're misinformed. The immediate rollback from 0.8 proves that all it requires is the large mining pools to reach a decision behind closed doors, and they'll implement whatever modified protocol they desire. The problem with such power being in the hands of the pools and large miners means all the government has to do is change them minds of 10 people, and they'll introduce whatever tracking/anti-laundering controls they desire right at the point of exchange.
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.
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.
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)
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.
Who wants to have control over this are people like Chuck Schumer. They get off on telling people what to do. If some dumbass wants to get high on weed, Chuck Schumer wants to put him in jail. Chuck Schumer also foolishly asked the DOJ to seize the Silk Road's domain name. Chuck Schumer and his kind don't like bitcoin because they can't control it. They can and do control mastercard, visa, and paypal. If the US government doesn't like you enough, they'll make sure nobody in the world can pay money to you electronically, even if they aren't trading in US currency.
As for banks? Banks will always be around, period. Besides, I'd rather banks exist than not. In fact, I know this is going to be controversial, but those scam check advance and title loan agencies should be around too. Why? When stupid people get desperate, they make stupid moves, which includes stupid borrowing choices. It's either they go to these companies, or they go to loan sharks. Loan sharks answer to nobody but themselves, and if these stupid people borrow from them, things get much worse. Unlike loan sharks, scam companies can't rough up your wife, break your legs, or shoot up your house. They don't fund organized crime, and it actually is possible to pay them off. When you think you've paid off a loan shark, chances are he says you were a minute too late to the meeting and you owe him double interest. Repeat forever. Loan sharks are NOT subject to usury laws.
Not only that, but regular people make money off of banks. I do it all the time. If you ever need to start a business, often times banks are the best source of quick capital. Need to buy a home? Same thing. I rather like it that banks exist.
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
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."
How can your regulate something that you do not or can not control?
So many posters here like to lament that lots of so-called "inventions" and patents are simply real world concepts with "on the internet" attached to it, so those should not be an invention nor should it be treated differently than their real life counterpart. E.g. selling songs on the Internet should be no different from selling songs on CD, i.e. you should be able to resell or lend it.
Yet when it comes to Bitcoin, which is practically "money ... on the Internet!", all common sense got thrown out of the window.
Cannot control? How can the government control the movements of small sheets of paper (i.e. cash)? Yet cash movement is still regulated. Same with small pieces of metal (i.e. gold, platinum, silver), or small bits of crystal (i.e. diamonds). Heck, even export of mathematical algorithms (encryption), information (movies, songs, classified documents) have been regulated in the past.
The real world is not WoW, the authorities can and do have laws in effect without first needing the ability to make that law impossible to break in the world. The law is not a game, you won't get away with something simply because the physical world do not prevent you from doing it like you do with using aimbots and cheats.
Bitcoin ARE already regulated just as everything of value is regulated. i.e. You can certainly _try_ to take a bag of diamond across border, and you will very likely succeed, though if you got caught, you will face harsh penalties. Similarly, you can certainly go ahead to transfer a large amounts of Bitcoins across borders, and you will most likely succeed without getting caught. But IF some law enforcement decided to target you, that transfer will be something they can get you punished for.
Oliver.
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.
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.
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 ..."