Topic: What if the government... (Read 2354 times)

Gov't really doesn't know how to deal with the p2p cryptocurrencies, so the pols will do what they always do: they will kick the can down the road and pray that they are outta Dodge with their loot before the fat lady sings.

Agree, governements tend to outlaw what they can't regulate (especially if there's money/and or resources involved), and when they regulate something it tends to legitimise it.



This I disagree with, this is kinda a broad stroke that assumes everyone breaking the law would have no boundaries. Lots of law breakers still have certain morals, certain lines they won't cross.
Someone may help launder drug money because they themselves think drugs shouldn't be illegal, but the same person might draw the line in dealing with a terrorist.

Not a lot of people buy marijuana tax stamps. You can either regulate something or you can ban it, but you can't do both. Banning something means giving up the ability to regulate it, and that's an awfully high price to pay. People who are breaking the law anyway won't care if they're laundering drug money or financing terrorism, and they won't go the cops if they suspect people they're dealing with are doing bad things.

Outlaw Bitcoin is difficult to enforce. However it is possible to create high entry barriers for Bitcoin market just by demanding, for example, a bank permission.

Definitely not generally.  I mean, there could simply be a law established that says "Bitcoins cannot be accepted, held or transferred" but it would be nonsense.  It's a really unlikely scenario, but if it did happen it would most likely be a functional description of the type of technology that cannot be used - but this is a situation where the genie is already out of the bottle.  It's extremely improbable that it's going to be put back.  Barriers to entry can be set up however, which would hamper the mainstream acceptance of the currency, and/or lead a majority of people to believe that it is primarily used by illicit groups for nefarious purposes.

That soft touch approach is far more likely than a ban of any kind whatsoever.

Everyone is talking as if Bitcoin is essentially and primarily a US phenomenon. This is manifestly not the case--most assume that Bitcoin originated in Europe somewhere, and its acceptance is more advanced there than in the USA. The point is, no one government can unilaterally shut down Bitcoin; at most, it might drive it offshore.

That's not how the legal system works.

You can't get away with selling cocaine by calling it "sugar" or whatever. You can't even get away with selling cocaine by slightly modifying the molecule so it's not actually cocaine anymore, but still has some of the original effects.

If they ban bitcoins (which I think is unlikely), you can be certain that they will phrase the law in such an overreaching way that ALL bitcoin-like systems are banned.

However, such a law would need to be so overreaching that most tech-minded people would probably just ignore it.  A similar thing happened with overreaching laws banning cryptography back in the early days of the internet.

I expected a drug war type of scenario.

but at this point, the US will implode due to hyper inflation as it will be a public announcement of fiscal failure and a sure sign to other nations to support  BTC as a means of being free from US control, and they will do it. The cheapest most effective weapons system ever.

This would be the ultimate shot in the arm for BTC to take it global

What happens with those who choose not to leave the country? Would it be reasonable for them to expect to get paid back at least the fiat currency funds they still had in their accounts at various exchanges?

OK. Here is the future I envision...
Bitcoins gain in popularity over the course of the next X years and begin to cut into the US government's tax revenues and as a result their ability to fund entitlements, the military industrial complex, and make interest payments to bondholders. Democrats and Republicans alike see this as being a threat to the republic and declare that bitcoins are to blame. The politicians turn up the rhetoric and "wrap themselves in the flag". Only a few libertarian leaning congressman/woman are in favor of this competing currency and are quickly dismissed by their collegues and MSM as being kooks. A "war against this unpatriotic medium of exchange" is declared "threatening to destroy America as we know it" and its ability to act as a "defender of worldwide democracy and freedom". Bitcoins are found to be unconstitutional. Any person or company/entity discovered to be trading, holding, or accepting bitcoin within the US is prosecuted to the full extent of the law. Websites are monitored for those which accept bitcoins and are shut down. The bitcoin economy is stifled within the US and is driven overseas and underground. I leave the country.

Or, more likely, you will take your coins to the grave.

Bitcoins illegal?
Citcoins?
Ditcoins?
Litcoins?

I guess they can ban bitcoins, as long as everyone is cool with updating their client to change the name.

No I didn't.
Will do.
Apologies.

Governments have, and will have more tools at its disposal as more large businesses adopt or are born from Bitcoin. No-fly-lists, bank holds... Vitalik did an article I enjoyed reading in #5 of BTCMag regarding information oligarchies. Amazon could refuse to share their data with businesses the USG doesn't want them to. None of this necessarily needs to be written into law to happen. For all we know, governments could be actively sabotaging many Bitcoin businesses, though it's probably incompetency, not malice.

Bitcoin's not some tiny $10m/yr basement project anymore.... Truly p2p, government doesn't have much recourse. Once businesses are so large, they must comply with filing regulations or risk having officers imprisoned, it's the businesses without much recourse. Until a certain point where the tables turn utterly (see HSBC), governments have registered businesses by the balls. BitInstant, BitPay, Gox -- those would be the ones I'd worry about facing unfair challenges. The coffee shop down the street which takes BTC, though? Naw - probably not. It'd be seen as a larger war on privacy governments have been waging since cryptography and the public's access to it (the Internet) really took off, which is part of an even larger war against "peasants" trying to live as they will. Particularly with the USG, they frequently won't declare war on something (or declare something illegal) before going after it with all resources at their disposal.

possession of Bitcoin illegal? That would be less a point than outlawing possession of torrent nodes.

More likely an advisory decrete to banks that Bitcoin attracts shady types and giving acounts to businesses dealing with Bitcoin will make you a subject for frequent auditing of these coustomers accounts.

Will that happen in some countries? Will that be a setback? When the Mit Romney extorsion played out, exchange rate climbed!

If Bitcoins statement is that we don't need banks, it would be rather embarrassing if it can't survive without them.

What if the government makes it illegal to drink water?
It depends what government you mean. If you mean the United States, I don't think so.

they'll have to pry my bitcoins out of my dead fingers

What if the government makes it illegal for merchants to accept Bitcoins?
Is this plausible?