Politicians forking the block chain | Bitcointalksearch.org

doobadoo

sr. member

Activity: 364

Merit: 250

Quote from: bitplane on June 23, 2012, 10:24:54 AM

Let's assume that Bitcoin catches on in the future and is used for all kinds of online payments by a huge number of legitimate businesses. What happens when a large political power, like the USA or EU, decides to regulate Bitcoin within their borders by regulating the rules used by clients?

Merchants and traders would have to adhere to the new rules, which I'm guessing would make Bitcoin fall out of favour or fork the block chain dividing the currency into regional networks. At this point we'd have lots of local currencies depending on regulations enforced by local government.

Anyone care to speculate on what would happen in this case, or why it won't/can't happen?

In the world you are talking about capital controls become almost impossible without draconian control of the internet itself. Any 'island' that forks the chain and imposes unfavorable rules would see capital flee the chain and toward the more desirable chain. See the Alt. Chains. We have them already but there is de-minimus actual commerce going on i the alt chain world. At least BTC has alpaca socks and drugs of all kinds being traded in BTC. Not super compared to the 50 Trillion global GDP, but you gotta start somewehre.

Spekulatius

legendary

Activity: 1022

Merit: 1000

Quote from: dancupid on June 24, 2012, 12:18:31 PM

Quote from: Spekulatius on June 24, 2012, 12:00:19 PM

Quote from: dancupid on June 24, 2012, 11:19:27 AM

All a fork would do is create a less attractive version of Bitcoin. And once the fork happens how do they control it? How do they enforce it? And which government?
If every government created their own fork with their own rules then inevitably market forces would kick in and the best fork would win - and the best fork would be the one that was most independent of government control and we already have that.

The best fork would be the one with coins being accepted at most places for goods being bought most frequently by its users.

It would be the best fork for transactions, but it wouldn't necessarily be the best place to store your wealth. Gold has proven itself to be a better investment than dollars, but no one accepts gold for payment over the counter. Bitcoin has also proven itself to be a better investment than usd - but few places accept bitcoin.
Digital currencies are potentially interchangeable & transferable immediately.
It wouldn't matter which coin was accepted at the POS if you could exchange them in real time, which is easy with bitcoin like currencies - not so easy with fiat.

Ok, let me specify:
The best fork would be the one containing coins with highest deflation per time interval.

dancupid

hero member

Activity: 955

Merit: 1002

Quote from: Spekulatius on June 24, 2012, 12:00:19 PM

Quote from: dancupid on June 24, 2012, 11:19:27 AM

All a fork would do is create a less attractive version of Bitcoin. And once the fork happens how do they control it? How do they enforce it? And which government?
If every government created their own fork with their own rules then inevitably market forces would kick in and the best fork would win - and the best fork would be the one that was most independent of government control and we already have that.

The best fork would be the one with coins being accepted at most places for goods being bought most frequently by its users.

It would be the best fork for transactions, but it wouldn't necessarily be the best place to store your wealth. Gold has proven itself to be a better investment than dollars, but no one accepts gold for payment over the counter. Bitcoin has also proven itself to be a better investment than usd - but few places accept bitcoin.
Digital currencies are potentially interchangeable & transferable immediately.
It wouldn't matter which coin was accepted at the POS if you could exchange them in real time, which is easy with bitcoin like currencies - not so easy with fiat.

Spekulatius

legendary

Activity: 1022

Merit: 1000

Also, it has been mentioned a couple of times in this thred that it would be nearly impossible for any government to enforce usage of "statecoins" due to the abilities of the bitcoin code and network. That may be true for a small fraction of computer savvy users prepared to take risks. But it wont be feasible or appealing for the vast majority of mainstream users. Especially if the level of punishment for non compliance is raised to the level of punishment of, lets say money laundering, which in oppinion is a likely option.

Spekulatius

legendary

Activity: 1022

Merit: 1000

Quote from: dancupid on June 24, 2012, 11:19:27 AM

All a fork would do is create a less attractive version of Bitcoin. And once the fork happens how do they control it? How do they enforce it? And which government?
If every government created their own fork with their own rules then inevitably market forces would kick in and the best fork would win - and the best fork would be the one that was most independent of government control and we already have that.

The best fork would be the one with coins being accepted at most places for goods being bought most frequently by its users.

Realpra

hero member

Activity: 815

Merit: 1000

Short of going into peoples home, checking their client version and killing them if its wrong you can't control BTC.

Even in a dictatorship the regime would likely loose too much public support and waste too many resources attempting this.

51% attack:
Only lets you obstruct payments, NOT change the protocol as has been mentioned.
Even obstruction only works until everyone blocks all the IPs you have access to.

Tracking:
TOR and mixing services lets people communicate highly anonymously using BTC. See Silkroad for example.

Pushing it underground:
Just forces people to convert to cash in public while converting back to BTC at first underground exchange.

This would basically accelerate inflation into hyper inflation even while the country appeared to be using the state fiat.

At that point the government would HAVE to accept BTC for taxes or collapse.

BTC is THE ultimate weapon in non-lethal struggle against oppressive forces. Its going to be a wildfire at some point.

Whats a strike next making every cop and soldiers paycheck worthless?

dancupid

hero member

Activity: 955

Merit: 1002

All a fork would do is create a less attractive version of Bitcoin. And once the fork happens how do they control it? How do they enforce it? And which government?
If every government created their own fork with their own rules then inevitably market forces would kick in and the best fork would win - and the best fork would be the one that was most independent of government control and we already have that.

Bungeebones

full member

Activity: 178

Merit: 100

Someone posted that the Canadian government was launching digital currency and couldn't believe it ... so I googled it and, yes, sure enough, there it was .. http://www.thestar.com/business/article/1159513--royal-canadian-mint-to-create-digital-currency

Now, this would be a typical way a government could react so I took a couple of quotes from the article to "amplify" what they are REALLY saying Cheesy

Quote

The difference with MintChip is it doesn’t plan to link to a person’s bank account or credit card information. And unlike BitCoin, a peer-to-peer hosted digital currency with a fluctuating value, MintChip is simply a new way to exchange Canadian dollars. Plus, it’s backed by the Canadian government.

should read "And unlike BitCoin, a peer-to-peer hosted digital currency with a fluctuating value and that has a self adjusting system to limit the production of new currency, MintChip is simply a new way to exchange Canadian dollars. Plus, it’s backed by the Canadian government who can create as many of the currency it wants (just like it does now) and destroy the value of the currency Grin

Quote

It’s still too early for specifics such as how the Mint will make a profit from this, how it will prevent hackers from stealing cash, whether the money is anyway traceable or who exactly will load a chip with money, but Brûlé said the response to the contest has been tremendous.

Ok, so they are proceeding to create money out of thin air and wonder "how the Mint will make a profit from this". Are they retarded? LOL

Transisto

donator

Activity: 1731

Merit: 1008

Quote from: gilgil on June 24, 2012, 10:31:30 AM

Quote from: hazek on June 24, 2012, 09:54:58 AM

Quote from: gilgil on June 24, 2012, 09:41:25 AM

As with any changes to the bitcoin protocol, you have to have more than 50% of the hashing power accepting those changes, otherwise you're just wasting electricity...

That's not true. The 51% hashing power attack allows only to carry out the double spend attack.. Anyone with a single CPU miner can fork the chain with different rules.

As I understand the protocol (pls correct me if I'm wrong), if a mining node or group of nodes decide to change bitcoin rules, the blocks they submit will be rejected by genuine bitcoin nodes, right? So these guys will be trading something, but it won't be bitcoin... If they want to join back the genuine bitcoin blockchain, they have to throw away all their effort (the alternative chain), unless they have more than 50% of the hashing power, in which case the alternative chain will win.

If they really want to, they'll have that 51%, "it's to protect the public", so they'll say.

gilgil

member

Activity: 60

Merit: 10

Quote from: hazek on June 24, 2012, 09:54:58 AM

Quote from: gilgil on June 24, 2012, 09:41:25 AM

As with any changes to the bitcoin protocol, you have to have more than 50% of the hashing power accepting those changes, otherwise you're just wasting electricity...

That's not true. The 51% hashing power attack allows only to carry out the double spend attack.. Anyone with a single CPU miner can fork the chain with different rules.

As I understand the protocol (pls correct me if I'm wrong), if a mining node or group of nodes decide to change bitcoin rules, the blocks they submit will be rejected by genuine bitcoin nodes, right? So these guys will be trading something, but it won't be bitcoin... If they want to join back the genuine bitcoin blockchain, they have to throw away all their effort (the alternative chain), unless they have more than 50% of the hashing power, in which case the alternative chain will win.

FreeMoney

legendary

Activity: 1246

Merit: 1016

Strength in numbers

Quote from: hazek on June 24, 2012, 09:54:58 AM

Quote from: gilgil on June 24, 2012, 09:41:25 AM

As with any changes to the bitcoin protocol, you have to have more than 50% of the hashing power accepting those changes, otherwise you're just wasting electricity...

That's not true. The 51% hashing power attack allows only to carry out the double spend attack.. Anyone with a single CPU miner can fork the chain with different rules.

Yeah. There have already been forks with little power or interest. They could have stupidly called themselves Bitcoin also.

Also, even a majority of miners playing by new rules won't change the fact that merchants will still want the real thing. Bitcoin isn't valuable because miners burn up energy mining it, it is valuable because merchants will give you something you want for it.

hazek

legendary

Activity: 1078

Merit: 1003

Quote from: gilgil on June 24, 2012, 09:41:25 AM

As with any changes to the bitcoin protocol, you have to have more than 50% of the hashing power accepting those changes, otherwise you're just wasting electricity...

That's not true. The 51% hashing power attack allows only to carry out the double spend attack.. Anyone with a single CPU miner can fork the chain with different rules.

gilgil

member

Activity: 60

Merit: 10

As with any changes to the bitcoin protocol, you have to have more than 50% of the hashing power accepting those changes, otherwise you're just wasting electricity...

zebedee

donator

Activity: 668

Merit: 500

Quote from: Bitcoin Oz on June 24, 2012, 12:03:41 AM

What happens when bitcoin forks the government ?

Lol, best thing I read all day!

Kluge

donator

Activity: 1218

Merit: 1015

Quote from: Bitcoin Oz on June 24, 2012, 12:03:41 AM

What happens when bitcoin forks the government?

Bitcoin Oz

hero member

Activity: 686

Merit: 500

Wat

What happens when bitcoin forks the government ?

bitplane

sr. member

Activity: 321

Merit: 250

Firstbits: 1gyzhw

Quote from: hazek on June 23, 2012, 12:45:21 PM

It's simple: those who want to, can follow their rules and those who don't want to, need not follow their rules. Besides there are enough tools available to hide your "illegal" use of Bitcoin that I think no one will ever follow any rules other than the agreed upon Bitcoin rules they have to follow if they want to use it.

I said assume it catches on and replaces PayPal or Visa. At this point governments will regulate it, and they *may* do this by adjusting the rules of the network. For example they may publish a blacklist of known money laundering accounts and say that a valid block must not contain transactions from accounts in that blacklist, or maybe they'll go for a whitelist approach and force people to register their addresses for tax reasons, maybe they'll put some central override in for returning stolen coins. Whatever those rule changes it will create a regional fork the block-chain, legitimate merchants in the affected region won't be able to accept vanilla BTC and this will fuck with the economy.

FreeMoney

legendary

Activity: 1246

Merit: 1016

Strength in numbers

The government can easily get away with calling things by their wrong name (defense, lol), but it won't change the fact that the 'bitcoins' the government sends you won't work.

hazek

legendary

Activity: 1078

Merit: 1003

It's simple: those who want to, can follow their rules and those who don't want to, need not follow their rules. Besides there are enough tools available to hide your "illegal" use of Bitcoin that I think no one will ever follow any rules other than the agreed upon Bitcoin rules they have to follow if they want to use it.

I do think if they ban the use of Bitcoin in a certain country people in that country will have a slightly harder time getting some which may result in a price drop due to a diminished demand especially if that country is one where most of the current demand comes from.

bitplane

sr. member

Activity: 321

Merit: 250

Firstbits: 1gyzhw

Quote from: Explodicle on June 23, 2012, 11:54:39 AM

Assuming it works and people actually run the fork, then it would be incredibly easy to exchange Statecoins for Bitcoins online. The exchange is our biggest weak point, so as long as a decentralized irreversible system exists, we benefit.

Yeah and as holders of Bitcoin today, we'd own shares in each of the block chains that came after the fork. Hopefully they will be worth more than the originals in the long run.

Topic: Politicians forking the block chain (Read 2743 times)