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New York's Financial Regulator Subpoenas Bitcoin Companies
dreamstateseven writes "Things are getting serious for Bitcoin this month: a federal judge declared it real money, Bloomberg gave it an experimental ticker, Thailand declared it illegal, and now New York's financial regulator announced an interest in regulating it. The department is starting out by subpoenaing 22 digital-currency companies and investors to get a lay of the Bitcoin land. They sent letters to the major Bitcoin players asking them to hand over information regarding their money laundering controls, consumer protection practices, source of funding, pitch books (for Bitcoin start-ups) and investment strategies (for Bitcoin investors). Keep in mind, a subpoena doesn't mean criminal activity has taken place."
... although I have to admit that New Yorkers pretty much keep asking for that level of government meddling in their lives.
Thailand did not rule Bitcoin illegal. The head of the central bank of Thailand issued a preliminary ruling expressing that Bitcoin may be illegal because there are no laws that allow its use.
Think about that for a moment.
Read: http://qz.com/110164/thailands-infamous-bitcoin-crackdown-is-not-quite-what-it-seems/
Colin Dean Go a year without DRM
Bloomberg: "So let me get this straight... we can make money by just re-using computer time ***AND*** heat the subways? Who thinks up this stuff? I'm in!"
I deny that I have not avoided attaining the opposite of that which I do not want.
Oh come on, this is the sort of conspiracy thinking that has lead to Bitcoin being a perpetual source of amusement to the less tinfoil inclined.
Its a federal courts simply following procedure now that Bitcoin has been declared a currency. If its a currency there are legislative requirements, and the courts are just ensuring that the Bitcoin brigade are following that legislation.
Considering bitcoins history of being an enabler of all sorts of messed up scams, bitcoin users should be celebrating this. The fed is getting involved and thats [i]a good thing[/i] to non paranoid schizophrenics.
Excuse the Unicode crap in my posts. That's an apostrophe, and slashdot is busted.
Between bitcoin and something like WoW gold and similar virtual currencies? Why all the interest in bitcoin all of a relative sudden after decades of ignoring all the trade in other virtual currencies?
With risk comes reward or peril. In terms of BitCoins where regulators will tighten the grip will be the exchanges, that is unless you want a 100% decentralized currency in which every one trusts what everyone else has. Unfortunately for digital currency like this to actually work you have to have an arbitrator to say that you have X of whatever that can be considered tender for exchange. In the case of traditional currency you carry it around with you, paper or coin. In plastic currency you have a bank with Visa, MC or AMEX backing your transaction. What will happen is that BitCoin exchanges will become targets just like Mega Upload and will be branded as supporting terrorism or illegal trafficking in goods or for not operating within the guidelines of a financial institution, then all those BitCoins will suddently become worth about as much as the bits they're written on. Oh sure there may be some cat and mouse for awhile but eventually people will lose interest in it and go do something else with their ASICs.
For a digital currency to be truly viable it needs to be 100% distributed and invulnerable to regulatory intercession otherwise why bother?
Harrison's Postulate - "For every action there is an equal and opposite criticism"
I don't use (or care about) bitcoins; but if I had a choice, I'd rather deal with crooks than 'the government'.
one will rob me and then leave. the other will rob me and keep robbing me.
--
"It is now safe to switch off your computer."
Currencies don't enable scams. People enable and perpetrate scams. By your definition, the United States dollar has an incredibly long history of being the currency of choice for massively greater widespread scams and atrocities. What we're seeing here is nothing more than the preparatory work required to execute a good old fashioned regulation, taxation, restriction, and asphyxiation power grab. Governments get pretty pissed off when private entities engage in commerce of any kind outside of government control.
Have you ever held a garage sale? Did you make sure to report every penny of your earnings to the IRS?
Write failed: Broken pipe
Maybe they should figure out who actually created bitcoins, and figure out if he's sitting on millions of dollars of coins himself?
I don't buy that...
What this causes in inflated costs for exchanges and there will probably be no real additional security of your coin should you keep it there. What we will see is a monopoly form similar to paypal today for internet transactions or the handful of credit processing companies (visa/master card/american express/and discover). While the currency will be traded like cash in the offline world the second you want to convert that money into USD for offline transactions you'll be heavily penalized. The reason companies can charge such a low rate right now is because there is no burdensome regulations. The regulations will cause so much burden the competition will be non-existent. There is already very little competition. Mtgox is proof of that.
Considering bitcoins history of being an enabler of all sorts of messed up scams, bitcoin users should be celebrating this.
You mean like legislation has somehow prevented cash from being used for a trillion times as much [whatever the bad stuff you figure bitcoin is being used for]?
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
So which heading do you use for organized crime and antivirus vendors?
Bio questions? Ask me to start a Q&A journal. Computer analogies available for most topics!
BitCoin is not an anonymous currency. It was touted as such, but if one really wanted an anonymous currency, they would have used one of Chaum's ideas (DigiCash, anyone?)
Bitcoin is decentralized, not anonymous. The previous more anonymous cryptocurrencies were centralized. Centralized cryptocurrencies sound much easier to regulate.
from the fact that it is centralized (which can cause someone offline to get fucked if someone hands them some coins and then spends the same coins to someone else),
I have no idea what you're trying to say here.
to the tracability aspect
Bitcoin does have some privacy issues. Users are able to make it hard-to-follow their history if they try. I'm hoping some future Bitcoin improvements help make tracing harder. (BIP 32 could help as a side effect.)
to the fact that the whole system benefited the people who came in first and could grind the coins out on CPUs, no GPUs, FPGAs, or ASICs needed, as is needed these days.
I can't fathom a way that this sort of thing wouldn't happen with a new cryptocurrency in one way or another.
or the banks? Because you can't have it both ways: Either the government regulates money for various reasons (crime, abuse, economic stability) or it doesn't. You can't have a situation where the nifty "hacker" currency that you like is exempt for all regs and you can do what the fuck ever with it, but traditional monetary instruments are regulated to try and stop shit like what happened in 2008 (in no small part because of the repeal of many regulations).
So you have to decide how you feel about government regulation of the economy, currency, investments, etc, and then be consistent with it. Reason isn't just to not be a hypocrite (though that is a good one) but because if instruments and investments denominated in dollars are regulated but ones in Bitcoins are not, well guess what all the Wall Street scum will do? That's right, use Bitcoins.
If you're wanting to get a break on recorded income you have to figure out depreciation on every single item if you want a tax break (since even selling it at the same price you bought it may be considered a profit since it's value has depreciated.) Not sure if there's rules for appreciation as well but I spent far too much time reading up on this in regards to Cali/Federal tax laws when working out taxes were I to sell my car.
one will break your legs to repay a debt. One will just make you a little poorer.
or the banks? Because you can't have it both ways: Either the government regulates money for various reasons (crime, abuse, economic stability) or it doesn't.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
but because if instruments and investments denominated in dollars are regulated but ones in Bitcoins are not, well guess what all the Wall Street scum will do? That's right, use Bitcoins.
Crime is still crime, and theft is still theft. You don't need specific government regulations on marshmallows to make stealing them illegal, the same goes for Bitcoins. But here it is you who is trying to have it both ways: you are asking us to trust the government to regulate money and the "Wall Street scum", when that same government hasn't prosecuted anyone for the theft of billions that led to the financial crisis.
Whilst the right regulations would likely have stopped the financial crisis, the government doesn't need those regulations now to prosecute the people who caused the financial crisis because the obvious theft is still obvious theft. Think of regulations like a safe: stealing the money is still illegal whether it is locked up in a safe or not. Regulations would be welcome, but the problem we have is that the government has somehow chosen not to prosecute any bankers.
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
This is not regulating bitcoin. It's regulating financial institutions that handle bitcoin.
I have no problem with that. It's the best thing that could happen to encourage the bitcoin economy.
You make a great point. It's a simple question:
Do you want financial institutions such as banks and currency traders to be thoroughly regulated?
I'm betting many here would say "yes". "I mean yes, if it's a USD bank. Not if a Bitcoin bank or trader." "Let me rephrase, regulate traders who trade in dollars, euros, pesos and yen, but not in bitcoin".
What about the ones who trade in dollars, euros, yen AND bitcoin? Do you want Obama to come down hard on them?
The cognitive dissonance is thick in here .
Bitcoin exchanges do PRECISELY the same things that the "evil" Wall Street firms do. (Most of Wall St. is simply your mom's retirement savings being put to use building stores and such to earn her enough to retire.)
* autocorrect corrected "bitcoin" to "buffoon". Does the machine know something?
It also showed "virgin" as a possible correction for "bitcoin".
The exercise left to the reader is to determine which one is which?
For a digital currency to be truly viable it needs to be 100% distributed
Like BitCoin? What aspect needs to be improved?
and invulnerable to regulatory intercession otherwise why bother?
Isn't Bitcoin about as invulnerable as a digital currency can be? The government can declare it illegal and seize any computers used, but that is true for anything, not just digital currencies.
If a big enough player throws enough computing power after it, they can take over the network, but is there any way to avoid this kind of vulnerability? As far as I understand, it should be clear if this happens.
If any vulnerability in hashes is found, bitcoin could be in trouble, but we are in much larger trouble elsewhere if that happens.
This is utter nonsense - the US government is allowed to regulate anyone conducting financial transactions within the US. As I've said before, they don't care what those transactions are reckoned in - dollars, Bitcoins, or jars of hamster poop. The same rules apply to all of them.
Yep, you're right - all they need to do is ensure that Bitcoins follow the same rules as anyone else. Which is exactly what they're trying to do.
but traditional monetary instruments are regulated to try and stop shit like what happened in 2008 (in no small part because of the repeal of many regulations).
Man did you ever drink the kool-aid. What happened in 2008 was caused by wholesale looting and fraud that makes Enron look like a street corner game of three card monte. It makes no difference what or how many regulations there are if the regulators are in bed with the regulatees. If the regulators cause trouble they won't get their cushy 7 figure jobs with the companies they're supposed to be regulating after suffering through their 2 years of government service.
Who is John Galt?
Problem is, we already have it both ways. Big banks and Wall Street types are free to do whatever the fuck they want with money. And if they blow it all on hookers and coke, the government will just print more for them.
. Meanwhile, any joe trying to make what basically amounts to Gold Coins in an MMO will get subpoenaed deemed illegal in some countries, and otherwise harassed.
This signature is false.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
I believe your argument is flawed here, the US Government does regulate banks trading in the Euro if they reside in the United States. The fact they they are conducting business in the US gives them the right to do so.
GENERATION 9882463: The first time you see this, copy it into your sig & add a random number to the generation.
Result: Slashdot users hate the US Government more than they hate Bitcoin; well done USA!
Next up is POSS vs ICANN. Remember to get your bets in before the end of the day.
or the banks? Because you can't have it both ways: Either the government regulates money for various reasons (crime, abuse, economic stability) or it doesn't.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
If that's right, with what justification is the SEC already regulating financial instruments issued by banks and not the US gouvernment?
Various derivatives aren't defined ir issued by the US gouvernment either, but still regulated.
And please not that "regulating the Bitcoin" is still something different to "regulating financial transactions". The latter ones are just what they are: transactions, independant of the denominated currency.
bickerdyke
To be perfectly clear: the government can regulate uses of Bitcoin within it's jurisdiction. It cannot regulate Bitcoin proper.
The GP has a point. There's a self-consistent position which holds that the US should regulate its own currency, but not anyone else's currency. Someone holding that position would be in favour of the sort of regulation that would have prevented the recent unpleasantness on Wall Street, but against the government's current crackdown on Bitcoin, and they would be perfectly consistent in this.
Just wait 'till they get a load of other virtual currencies, like the Lindon Dollar, the WoW Gold, or Plex...
You can exchange USD between online game currency. Bitcoin is just WoW without the "wow". Regulate that. I fucking dare them. Some hornets nests are better left alone. So, If I make a Tetromino dropping game wrapper around it, then it's a different story that if I don't.... Right, because wasting time and resources to generate loot is so different than mining bitcoin.
Protip: We didn't used to have a country wide currency run by the Fed. The thing is, if one entity controls the currency then they basically own your sole, it's corrupt. That's why getting payed in credits for the company store is so damn heinous. Same goes for USD. Here's something interesting: I don't need to transfer BTC into any other currency to use it in trade for goods and services. Think about that in relation to other virtual currencies: "Hey, I'll give you this sick gear in-game if you paint my house." What's the difference between that and, "Hey, I'll wash your car for a year if you paint my house." Just because someone claims authority to something, doesn't mean they actually have it.
Regulators? We regulate any stealing of virtual property. We're damn good too. But you be any geek off wallstreet; Gotta be handy with the terminal if you know what I mean -- Earn your keep.
Regulators! Mount Up.
If that's right, with what justification is the SEC already regulating financial instruments issued by banks and not the US gouvernment?
The SEC exists to prevent corporations messing with their own share prices by cooking the books or insider trading. All those other derivatives that the SEC watches are an extension to this. It is to theoretically allow an even playing field on the stock market.
Obviously this doesn't apply to Bitcoin, since the intrinsic value of Bitcoins don't relate to the operation of an individual corporation. Additionally - Bitcoin is designed to be so independent that price fixing can't really occur - hence no need for the SEC.
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
Nobody stole anything, they simply stopped trusting the quality of each other's financial instruments . There is no evil hoard of bankers sitting atop a mountain of cash, the money simply evaporated because without trust, financial instruments are basically worthless.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
This is utter nonsense - the US government is allowed to regulate anyone conducting financial transactions within the US. As I've said before, they don't care what those transactions are reckoned in - dollars, Bitcoins, or jars of hamster poop. The same rules apply to all of them.
If you say so, I'll believe you, I admittedly don't know the rules for financial exchanges in foreign currency for the US in any detail. In Australia, only transactions in AU dollars are regulated by the government - most foreign exchange transactions are not regulated (the exception being the retail cash exchange outlets - so that travellers don't get ripped off).
But what you say doesn't change my position - that governments shouldn't be regulating transactions which don't involve their sovereign currency in any way. The fact that my views align with the laws of the country I currently am living in is just a happy coincidence.
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
It's pretty obvious they wanted to make it anonymous and it's a hard problem they didn't want to spent all their time on without solving all the other problems.
It's more like obfuscated at this point, it's like more like circumstantial evidence. Probably true, but can't be proven to be 100% correct.
New things are always on the horizon
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
This is retarded even by Slashdot standards. Using your logic, if I carried out a fraud in Europe in Euros, the EU is allowed to stop/punish it, but if I carried out a fraud in Europe in US dollars, they aren't.
Nope - in the part of my post that you didn't quote, I specifically said that crime would be the same if it was done in Bitcoins or marshmallows. That covers your example, and we don't need any new laws to deal with that situation.
What the conversation is about is whether a new regulatory framework needs to be set up to deal with Bitcoin. My belief is no, for the reasons I've already given.
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
Exactly which rules are you blather on about?
The ones that required billions of dollars in interest-free loans and caused thousands of people to lose their homes while the bankers involved kicked back counting their million dollar bonuses?
Bitcoin appears to be making it easier for electronic scams to work with little risk. I can't think of 'normal' currency system that does electronic transfers 'anonymously' without any controls for reversing transactions when fraud, scams etc. were discovered.
Change is certain; progress is not obligatory.
The Federal/State governments are what need regulating. Seems like the govt has become Skynet, an omnipotent self perpetuating force.
No, I wasn't one who bitched about Wall Street or the banks. Thanks for making an ass out of yourself by assuming, though!
Protip: Anyone using the term "Protip" is a cunt.
"Regulations would be welcome, but the problem we have is that the government has somehow chosen not to prosecute any bankers."
You are mistaken. There is no government separate from the banks. The banks are the government. They wrote the laws.
>In Australia, only transactions in AU dollars are regulated by the government
WRONG!
Barter is regulated (at least taxed, which, IMO, is a form of regulation) in Australia. While BitCoin is not exactly barter, barter itself is a non AU-Dollar transaction.
http://money.stackexchange.com/a/21449 find your country in this list.
>In Australia, only transactions in AU dollars are regulated by the government WRONG!
Barter is regulated (at least taxed, which, IMO, is a form of regulation) in Australia. While BitCoin is not exactly barter, barter itself is a non AU-Dollar transaction.
http://money.stackexchange.com/a/21449 find your country in this list.
I was referring to foreign currency transactions in that statement. Foreign currency transactions between banks and financial institutions etc., are not regulated in Australia with the exception that I previously posted.
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
It used to be unconstitutional for congress to restrict the purchase or sale of a product once you legally owned it.
It required a constitutional ammendment to prohibit the production, possession, and trade of Alcohol.
Fast forward decades later..... new precedent was set by the drug laws. These days; They can regulate the Euro or the trade of the Euro on US soil.;
And they can ban Bitcoin; probably without congress having to pass any law to do so --- since the laws are designed such that almost anything innovative will probably be at odds with the laws on the books somehow.
And what the article is about is applying existing regulatory frameworks to Bitcoin, since it looks like something they were meant to cover. So what's the problem?
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
I want to pay my taxes in jars of hamster poop now. Thank you!
You can get booze and hookers for bitcoin now?
Way to prove your point!
Protip: I'd mod you up, but that would be cuntish.
I doubt you finding hookers who take bitcoin.. they'll take dollars that you bought for bitcoin though.
which gets us to the point - despite it being against the rules you can sell, in practice, wow gold etc for dollars.. does that make them securities?
just about the the only difference is that blizzard can create wow gold from scratch if it wants to.
world was created 5 seconds before this post as it is.
These are interesting times, for sure. They claim this is just âoeso we can understand how Bitcoin works,â but I think the reality is that this is an intelligence gathering expedition to figure out how to enforce regulations through forcible means, such as taking over control of the Bitcoin network or enforcing licensing for miners.
I hope they realize that they can't simply "take control" of a decentralized, peer to peer network like Bitcoin, but I am sure they are going to learn as much as they can so they can try.
This does not bode well for Bitcoin or any other alternative currency.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues.
The government's powers to regulate currency and other financial instruments goes well beyond just the US dollar. This is WELL established in our laws. If it is a financial instrument used for interstate commerce (which bitcoin clearly is) within the US then the US government has the ability regulate it. Bitcoin is a currency and will be treated as such which means there are some rules to follow. Companies that want to build a business around bitcoin will find that there is a considerable amount of regulation surrounding currencies precisely because of all the previous attempts at corrupt behavior.
Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
You'll find that you are quite incorrect on that assertion. The US government has a well established right to regulate the use of any financial instrument used within its borders. The fact that it isn't the dollar is irrelevant. The government can regulate ANY currency or other financial instrument used within its borders.
Tell you what, why don't you open a foreign exchange business in an international airport - in the US side. How long do you think you could get away with running your business by dealing in every currency except the dollar? Take another example, would you expect to be able to conduct business and sidestep legal regulations by simply conducting your business in Euro's?
What about those countries that don't have their own currency and use the US dollar instead (there are about 20 of them as memory serves). Should these countries be able create regulations on their markets? The idea that you cannot regulate the use of a currency within your borders simply because you did not originate the currency has absolutely no precedent. For the meanwhile nations have been regulating trade conducted with foreign currencies for countless generations.
You just might have posted the least thought out comment I have ever seen on slashdot.
In Australia, only transactions in AU dollars are regulated by the government - most foreign exchange transactions are not regulated
I assure you that cannot possibly be true. If it were true then there would be HUGE incentives for everyone to deal in currencies other than AUD as they could escape all kinds of regulation.
The SEC exists to prevent corporations messing with their own share prices by cooking the books or insider trading.
The SECs mandate is quite a bit broader than that. It exists to enforce all securities laws and exchanges within the US. Insider trading and accounting are a piece of that but they do quite a bit more.
Obviously this doesn't apply to Bitcoin, since the intrinsic value of Bitcoins don't relate to the operation of an individual corporation.
There is no such thing as intrinsic value as it relates to currencies as they have no value independent of their market value. Furthermore the dollar doesn't relate to the operations of individual corporations either so I'm not really sure what your point is.
Additionally - Bitcoin is designed to be so independent that price fixing can't really occur - hence no need for the SEC.
If you really believe that then you and your money are likely to soon be parted. There are FAR more types of securities fraud that can occur than simple price fixing.
or the banks? Because you can't have it both ways: Either the government regulates money for various reasons (crime, abuse, economic stability) or it doesn't. You can't have a situation where the nifty "hacker" currency that you like is exempt for all regs and you can do what the fuck ever with it, but traditional monetary instruments are regulated to try and stop shit like what happened in 2008 (in no small part because of the repeal of many regulations).
Sure you can. A single Trojan or Durex condom costs like $1.20-$2.50 depending on if you get a bulk pack, 3-pack, or get one out of a bathroom at a night club. Same rubber. These are short-life minted coins that have a circulation life of 2-4 years, or until someone uses them. You can make money buying and selling condoms--if you work in a bathroom at a bar, handing out toilet paper for tips, selling individual cigarettes and condoms at 100% or better mark-up.
Bulk unload the condoms on pimps and whore houses where they'll go through plenty of them. Because of the bulk-unload needs, the drug trade will most likely stay near the lower end of dollars-per-condom: pimps can always get a pack of Durexes from Rite-Aid, so you have to out-price them.
Are we going to put money laundering controls on condoms next?
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Who stole what now? How did theft come into this?
Support my political activism on Patreon.
False equivalence. He'll accept the facts (i.e. that the government does regulate monetary transactions), but that doesn't change his position (i.e. that such regulation is inherently wrong and the government needs to stick it up its ass).
Support my political activism on Patreon.
This is so overly dramatic it's hilarious. Do you write for Colbert?
Bitcoin's intrinsic anonymity forces the buyer to do DUE DILIGENCE. If you cannot or do not perform this, you don't have to leg to stand on when you get ripped off.
Trackball users will be first against the wall.
It was Goldman Sachs, and they've gotten the conservatives and the liberals both to believe it was Freddie Mae and Fanny Mac. Sachs invented the Consolidated Debt Object, a way to sell off a package of toxic loans to other banks and convince them it's good for them. The explanation was that you get 10,000 loans and some subset are terrible, risky, and going to default and cost you money; but because the others are together lucrative, the overall is a net-gain. Thus Sachs invented a scheme to give consumers loans they can't handle, take all their money, then dump the impending doom and financial costs onto another bank (said bank pays off the debt, becomes the new creditor and tries to get that money plus interest back from the debtor).
The best part? Goldman Sachs had this pitch, their front-man is going to Fanny and Freddie and Bank of America like, "Well these are actually high-value packages with a few bad loans, but mostly high-value debt to deliver an overall high profit margin." Then, he goes back into the board room like, "Oh, yeah. These are steaming sacks of dog shit, but they bought it!" Steaming sack of dog shit. Really. High-value.
Support my political activism on Patreon.
Sorry, you're wrong. it doesn't force the buyer to do due diligence. This is not like Paypal where you are required to submit certain types of information to use the payment system, which forces a certain amount of due diligence to be performed.
And yet there are some protections in most systems against this sort of thing. Face the facts, Bitcoin does not offer this security and it doesn't enforce any sort of due diligence in it's system.
I again reiterate that I can't think of any other 'normal' currency system that does electronic transfers 'anonymously' without any controls for reversing transactions when fraud, scams etc. were discovered. I will also add now to the point that there is no due diligence enforced like on other electronic transfer systems for currency.
Change is certain; progress is not obligatory.
This is completely untrue. Foreign currency exchanges are regulated by the Banking act of 1959 and all its various updates since.
In fact we're probably more heavily regulated than most countries in the world, which is part of why our banks didnt shit themselves and die in the GFC.
Excuse the Unicode crap in my posts. That's an apostrophe, and slashdot is busted.
There's gotta be some country where voluntary transactions between consenting adults are legal? No?
The bitcoin market is incredibly malleable and fixable. If the major exchanges all decided the rate is going to be glued at $15 a bitcoin, it will fix at that point because buyers wount buy more expensive and sellers wont sell more cheaply.
But more to the point the fact that the guys on Something awful managed to accidently crash the market by running around shouting "SELL SELL SELL THE MARKET IS CRASHING" for a prank indicates that its a *very very* unstable and manipulatable market anyway.
Excuse the Unicode crap in my posts. That's an apostrophe, and slashdot is busted.
a subpoena doesn't mean criminal activity has taken place...
That's right. It is frequently used to target people for the purpose of harassment. Kind of like 'discovery'. We're not supposed to tolerate this.
“He’s not deformed, he’s just drunk!”
Due diligence would mean vetting the seller you intend to transmit money to.
There isn't any reversal for a moneygram or western union to a John Doe either.
Why don't you go code a bitcoin knockoff (feathercoin and litecoin come to mind) that embodies what you feel is important? Otherwise all you do is harm bitcoin with this type of sentiment.
Trackball users will be first against the wall.
IF someone sells one stock to buy another, there's no change in the available capital - it just moves from one person to another.
..
However, if someone puts 12% of their paycheck into the capital market as opposed to spending it, that's money being newly added to the capital pool.
Capital is money available for building stores, semiconductor fabs, ships, etc. That's why it's called capitalism - the capital is being put to work.
So when money is added to the capital market, that's more money for building stuff. It really doesn't matter whether the new money passes through a
broker, a mutual fund, or a pigs rear end - taking money form the consumption stream (paychecks) and adding it the capital market does just that -
ADDS to the capital market. In the end, it doesn't matter if it's an IPO or a bond - more investment of capital funds ($) means more investment in capital assets (ships, stores, etc.)
Despite what's being told to pawns who don't know about financial markets, most of the money in the market is that 12% that ordinary people save, mostly
buy and hold which means their buys are adding to the capital market, not moving it around. Sure, there are a few hundred mega-wealthy people moving their
money around, but their are a few MILLION buy and hold savers. So mostly, it's new investment, not day trading.
> The funds manager skims 1% regardless, so doesn't care much about you.
> $250 of his dollars go into my pocket, and I give him $50 worth of stock.
Not too good at percentages for someone who thinks he knows investing, are you? The management company gets 1% you said,
(0.030% for some index funds), and that 1% is most of it. Have you noticed that if the management costs are 1%, that means 99% is
invested is capital assets, in producing stuff? You seem awfully focused on the 1% and you're totally ignoring the 99%. That's
understandable if the 1% was going in your pocket. I too am much more interested in money that's headed or my pocket than money
that's not. It seems to have distorted your point of view, though.
> It's like poker: a game of luck and chance, to anyone who's looked at the odds.
To anyone who has focused on short term, day trading style odds. For most of us, we know that only ONCE has the broad market failed to
provide a good return over any ten year period. There's no poker here for most Americans, we know if you invest, ten years later when you want to
retire or send your kid to school, the money will have grown considerably (more than doubled, typically). Obviously the 2008-2009 crash was
a big exception. Still, if you've invested since Oct 10 2008 you've made money. (invested, as in index, not gambled).
It's not regulating bitcoin. It's impossible to. But they can regulate us domiciled companies doing business in the state of New York with customers based in New York and other states that New York has reciprocating agreements with (which is probably all. Maybe not Wyoming, but probably them too)
This is utter nonsense - the US government is allowed to regulate anyone conducting financial transactions within the US.
You mean interstate financial transactions, of course.
However, this article isn't about the US government, it's about New York state, which really does have legal authority to regulate any financial transactions in New York.
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the real question is: is the Secret Club controlling it and/or getting their cut of the profits?
what a travesty. what a sad sick little show.
I know what it means, we were discussing it being 'enforced', it's not.
There is if you use the credit/debit card transfer instead of cash (as seen on http://www.westernunion.co.uk/sites/gb/send-money/send-money.page - also, wow, no HTTPS!).
We were talking about electronic transfers, not physical cash - I even clarified this multiple times with my use of "electronic transfers"
I am currently much more interested in contributing my free time to other things. I am not really that motivated by Bitcoin or it's alternatives for a variety of reasons.
I think it's a valid criticism that needs to be raised. After all, people would get burned if they aren't aware of this. If Bitcoin gets burned by this, then maybe someone will fork the project and improve upon it based on what was learned.
Change is certain; progress is not obligatory.
And one of those two will also provide roads, firefighters, a national army to prevent foreign invasions, a space exploration program, regulation of food so we don't return to the level of 'quality' described in Upton Sinclair's "The Jungle" and a few thousand other benefits in return for the money they 'stole' from you.
Either the government regulates money for various reasons (crime, abuse, economic stability) or it doesn't.
I don't know anything about the economy or bitcoins, but I do know that nothing is as black and white as you're painting it. There's plenty of room between "your papers, comrade" and the current "We can't possibly tell big banks what to do! Lets just pray they don't intentionally break the economy again!"
Writing the computer code is relatively simple. The hard part is getting a;; the graft and kickbakcs sorted out. Getting all those back room negotiations sorted out takes time. When all that is done, the public will be screwed properly.
Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
Try carrying a duffel bag with a few hundred thousand Euros through customs and tell the agent that they can't do anything about it because the US government doesn't have the right to regulate Euros. Please have someone record it, too, because the results will be the funniest thing I'll see all day.
The US government is empowered to regulate commerce within its borders. It doesn't matter what currency you're using.
The problem is that the jars of hamster poop have an inverse exchange rate with dollars.
The government is going to have to give you approximately four container ships' worth of hamster poop to cover your tax burden.
Sorry for confusing you! This comment was meant for a different story. I posted it here by mistake.
> Because you can't have it both ways: Either the government regulates money for various reasons
>(crime, abuse, economic stability) or it doesn't.
This is a false dichotomy.
There are things than can be regulated (Fraud, crime, abusive behavior)
There are also things that can go unregulated (creation of money, spending and receiving of money) In a crypto currenct, these things are impossible to regulate save by global consensus.
The abuses that occurred during the 2008-9 crisis went largely un-punished even despite a clear cause for fraud. The bail-out amount to a huge inflationary minting of dollars, effectively governmental redistribution of wealth. Both of these things can be complained about and both are bad.
I was struck the other day with the similarities between bitcoin and a savings account: Both are digital representations of a logical construct.
The most basic logical construct of the financial world is currency. Slips of paper to which people ascribe value. When stored in a savings account, they become digital representations of the currency logical construct.
Tractors in Farmville are digital representations of a logical construct.
Stocks (shares of ownership), bonds (promises to pay), synthetic CDO's (a bet which a US district court judge called "gibberish") are other logical constructs. These are typically represented digitally as well. But, at some point, these constructs can (hopefully) be converted into currency and exchanged for goods, services and financial products.
Gold, beanie babies, art are stores of value. Any store of value, even though it might have a physical representation, is a logical construct. The value is the logical construct. Typically, the value is measured by the amount of currency for which it can be exchanged. There can be other measures too, but currency is a common unit.
Whether people accept this logical construct (bitcoin) remains to be seen. If people directly accept it as currency - meaning they will accept it as payment - or value it for its convertibility into currency remains to be seen. If it's the former, it could become valuable. If it's the latter, it's going to have a lot of competition from other logical constructs to which people ascribe value.
Ultimately, a "thing" - physical or virtual - is valuable in that it helps people get what they want, whatever that want may be.
I think it's a valid criticism that needs to be raised. After all, people would get burned if they aren't aware of this. If Bitcoin gets burned by this, then maybe someone will fork the project and improve upon it based on what was learned.
Or, more importantly, the first time some 90-year-old grandma gets flim-flammed by some Bitcoin criminal, the general public will demand (and politicians will be happy to comply) that Something Be Done About It. If history is our guide, that "something" will be to make Bitcoin illegal.
That's one of the flaws (no, that isn't a "feature") of the system. By making the system inherently 'unreversable', they have sown the seeds of their own destruction.
Wickard v. Filburn is still a prevailing judicial ruling, just about any economic activity in the US is "interstate." The Feds would probably claim that, for example, an intrastate party-to-party BTC/Dollar trade was still their jurisdiction, because such transactions can still affect the global BTC price, and they'd have a good point.
The Feds respect state borders only insofar as commerce does, and commerce doesn't at all.
Don't blame me, I voted for Baltar.
The Bitcoin protocol allows irrevocable one-way transfers between anonymous parties. This is the scammer's dream. Now you can scam people for big bucks remotely, without worrying that they'll come after you with cops or a baseball bat.
Bitcoin was supposed to be a petty-cash system for small online payments. It's turned into a speculative commodity. This hasn't gone well. Several "online wallet" companies turned out to be "take the money and run" operations. Most of the exchanges are flaky. Right now, Mt. Gox, which used to be the biggest exchange, is two months behind on paying out US dollar balances owed to their customers. (It's not yet clear whether they're broke or merely incompetent.)
The Bitcoin world has, in its short life, seen almost every known financial scam. Bucket shops, blind pools, front running, broker embezzlement, Ponzi schemes - it's all there in the tiny Bitcoin world.
Yes, I understand that's the position the courts have taken. The result is to destroy the notion that the constitution limits the scope of the federal government in any way, since absolutely anything can potentially affect commerce.
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Oh, it's also worth pointing out that Wickard v. Fillburn was a direct result of FDR's court packing proposal. Like most of the related rulings of the time, it's bad law. Not that I see any realistic chance of reversing it any time soon.
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Yes it is. mr X does exchange and reveals his wallet address. Therefore you can track said wallets balance and transactions. However said person X or maybe in fact any number of persons could easily obfuscate everything by creating 10K addresses and randomly moving the money around between them. If they collect on 100 addresses and use 10K to obfuscate it's about as close to anonymous you can get.
Cash is not an electronic transfer.
Change is certain; progress is not obligatory.
It is pretty obviously not anonymous, and actually nearly the exact opposite. It has a built-in method of tracking all the historical transactions. This presumably assists in not being reliant on Government in order to prevent fraud. But claiming it tried to be anonymous and failed, wow, the creator would have to be a real idiot in your eyes.
Much more likely, you were excessively credulous while listening to a low quality pundit who made absurd claims about bitcoin.
There is no evil hoard of bankers sitting atop a mountain of cash
To put it succinctly, bull shit.
I don't know about you but half a BILLION dollars is a hoard of cash to me. And that's just one of the guys that made all that money disappear. Sure they made our money disappear for the most part but in doing so they made sure they they walked away with huge hoards of cash.
It's kinda funny. The Reagan administration prosecuted some 1100 bank officials in the Savings and loan meltdown. The Obama administration has prosecuted 0 in significantly worse crisis.
Who is John Galt?
It sounds like we're making progress.
I don't dispute that some traders make a lot of money, BTW. That's clear. (Though it seems damn few are that successful for more than a few years.)
We agree that putting money into the market - well, puts money into the market. Maybe the person selling you the stock uses that money to buy bonds, handing capital directly to the company or whatever.
It is your assertion, though, that brokers and traders take home not 0.030 - 1% as shown in the filings, but approximately 100%. Therefore all the money put in is taken right back out, correct?
If so, I have three questions:
why is the asset value of the DJIA 15 times higher today than in 1980? Where did those trillions of dollars come from, if not from investment?
How did my mom invest about $100k, then twenty years later sell most of it for $1 million, if the traders took all the money? It's sitting in her bank account now.
Perhaps most importantly, how do YOU think ships get built? There are trillions of dollars of capital assets like ships, stores, factories, machines, planes, warehouses, etc. owned by stockholders. Where do you think the $100,000,000 to build a large ship/office complex / fiber network comes from? The traders walked away with the cash, then the fiber backbones magically appeared from nowhere?
What the fuck is wrong with "if you like Wild West and understand what that means, use our Bitcoin system. If you want nice and regulated, use standard currency"? In other words, why this one-size-must-fit-all mentality? Someone using a currency created for the very purpose of such anonymous transactions either understands what this means, or learns a valuable lesson about not diving into something before understanding it. Or decides that the learning and potential risk involved is not worthwhile and uses US dollars, Euros, or whatever else.
There is nothing wrong with that! This means a new option is available that wasn't there before. If you don't like the option, don't go out of your way to use it. No one is going to force you to use Bitcoin if you don't like (or understand) the terms under which it operates. This isn't broken. The effort to fix it will therefore fail and is likely to create additional problems.
It's subtle and there is a long sequence of events separating cause from effect, but this psychotic unwillingness to treat adult people like adults is the primary enabler for the US government's perpetual expansion of power and scope. That stupid, lazy, impetuous people who make bad decisions might hurt themselves is not a bug, it's a feature. It's the only thing preventing the takeover of widespread, institutionalized stupidity. It is not an injustice when adults who make poor decisions suffer the consequences. No one was coerced and there is no victim in that picture. The effort to prevent this is well-intentioned and tragically misguided, but happily and diabolically exploited by politicians in the business of protecting you from yourself because to them it means opportunity to grab power that will never be given back.
It is a miracle that curiosity survives formal education. - Einstein
I'll add that the other powerful force destroying Western civilization (the US is merely the leading edge of this wave) is "how can I tell my neighbor how he should live, and back it with the police power of government while claiming that it's for safety or some other thinly veiled excuse?" It's just that this one has been around a long time. The idea that adult people must be protected from themselves is newer by comparison. Both ideologies require a powerful government with its fingers in everything, so the politicians are happy to endorse either.
It is a miracle that curiosity survives formal education. - Einstein
I'm not questioning whether or not you can conduct trade in other currencies - you can. The point of the matter is whether or not you can evade regulatory and compliance requirements by using a currency that isn't the dollar - you can't.
Having said what I did above, I should acknowledge you certainly have a point for people who pay high fees during times if low returns, like the last five years. A 1% fee and 2% gross growth means the broker gets half of the INCREASE just on that fee.
I'm thinking more in terms of an index fund with 0.03% expenses and over the long term, which averages 7%-9% returns.
Whatever happens to the return, or increase, ships, factories, and fiber networks don't build themselves. They are built with investor capital - retirement money.
It's not a good explanation.
Every other electronic payment system offers certain protections, guarantees, protects against laundering, fraud etc. People are likely to assume they get that on Bitcoin without realizing they don't. Believe it or not, a lot of people don't read terms of service when they sign up on a site, so it wouldn't be surprising if there are people using Bitcoin that don't understand it because they don't read the large jibberjabber on it.
If a vendor only accepts one payment method such as Bitcoin, this can be seen as being 'forced' to use Bitcoin. So, what you're telling me is that there are zero vendors that don't accept other methods of payment too - I am sceptical.
I am not one of these people, I am not going to make a bad decision on relying on a system that thus far has had a very poor track record with it's currency exchange systems and avoid the stigma of funding druggies as well as using a system that offers no enforced due diligence, nor protections.
Well executed fraud and scams is indistinguishable from making a good decision.
Taking note of your point of view: Many Bitcoin users wanted to see this accepted as a currency and treated as such, now they got their wish. There is no victim in this picture, since it involved adults who make poor decisions, they got what they asked for.
Change is certain; progress is not obligatory.
> If you buy a share of ship making company X from me at an exchange, how do you think that money benefits company X?
You ignored the question - all three actually. How do you think that ship is paid for? Hint - the money comes from investors.
Another hint - the shipped is owned by the group stockholders known Ship Buyer Inc.
> Even your bond idea was wrong - you can trade bonds with third parties too.
Too, as in first an investor must buy them from the company, directly handling cash to the company?
The fact that you can sell a bond to a third party is a primary reason people buy bonds from the company in the first place.
If you couldn't sell them, people wouldn't nearly as many. So when you buy from a third party, you are motivating that
third party to use your cash to go buy more bonds directly from companies, in order to later sell them and repeat the process.
> Are you trying to suggest that every ships parts were purchased with investor money?
Ship's parts? Are you playing dumb, or are you not playing? I'm suggesting that most ships are purchased with investor money.
If a company isn't one of the ~ 10 largest in the world, they don't buy a $700 million ship, factory, or national fiber network from revenue.
They get investors to invest money which is used for capital purchases. Sometimes they sell bonds, such as you see used daily
for toll road construction, sometimes it's an IPO, and sometimes they use an intermediary bank to borrow investor money.
In all of those cases, they are using investor money to buy that $700 million ship.
> Didn't I say "The ship making company is able to make more ships buy selling them for a profit."?
Only if someone(s) has $700 million they aren't using at the moment. Now who has $700 million that they won't need for 20-50 years?
Hint - the initials are TRS.
It seems you missed the memo, but "The Jungle" was an out-on-out, pants-on-fire lie. The courts never found any evidence of that kind of conduct. Roosevelt decided not to release the actual government investigation, which couldn't corroborate Sinclair's account - it would have hurt his Pure Food and Drug Act legislation, and he had to maintain the image that he was doing something. The government also brought suits against Ketchup producers and Coca-Cola for being "adulterated" products (That's right, they said tomatoes were poisonous, people just couldn't make informed decisions, etc).
And in any case, such a situation would be fraud, which can be settled without a military spread out across hundreds of countries.
Roads have historically been provided by private individuals. The government didn't invent roads, you know (they did invent canals, how's that working out as a form of transportation?). They didn't invent firefighting services either. Just because you've lived your entire life with the government spoon-feeding you these services, you can't imagine a world any other way.
But for the sake of argument, lets say we need to socialize roads, firefighting, police, military, quality control, and I'll even give you space exploration. Well great, that's about 30% of my Federal through local spending per capita (and half of THAT is only because I'm giving you every last deployed troop by the US, even to Germany), what of the other 70% that's actually being critiqued here? Nice straw man though.
Wonder what the public key field is for?
You *DID* say to *build* a ship...
And ya, lots of companies and governments have that much cash on hand. No one is going to issue shares just to build a new office complex. Who would invest in that strategy?
I can see the prospectus for the reissue:
Hey investors! We want a shiny new HQ, and YOU can help us get it!
No, it won't make us more profit.
No, it doesn't help our stock price (issuing shares dilutes the current shares - so it actually hurts existing investors)
It won't help us grow the business or increase market cap.
But hey, it's shiny!
Invest in us - we don't know how to handle money!
This is all besides the point anyway.
The overarching point was that over 99% of trading is between third parties and therefore the money doesn't go to the issuing company... although it does affect the share price.
The CDO is a Collateralized Debt Obligation, not a Consolidated Debt Object. If you got this most basic fact wrong, lord knows about the rest of your post.
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
peer to peer, or is it peerISP-CIA-ISPpeer
Encryption? like HTTPS? that was just said to be insecure?
Yes I know, it's either "Goldman" or "Those Motherfuckers".
I didn't say Goldman Sachs issues mortgages, although during this time they did buy up a mortgage company and had it issuing mortgages to anyone that walked through the door. I forget which. It's one of those niggling details you read, form an opinion about, and then forget about because you don't care for trivia.
They do, however, buy up debt. They buy and sell and short loans. They even insure those loans, then sell them to someone else--thus if the loan defaults, someone else takes the hit *and* they get an insurance pay-out. Buying up a bunch of mortgages, packaging them together, and selling them off is a viable business strategy--it's one Goldman Sachs has used, in fact, during the turn of the century.
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That's called "trivia", not "most basic fact." Your grievance is like saying, "Chevy built the Chevy Virgil back in 1970, and it broke in half on the test course! It also liked to backfire because of a loose bolt on the carburator plate, but instead of fixing it with a locknut they recalled it and fixed the exhaust so it'd backfire away from the fuel tank instead of towards it!" and you're like, "It was the Chevy VEGA! Obviously none of your shit is accurate!" Trivia.
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The obfuscation you've described is about as effective as a simple letter substitution cipher, given the fact that mapping relationships between entities and aggregating transaction data to discern correlated value flows between any number of points over time is far from an insurmountable task for anyone with adequate interest, programming skills, and access to a couple dozen dedicated CPU cores. I know this because it's something I'm working on now. Tumblers don't do what people think they do, at least not without actors performing the equivalent of a "buried treasure" routine wherein they abstain from ongoing transactions for several years. There's a ridiculous amount of signal in the noise.
Write failed: Broken pipe