UPDATE: I've bumped this thread in light of the recent events with Mt Gox which may catalyze the kind of draconian regulation we do not want. Now more than ever is the time for Bitcoin businesses to federate and set their own standards instead of a bureaucrats that have scant idea of what a Bitcoin truly is.------------------
Let me start by saying I find the idea of regulating Bitcoin a tenuous one at best, but the biggest argument that the
pro regulation crowd has in their favor is that it will afford Bitcoin greater legitimacy and accountability as it moves towards mainstream adoption. This may be all well and good, but the biggest problem I have is just
who would be providing this legitimacy and accountability.
Already we are seeing
pro crowd individuals and companies reaching out to government almost begging for Bitcoin regulation. They are convinced that the legitimacy that would come from it would better allow Bitcoin to spread and support whatever business model they happen to believe in as well as other social benefits to prevent the abuse of Bitcoin.
And they have a point.
There are specific issues around the use of Bitcoin that deserve an answer, things like the sale of child pornography that everyone would agree needs to be stamped out with extreme prejudice. Bitcoin itself is innocent in all this, it's purely a means to exchange value and no different to the dollar note in that regard but unfortunately these issues are going to be repeatedly raised by regulators and anti-bitcoin groups and used to beat Bitcoin over the head with to support their argument and goal of ultimately having Bitcoin banned or regulated into near uselessness.
This is not an ideal outcome, but the thing is if we look back in history something very similar has happened before.
I refer to the inception of the Comics Code Authority back in the 1950's. Have a look at the Wikipedia article about it if you want to know the details:
http://en.wikipedia.org/wiki/Comics_Code_AuthorityIn short, back in the early days of the comic book industry there were public concerns about the sexual and violent content of comic books and the influence they had on young people. This "wild west" of comic publishing led to - like Bitcoin - Senate inquiries - which gave real concern from publishers that they would become subject to draconian regulation that went far beyond banning the areas of concern but severely limit the creativity and stories that could be told. As a result of this the comic book publishing industry pre-empted laws and regulation by creating a self-regulating code that was run by the comic publishing community and set the standard by which stories and comics would be produced. This body became known as the
Comics Code Authority and provided a means for the publishers to deal with the worst of the rogue publishing elements and blunting the argument of the biggest anti-comic proponents. The code remained in place for several decades, but eventually a shift in community attitudes led to it's abandonment by most publishers a decade ago.
So what does this mean for Bitcoin?
Perhaps we should let history be our guide and look at creating a similar institution - a
Bitcoin Code Authority under the trusted auspices of say the
Bitcoin Foundation. If a common code that address the worst negative criticisms against Bitcoin could be put into play with a seal or badge that business display on their sites to indicate voluntary adherence to the code this may go a long way towards blunting the biggest arguments of Bitcoin's biggest critics and allow the community to retain control of the situation and avoid the risk of becoming over-regulated by government.
I am
not advocating this lightly and while it isn't designed to address person-to-person transaction issues it would go a long way to protecting the embryonic Bitcoin marketplace as it develops. And like the history of comic books - one day when the world is more enlightened and used to cryptocurrency we may be able to quietly do away with it completely.
Thoughts everyone?