Topic: What BTC needs is federal regulation (Read 1203 times)

There has been centuries of discussions on price fixing. It won't work in the sense that your goal is to provide everyone with a simple conversion and forecasted value equation. It would require traders to act as a cartel voluntarily, and there would eventually be a shortage on one side or another, either BTC or goods sold for BTC. So it could never be tested, and if it were tested it'd fail.

I think BTC is "hyperdeflating" and is extremely sensitive to people's valuation of it over the long term. I have full confidence it will win out gradually, voluntarily, or suddenly in the bad case of fiat hyperinflation. But my valuation alone means extremely little in determining a price for BTC. BTC will beat gold/silver after the almighty dollar bc it's transparent, honest electronic record keeping is already in place. Metals banks and exchanges would have to establish and build trust slowly, and only after major legal changes (or fiat crash).

I have thought about this as well.  Has there been any discussion of setting an "official" conversation rate for BTC?  That seems like the best policy at first glance to me.  Then people can use BTC without any fear that their value with go up or down like 1 hour later, and it won't destroy the fiat system.  But I bet many BTC ppl WANT to destroy the fiat system, so that probably won't work.

I agree, the same pressure would impact both, but people at some point or another will have to make the sacrifice to encourage BTC sales, by which I mean setting up point-of-sale technology and ultimately discount for BTC. An effective tax through licensing BTC exchanges would (forcefully) impose a discount for BTC "buyers" who barter for it at lower rates than the exchanges. For example, a web developer who also wants BTC for herself could either 1) take her USD earnings and pay the added cost of revealing her identity to licensed exchanges or 2) pay the added cost / forfeit the potential gain of USD sales in order to sell her product for the BTC she desires. This is the phenomenon that would create a difference between BTC "sellers" and "buyers." A BTC "seller" would be able to acquire the web development at a lower cost with BTC.

Merchants will have to make this decision voluntarily in hopes of establishing themselves in the BTC market in the future, or, if regulation were imposed, to simply acquire BTC. If they don't choose to discount their goods in BTC, this is an indication they are relatively satisfied with their fiat based revenue. In which case, fine. Ultimately, the free market will always win out. The other scenario is driven by the crash of fiat. In which case BTC "buyers" refuse to accept fiat for any good or service and only accept BTC. This, on a whole, is very very bad bc so many people who have fiat stored are essentially broke if their fiat acquires nothing. This is of no fault to anyone but the fiat managers who destroyed their own currency. However, that scenario also drags down everyone else, even BTC based producers bc there is less demand volume bc BTC penetration was not encouraged earlier on by BTC based producers.

Another way of simply restating my original message "bitcoin needs regulation" is "Bitcoin is a threat to fiat currencies. If fiat managers do nothing to hamper bitcoin and protect their fiat then they are only increasing the potential of destruction of their fiat currencies, which is a real loss that will affect everyone, BTC economy included." Absent any rational effort by the Fed/USG to protect their own interests and the interests of USD holders, it would be wise for BTC producers to take steps to encourage their customers to adopt Bitcoin in order to be in a better position when fiat finally implodes. I think Bernanke's reckless wind up of a massive hyperinflation potential aligns with the apparent inaction against Bitcoin. It is intentionally designed for maximum destruction.

What BTC needs may be different to what BTC will get.

I don't think it needs regulation, but it probably will get some, because most people don't want to be their own bank.

Although I see your point, liquidity is a positive thing for the Bitcoin economy.

I had an opportunity to pay in Bitcoin for an item I purchased in the past week. I wanted to show the merchant (which recently started accepting Bitcoin) my support, yet ended up paying via Paypal anyway.

Why? A year ago I would have paid in Bitcoin no questions asked. But all the effort it would take today to acquire replacement funds to replenish my wallet anonymously I decided just to pay in FRNs.

The same pressure you reference as pushing merchants towards "BTC based production" will stop buyers from purchasing these goods.

Ha ha! Fair enough, I guess, although I did provide a little more to explain my opinions than you did yours.

I hope anyone who reads my first comment under this topic sees I am in no way for federal regulation, or any coercion or violence of any kind. This is almost tongue in cheek, but I do wonder if it wouldn't help. Please help me, how much BTC volume per day do you consume or produce? And I am purposely excluding fiat exchanges and savings. How does that compare to your fiat volume? Do you see what I'm getting at? Something that motivates BTC users to go extra lengths to use it for production and consumption in place of fiat would benefit.

What horrible opinions you have.  I'm so dumbfounded by your post that's about all I can say.

I really think the bitcoin economy would benefit a year or two from now if federal regulators "cracked down" on it and required licensing to buy/sell USD for BTC. Why? Restrictions between BTC and USD would foster more BTC based production (natural resources, goods and services) even if costs currently favoured USD production because producers *want* BTC for the long run and can't acquire it anonymously through USD exchanges. Plus BTC thrives wherever people want to do private business *privately.* Conversely, if federal and state drug laws were abolished that would temporarily set back some valued BTC utility. Of course, USD inflation will probably be the final driver for BTC.