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We Will Regulate Bitcoin if Risks Are Not Tackled, EU Finance Head Says (theguardian.com)
The European Union has warned that it will regulate cryptocurrencies if the risks exposed by the meteoric rise of bitcoin and its ilk are not addressed. The Guardian: The boom and bust of cryptocurrencies has seen some investors make millions where others have suffered heavy losses. Bitcoin, which now trades around $9,000 a token but recently dropped to less than $6,000, leads the pack rising nearly 2,000% to just under $20,000 in 2017, fuelling a global investment craze. "This is a global phenomenon and it's important there is an international follow-up at the global level," Valdis Dombrovskis, the EU's financial chief, said on Monday. "We do not exclude the possibility to move ahead (by regulating cryptocurrencies) at the EU level if we see, for example, risks emerging but no clear international response emerging."
Cryptocurrencies are fundamentally different from other investments, in that they are the only kind where unexpected market twists and turns lead to winners and losers.
It was a joke! When you give me that look it was a joke.
Look if frequent thefts of uninsured capital occur in a market, the attractiveness of that market is going to diminish.
The downfall of BTC is going to be that many people aren't sure if they can trust their wallets or the exchanges. These problems have little to do with the technology and trumps any advantages that cryptocurrency might offer an investor or consumer.
“Common sense is not so common.” — Voltaire
Why? If they don't, the whole regulation is about as efficient as the rest of the EU and business can continue as usual.
The very LAST thing anyone not interested in actually regulating Cryptocurrency could want is them having a clue about it.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
also high fees and long transaction times
And yet the old ignorant dinosaurs of government can still throw your young pimply ass in jail for refusing to pay your taxes which you owe on cryptocurrency gains.
Grow up, kid.
There are many kinds of regulation. It could be as simple as forcing sellers to educate buyers on the risks associated with Bitcoin; controls on advertising; placing limits on "transaction fees", etc. None of that has anything to do with how cryptocurrency works, just how it's sold.
Support Right To Repair Legislation.
They're trying to get as much regulating in as possible before their evil organization unravels.
Three cheers for Brexit!
They can quite easily regulate businesses that wish to trade in bitcoin, including setting rules for what does (or does not) constitute legal trade using bitcoin. Since the blockchain is a public record, it would be hard for legitimate businesses to avoid government scrutiny.
You're right that it can't but what they can do is ban all EU banks, credit card companies and financial institutions from processing payments for cryptocurrency purchasing. There are already banks in the UK that won't allow you to use their credit and debit cards to purchase anything from crypto currency exchanges such as Coinbase.
I only please one person per day. Today is not your day. Tomorrow isn't looking good either. - Scott Adams
will condescend to keeping their subjects from injuring themselves.
Actually yes you can turn off the sarcasm machine. We DO need regulation surrounding cryptocurrencies to protect people. We do have laws and police and regulations for very good reasons. Many of those reasons are to protect those who aren't able to protect themselves both from financial predators and sometimes from themselves. Why? Because A) it's the right thing to do morally and B) nobody exists in a financial vacuum so one person's bad decisions tends to affect others. Are you seriously arguing that we should have no regulations of financial systems? Or are you one of the more foolish varieties of libertarian who suffers from the delusion that unfettered capitalism with no rules is somehow a good thing?
And I don't think people who say stupid things like "yarg, teh cryptocurrencies are beyond teh regulations" understand that governments don't give a fuck, have laws in places for financial systems, and if it is a financial system which refuses to be regulated, then it will be deemed illegal.
Many of us have been rolling our eyes for years now at claims it is free of government regulation. You can make such bullshit claims all you want, but reality is a bitch.
You don't get to decree yourself outside of the authority of a government, it simply doesn't work that way. And right now, it's a market fraught with scams, outright theft, and other things nobody is going to allow to exist.
Cryptocurrencies have now matured enough to start learning there is nothing magical about your system in terms of regulatory reach. Right now, it's a completely insane market rife with scams, thievery, and incompetent fools.
Think you can keep claiming to be beyond the power or anybody to regulate? Wait and see what happens. It won't be your version of things.
Serious question; how do they plan on regulating it?
Mod me down with all of your hatred and your journey towards the dark side will be complete!
Look if frequent thefts of uninsured capital occur in a market, the attractiveness of that market is going to diminish.
Not until a lot of people endure a lot of unnecessary losses. Markets don't solve every problem and they especially don't solve unchecked greed. We have financial regulations for good reasons. Many of those reasons are to prevent people from being defrauded. It's cheaper to society to prevent a crime than to wait for a market to adapt which might take years if it happens at all.
The downfall of BTC is going to be that many people aren't sure if they can trust their wallets or the exchanges.
That's not the only problem with it though it is a big one. What's really going to kill it however is the high risk adjusted transaction costs. If bitcoin were actually cheaper than say the dollar on a risk adjusted basis, that fact alone would make it hard to stop. But in reality bitcoin is rather expensive and relatively complicated to use. (good luck explaining a bitcoin wallet to your grandmother) The biggest problem bitcoin has is that it is expensive compared to competing currencies for transactions.
That is happening in the US. I know of at least one bank who was mentioned on Reddit for kicking people out if they are doing any buying/selling to cryptocurrency exchanges, where someone who did a transaction with Coinbase was told to go elsewhere and that all their accounts would be closed due to that.
If you block the endpoints, where cryptocurrency can't be cashed in and used for buying stuff, then there are no real reasons for people to invest in it.
They aren't in a position to address the risks either. They just think they are.
Actually they are very much in a position to address a great number of the risks. Among the options they have is to make dealing in cryptocurrencies illegal. While criminals will still be criminals, governments and law enforcement agencies are in a strong position to mitigate a lot of the damage that could be done just like they do for other types of financial crime and misbehavior.
So is Medicare/Medicaid. Government fosters that cesspit.
That "cesspit" as you call it is the only way our senior citizens would be able to get health care and insurance. No private insurance company could possibly provide insurance to the elderly and make a profit or even break even. Are you seriously arguing that the elderly should not have health care?
If you want to go to single payer like every other civilized country I'm all for it.
we, as modern societies, have agreed on.
Speak for yourself, schmuck.
It really doesn't matter what those governments do because criminals will merely find another get rich quick scheme to use in order to separate fools from their money. Defenses from the government only come after the thieves are out of the barn. That we see crytpocurrencies being used as such a vehicle is a matter of coincidence and not such much as something inherent to them. They are only useful in scams because they have shown extraordinary growth that gets everyone salivating at the thought of how much money they could make and also happen to be terribly misunderstood (if understood at all) by a majority of people.
I'm not even sure how a government could go about regulating a cryptocurrency like bitcoin outside of controlling a majority of the network. Otherwise there's little they can do outside of just banning it outright, but as we've seen with drugs that's not really going to deter anyone. I suspect that they could regulate ICOs which is where most of the scams seem to operate, but that's entirely different from regulating a cryptocurrency itself which can exist outside of an ICO.
I think that most of this is pointless saber rattling as no one in government has any better understanding of cryptocurrency than your average person on the street, but I expect we'll see plenty of comments from representatives with a "series of tubes" level of understanding.
We coincidentally happen to agree to the use of legal tender for purposes of exchange because we generally agree its value to ourselves. How can you regulate other mechanisms that have any perceived value without also trying to regulate something as basic as haggling or barter, however? For any private transaction, two parties can agree to whatever exchange is amenable to both of them.
How the fucking hell do they expect to regulate bitcoin if they can't also simultaneously regulate what people are and are not allowed to accept in exchange for goods or services? Would Frank be legally prohibited from mowing Joe's lawn in exchange for letting Frank use Joe's washing machine once per week, for instance?
File under 'M' for 'Manic ranting'
Yes, we shouldn't let people have any freedom of any sort, as they might make the wrong decision.
I for one embrace our benevolent dictators, as they have only my best interests at heart.
To quote CS Lewis
"Of all tyrannies, a tyranny sincerely exercised for the good
of its victim may be the most oppressive. It may be better to live
under robber barons than under omnipotent moral busybodies.
The robber baron’s cruelty may sometimes sleep, his cupidity may
at some point be satiated, but those who torment us for our own good
will torment us without end for they do so with the approval
of their own conscience."
Or phrased a bit more clearly
"The road to hell is paved with good intentions"
Oppressive rulers are a problem, unfortunately it seems people don't why freedom is important.
I don't need to speak for myself. I'm speaking for the modern society that I'm a part of. If you don't like it, you should move to a different society. There are all sorts on the planet. You could even live in the middle of the ocean, where there's no government and no society. Out there you do all sorts of stupid shit with your money with nobody telling you that it's a bad idea.
I don't respond to AC's.
Sounds like a plan!
-- Tigger warning: This post may contain tiggers! --
I think you are now in the running for the award for most erudite comment by an Anonymous Coward in Slashdot history.
Okay, I'll bite, how do you get a cryptocurrency without an ICO? How are ICO's different from issuing private banknotes and why should they not be regulated similarly to prevent fraud and malfeasance? Cryptocurrency hacks seem to think they invented something totally new, but from a monetary point of view it's mostly just a digital version of a promissory note, which for general exchange purposes was abandoned long ago in favor of fiat currencies for good reasons.
Most crypto currencies are developed by anonymous volunteers. They aren't going to fill out any regulatory paper work. If Monero doesn't bother obeying a regulation what are the regulators going to do?
Oh, you don't mean the currencies, you mean the exchanges. Well many currencies now allow swaps between currencies, so exchanges aren't always needed.
Oh, but we will regulate when the money moves between fiat and crypto. Yeah, because the regulators have had so much success regulation money going to off shore tax havens and numbered anonymous companies. Also in the future I might buy a portion of my yearly spending in crypto currencies and not even need fiat currency.
In order to make sure that retail investors do not fall prey to market manipulation and fraud
Between the manipulation, fraud and the government's incessant need to continually probe my financial orifices, I'll take the fraud. Thanks anyway.
Why not just let the market decide? Yeah, Bitcoin is risky. But you bastards are snoopy.
Have gnu, will travel.
we, as modern societies, have agreed on.
Speak for yourself, schmuck.
If you don't like it, move somewhere else. That's the correct free-market capitalist response, right?
The same body that sees the problem with 500-Euro notes doesn't see any other problem with cryptocurrencies?
"When information is power, privacy is freedom" - Jah-Wren Ryel
It really doesn't matter what those governments do because criminals will merely find another get rich quick scheme to use in order to separate fools from their money.
It very much does matter what governments do. The fact that dealing with criminals is an eternal game of whack-a-mole is irrelevant. Yes they will try something else but that does not excuse doing nothing about their scams when we know about them. Should we allow check kiting or pyramid schemes just because "criminals will merely find another get rich quick scheme"? Spare me.
I think that most of this is pointless saber rattling as no one in government has any better understanding of cryptocurrency than your average person on the street, but I expect we'll see plenty of comments from representatives with a "series of tubes" level of understanding.
They don't have to understand them better though. They just have to understand how they are used to defraud people and take actions against that. No different than for fiat currency. And frankly your notion that "nobody" in government has more of a clue about money than the "average" person is demonstrably untrue. There are some very talented people in government who understand how money works about as well as anyone out there. You are seeking confirmation of your biases.
Maybe it can't be managed, but it sure can be regulated, such as taxed.
It might be hard to catch those who profit from bitcoin but do not report their gain, but it doesn't mean regulating it won't have any effect.
Bitcoin has the Bitcoin Network behind it. Without it, "one bitcoin" is just an entry in a database. With it, you can transfer value around the world at relatively low cost and relatively high speed. This is a useful service, and it is backed by real hardware and software. The same logic applies to other cryptocurrencies. To the extent they are *useful* they have value, just like FedEx and electric utilities are useful services.
If you don't like it, move somewhere else. That's the correct free-market capitalist response, right?
That depends entirely on who the aggressor is. A reply of "if you don't like it, leave" when one objects to others violating one's property rights has nothing to do with the free market; that would be the authoritarian/socialist response. In a free market one has no obligation to walk away and permit others to violate one's property rights. It is the correct free-market response when you are offended by others doing something with their own property, without violating your rights. The principle is simple: You decide how your property is used, while others decide how their property is used. That's what it means for it to be "your property" or "their property". Any action requires the unanimous consent of everyone with property rights at stake, and no one else has any right to interfere.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
If the price were stable and flat for long periods of time then they would only buy it if it paid back dividends. But cryptocurrencies are not stocks, and they don't "make" money like a company does, so they can not pay any dividends. Consequently all the investors holding it want it to go up and those that are not holding it want it to go down. No "investor" wants the price to simply stand still. So, by opening it up to speculation the market is doing exactly what the "Financial market" system wants it to do.
Its just that what it is doing is not necessarily what most people want it to do, like be used for buying and selling tangible real world things, where the price does not change while you are in the process of purchasing something with it.
"You don't get to decree yourself outside of the authority of a government, it simply doesn't work that way."
I was just stating a fact. Feel free to enlighten us on how anonymous transactions across secured p2p links can be traced by a government tax office - remember, this isn't GCHQ or the CIA we're talking about here who might be able to do that, but Joe Smith working in a local tax office.
Now, I can't say I'm an expert in European affairs. I'm not even an expert in finance. However, if people actually expect zero risk investments, I suspect that they will be disappointed. Of course, precious metals might be a good investment choice. But I imagine that those are already overly regulated too. What a world!
You are assuming that regulation violates your property rights. In fact, you can't use your properly freely, since you're not allowed to kill someone with it directly. At that point, it's a question of how much regulation. Property rights mean that stuff can't be taken away from you without consent or due process, not that you have the right to do everything.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Tracing has been done, but, really, the authorities aren't really interested in the movement of Bitcoin. They're interested in the value when you buy something with it or cash it in.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes