Topic: Why was USA Senate so friendly to Bitcoin? (Read 3752 times)

Regarding the original post: whether inflation is high or low, the US dollar is far from "toast". (If it were, then bitcoin would be "ashes" after its recent swings.)

The US government is friendly to bicoin for the same reason it is friendly to day trading and high-frequency robot trading in the stock market, or gambling in Las Vegas. As long as a business takes money from small players and brings profit to large players, it is "good". It stops being "good" only when big players get burned (as they were with Madoff and Enron).

HOLY SHI$$$$, I give it about 18 more months and all hell breaks loose.

Good find. The red parts are the real content, this is why bitcoin never can be endorsed by any state. The rest is just incompetence or desinformation.

Prepare for a fight.

fortunately each government adopts different policies

Yeah methinks taking down bitcoin would be trivial compared to Suxnet

you guys are dumb as hell

if governments wanted to get rid of bitcoin it would be gone in weeks

i have posted this a million times

In fact I have a new way how to fubar bitcoin so bad its ridiculous

1) ban all bitcoin exchanges
2) use deep packet inspection at critical traffic points of internet to "break" bitcoin traffic into multiple networks by filtering the bitcoin traffic into regions, fooling bitcoin to split into multiple networks. Say 5 or so bitcoin networks globally of equal size for an hour. Then kill the filters and watch bitcoin network go batshit crazy as the 5 networks now fight amongst each other all with different versions of the ledger as they try merge up, chaos as people lose coins, wallets, transactions. repeat at random time intervals with random global IP ranges.

bitcoin mayhem and death from above.

Uhhh, gee thanks for "helping me out", so glad we have those great people like you and our sacred senators collaborating in our best interest.

Had I know about John Nash's vision, and our senators benevolent leadership, combined with a few brilliant citizens such as yourself, then I would have crawled into my warm bed last night and cozied up to my teddy and thanked our founding fathers for such a wonderful country. Thenclosed my little tired eyes and went to sleep under the poster on my wall that says "BitChicksHusband, John Nash and the Senate will save us all"

Mount Gox evidently didn't fill out their US bank account application correctly and was charged with a violation of 18 USC 1960 "operating an unlicensed money transmitting business"
http://www.gpo.gov/fdsys/pkg/USCODE-2010-title18/html/USCODE-2010-title18-partI-chap95-sec1960.htm

http://thegenesisblock.com/wp-content/uploads/2013/08/Gox-Wells-Fargo-Seizure-Warrant.pdf

Mount Gox is currently seeking 50 State licensing in the US which can take up to 18 months.

FinCen was talking to Mt. Gox in March and shut down their account months later when they still failed to comply.

They understand the writings of John Nash (Nobel prize winner in Economics) and you don't?

(To help you out: Countries get rich when their people get rich.  Letting Americans get in earlier than everyone else in bitcoin makes them rich and makes America rich.  They likened it to accepting and investing in the internet in the early days.)

+1

Somethings gotta give, and the bond market would be a good place to kick the chaos off. Something easy(-er) to comprehend, like a debt default, stock market crash or dollar exchange rate crash is not quite how the perpetrators want it to happen, if you want the average person confused that is. "Credit crunch" was a convenient way of characterising what happened in 2008, as it described the effect but not the cause. Expect some crazy media spin next crisis too.

Just in defense of the weak US dollar aspect, people really should be looking into the bond market. With QE3, the Federal Reserve has fleeced many people who don't understand how treasury bonds work. They're a reason other governments are only holdings short-term bonds these day. Since the power of the US dollar is so closely related to the bonds market and interest rates, it's a recipe for disaster considering the egregious amount of national debt looming on our shoulders.

It would be worth everyone's time to do a google search on some terms such as "EQ3", "Bonds Market Collapse", "Treasury Bond Interest Rates 2013", "US Debt Default Consequences", and "February 2014 Shutdown".
These are all very real things and give very sound reasons why to have money in Bitcoin right now.

Not a bad idea.  There seem to be a few exchanges and bitcoin related businesses in the US but I wonder if they are all following regulations or just trying to get away with it as long as they can.  Then one day the gov. can crack down and put some out of business.  But even if there is bad tax guidance can't the black market still use the coin?

Wow great post, thanks. However, things change overnight in the computer age. I wouldn't be surprised if Bitcoin in 2014 forces the governments hand.

With about 10 alt coins showing up a day, certainly the governments ability to generate their own would not be too incredibly difficult.

I don't believe the US will ever "forbid" bitcoin.

If the US government wants to make bitcoin go away all they have to do is issue onerous tax guidance that make use of bitcoin more expensive then other value transfer systems. To the extent other jurisdictions follow suite, the price goes to zero.

I agree with you. Libertarian tendencies tend to go after personal profits and many will only look at what they can get out of bitcoin.
Possibly the US hasn't forbidden bitcoin yet as they want to see the reaction from the masses but they will someday, for sure, somehow they went against *everything* they didn't like during the last decades. how can they leave bitcoin?

In 1995 the 104th Congress's House of Represenetatives Subcommittee on Domestic and International Monetary Policy of the Committee on Banking and Financial Services held 4 separate hearings on "The Future of Money."  Alan Blinder, then Vice Chairman of the FED testified:

"Discussing that point raises the question of whether the Federal Government should issue its own electronic currency. Government-issued electronic currency would probably stem seignorage losses and provide a riskless electronic payment product for consumers. In addition, should the industry turn out to he a natural monopoly, dominated by a single provider, either regulation or government provision might be an appropriate policy response. But to draw that conclusion now seems much too premature. The availability of alternative payment mechanisms will mitigate any potential exercise of market power, and government issuance might preempt private sector developments and stifle important innovations.

Finally, the government's entry into this new and risky business could prove unsuccessful, costing the taxpayer money. So while we do not rule out an official electronic currency product in the future, the Federal Reserve would urge caution. "

They didn't do it then and I don't believe they would do it now.  Certainly not after the recent roll out of the Health Care debacle.
https://archive.org/details/futureofmoneyhea02unit


Canada however has been developing a centralized electronic currency, the "mint chip," over the past few years.
http://www.mint.ca/store/news/royal-canadian-mint-launches-mintchiptm-developer-challenge-14900005?cat=News+releases&nId=700002&nodeGroup=About+the+Mint#.UsWqpvS1y-0

I can't help but think that the government will come out with its own crypto currency in the near future (within 36 months). Therefore they are sending a message that this is great technology but not endorsing Bitcoin per se. Build confidence in the subject but then provide a mainstream alternative that lets them stay in control.

If the government came out with its own currency, the masses would buy it over Bitcoin. I think i am in the vast minority when it comes to my Libertarian tendencies, most people would trust a US Government backed Crypto currency.

It was weird, it's like the Senate was friendly to BTC but some other US actions have not been so friendly.  I think the Congress needs to get a policy together on BTC but I doubt that will happen.  The thought has also occurred to me that they are being friendly because China's yuan will be taking over but if the US moves first on cryptocurrency we can have a reserve currency to compete with China's because it won't be the dollar.

I think the senators are early adopters of bitcoin.

It is very simple: A government could benefit hugely from bitcoin and erase their national debt by investing in bitcoins first and sell the coins to peoples in other countries later 

Who was born before 1964, has two thumbs, and is an all-in hodlor? This Guy! d[ o_0 ]b

That is encouraging. But is has not been my experience.

Regarding legality FinCEN included the term "or other value that substitutes for currency" to include virtual currency so even if you are trading on Cryptsy that is money transmission according to US law.

I always understood any actions so far from the USA government have been warranted issues about laundering, crime, et cetera. I am relatively new and haven't researched all of these events, but keeping USD/BTC exchanges in line with standard banking laws would make sense to me. Just because it is BTC doesn't mean you can ignore existing law with regard USD.

I haven't seen anything yet from the USA that suggests they are truly fearful of this as a currency, yet those in the know most certainly would be.

I wasn't born before 1964, however, I don't agree. I have not seen any difference at all whatsoever in explaining bitcoin to a gray hair as opposed to a SnapChatter. If anything, Gray Hairs are far more likely to have an interest and the light go on, from what i have gathered. I do think Gray hairs are more likely to have a red light go off as well and avoid it all together.

I'm going with this option, they're that greedy it's actually working in our favour, think about it as well, because of Bitcoin being very difficult to trace by government authorities they're going to be able to take all kinds of political donations and bribes without anybody knowing about it, it's simply too good for them to outlaw. The only person who actually wants to have free market currency competition in the whole government I suspect is Ron Paul, the rest of them are looking at it because it's a new way of making money.

^(what are you still doing here BCB, talking like a paedophile?)


Slightly.... I think that the government organisations must realise that if only one country refuses to play ball on treating bitcoin harshly, then they're trying to hold back the tide. I think the Japanese have proved this with allowing Mt Gox to run for so long. Bitcoin would have been seriously weakened if Mt Gox had been taken out of business in the early days. Instead, they expanded into offering 16 different major currencies. That's a serious middle finger to any other government or political figures who might want to slow down bitcoin take-up.

So, bearing in mind you can't beat this thing, the best option is just to embrace it. Reluctantly. And so you shut down all the homegrown startups who aren't in with the in-crowd, and allow existing corporations to take over running bitcoin service companies. Which is broadly what's happened. I expect someone like Bitpay or Coinbase have had good political connections from the start, or now have some new lawyers and board members.

I'll just leave this here.

The next Steve Jobs may be reading:

“Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

We must understand that almost anyone born before 1964 can not possibly understand the tremendous potential of virtual currencies.  (My apologies to those that do).

As the younger generation to comes into power in business and government we will see this type of technology fully adopted.

#7.  Most people in government are still normal, thoughtful and open-minded.  The hearing wasn't a "love fest" but was instead a balanced discussion about a powerful and exciting new technology.  

That is a complicated question.  As a political issue of course Legislators are considered about tax revenue, unemployment and consumer protection.

Unfortunately the regulators do not care about this.   Read the senate testimony.  Then are on the record as saying that any benefit gained from moving a business off shore will be short lived as other countries will catch up the the level of US regulation.  And we have already seen this most recently in China and India.

... so far we've had pre-emptive seizure of Gox funds (main exchange), cease and desist orders, industry-wide subpoenas in State of NY, warning letters from FinCEN (makes me wonder if any of the mega banks ever got warning letters, cease 'n desist or subpoenas for sub-prime CDO mark-to-model accounting?), banks severing business without warning or reasons offered may also be due to regulator pressure ... and probably more ... but most of the original entrepreneurs in bitcoin space have given up on US, the only ones playing now seem to be able to 'know' how to grease the palm of the regulators to keep their doors open

Am I naive to think that the Senate believes that expanded jobs and business based around cryptocurrency technology could be good for the U.S. (lower unemployment, more tax revenue)? And that politicians don't want to see all the business, talent, and capital associated with Bitcoin go to countries with more favorable attitudes? And perhaps they are able to recognize the parallels to the early days of the internet, and the see how well that worked out (for commerce and spying)?

Wanna know why the DC reception was so "receptive"?

read this:
http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/21/heres-how-bitcoin-charmed-washington/

It chronicles Patrick Murck and the Bitcoin Foundations maneuvering in Washington leading up to the hearings. 

And know that "BITCOIN A Primer for Policymakers" by BY JERRY BRITO AND ANDREA CASTILLO of the Mercatus Center was distributed to every legislator and government regulator prior to the hearings.

http://mercatus.org/sites/default/files/Brito_BitcoinPrimer_embargoed.pdf

ok what are regulators doing in the usa regarding bitcoin?

.... the senate was quiet and smiley because they know that their regulators are out there stabbing it in the back to death on a daily basis ....

watch what they do, not what they say.

Maybe they know that NSA spying is coming to an end and those supercomputers will have to be re-purposed. SUPERMINERS!

If being a black market currency is the Bitcoin end game then I would jump out now as we are in for slower growth and in my opinion limited up side.

I am not sure how everyone seems to be so comfortable that Bitcoin is now past some magical point where it is now and will forever be a legitimate asset in the eyes of government. China should have had a bigger impact on the market than it has in my opinion, unless I am missing something. How would any world power simply step aside and let Bitcoin become the base currency of the world?

Or increase it. Black markets can be very lucrative. Nobody really knows what would happen. What we do know is that it is very unlikely to happen.

Being an underground currency would reduce the upside of Bitcoin by 100 fold.

#6. They realise it's dangerous not to take tentative steps to just accept cryptocurrency (slightly similar to #4, I know). If another nation gets a larger piece of the action than the US, and everyone starts following that nation's lead, then it won't just be the dollar that's toast.

The truth is that all 20th century, post Bretton Woods fiat currencies are toast on some timescale, and the US national debt was bound to catch up with faith in the USD at some point. But until something totally jammed the mechanisms of the virtuous circle jerk that is our international trade and finance system, the make-believe game where everyone could honour their unpayable debts just carried on. The 2008 systemic failures were the first signs that the model was running out of road, that the only option was to print money like crazy to cover short term debt, so that the mechanism could keep moving until a definitive plan could be arrived at.

Now there's a get out available, one that will be conceivably impossible to bend toward the same malfeasant incentives of the old system. I think the problem is, that the programmers haven't finished writing the software for the whole system yet, and that the other ancillary support aspects that will replace the financial system itself are currently internet based versions of the old model. We're in for a bit of a squeeze between the dying old system and the incomplete new system right now.

This isn't a new topic. Bitcoin is worldwide. There is so far no plausible way to get rid of it short of politicians worldwide agreeing to make it illegal, and even that would only drive it underground.

If the government wanted to destroy bitcoin, they would. Stuxnet is the best example of nefarious government intervention (USA or otherwise). The mayhem they could unleash would be underestimated by anyone in this community by an order of 100.

Mining pools are not big centrally led corporations. They are composed of individual people - that's you and me - who sign up because they can make a bigger buck that way. Many of them would simply leave unreputable pools. Someone would have to run the numbers but I expect the cost for something like that, even if it was realistically possible, would already be in the billions. The longer things go on the more it would cost. And there is no way they could keep it a secret given the number of ordinary people involved. If they tried and it became known it could be cause for war. Real ones, not against mud nations.

Exchanges come and go, new ones will replace the old. More secure ones. Maybe even decentralized unhackable ones.

We are already dealing with malware and virus every single day. Just another bug to watch out for. If the virus that locks your computer until you pay bitcoin to have it unlocked doesn't cause a stir, nothing of that nature will.

I have not a single clue what the hell you are talking about.  It seems you are pissed that I seem to believe the dollar is toast. Beyond that are mad that i think politicians are possibly all stupid.

1. EVERY government and for that matter currency ever invented by man has failed. Mankind certainly has not figured it all out.
2. I suppose you actually believe that simply because the USA has apparently done so well through 200+ years of turmoil that there is no problem too big, no adversary too powerful, no circumstances to complex that positive thinking and the Senate, Congress, and the President cannot solve.

But again, you are pissed about something but frankly I have no idea what.

If you have another suggestion than the five I mentioned, then what is it? Bitcoin is a blip and a fad and politicians know it, so lets not get to excited?

#4 wouldn't be all that hard would it? How might the world's largest intelligence agency destroy bitcoin? 1. Use greed to entice a few mining pools into destroying confidence by being selfish miners 2. Use espionage to undermine the largest exchanges. What would six well timed thefts of millions of coins do to the market in 2014 or beyond. 3. Create malware or worse that simply destroys trust in the system (think about the Iran nuclear program virus)

So you are what, at least 60?

Look to your own surroundings to see what's really vulnerable. If you think someone's scoffing, it ain't us

Dumbass kids these days are all mouth and nothing else. You brats realize things always 'come to a head' when there's conflict, no?

Your ignorance reeks of childish ideas about what constitutes 'worth' and 'strength', and most of all 'victory'. Enemies 40 years ago were far better, and they had to accept what you are running away from today

Different day, same bull shit from fools...

It's not "recent". Things are just coming to a head in these recent years. Expect more of the same.

Maff.

Re: #4: Explain how or delete that part, please. It gets old.

I need to know how everyone all of a sudden became experts in currency power and stability recently.

Really, if dollar is 'toast', then you need to look at some of the other currencies that are too vulnerable to even keep their inflation from going through 8% a month, with basic commodities soaring through 15% a month easy.

Everything has ups and downs. What really matters is who stands at the top at the end. Get the picture? I heard the same panic-ridden fearful and foolish talk after the vietnam war, the oil shock, the jap economic boom, etc. etc. Each and everyone of them was a challenge because they were unexpected and large. So is china. What's so difficult that we won't smash through? Or is that your personal wish?

Here's the thing: We got wishes too, and I don't think overestimating your own position for the sake of self-congratulations is going to get your too far without a spectacular defeat that unravels your 'success'. Already the developing economies are cooling while we see a different trend in developed nations, especially US. In the world of export and money, those with control over the currency holds the better hand. Realistically, who really is dreaming here about relative will and strength?

'They are all stupid'.

Is that the best you got?
 

Along with china, the huge run up last fall was also driven by the then-coming Senate hearing and the almost love fest with Bitcoin at the hearing.

After seeing what then happened in China in December with their chilling-effect announcements, I cannot begin to understand why the USA spoke so favorably about Bitcoin and its potential.

What does the USA have to gain by allowing Bitcoin to thrive. And to be clear governments can kick Bitcoin to the niche baseball-card curb if it so desired. As much as Bitcoin advocates would love Bitcoin to rise above government's manipulative hand, Bitcoin can become nothing more than a way to trade between thieves with a single wave of a new law.

Here are some thoughts:

1. The dollar is toast and the USA wants to build some trust in the brand of "crypto-currency" not necessarily Bitcoin. Sets the table for a US based crypto currency. Heck Bitcoin is open source, why not let the code develop for a few more years, then steal it and make a USA pre-mined crypto overnight. They can just as easily at that time make Bitcoin illegal to own and provide a three month swap at current value to USA crypto.

2. The dollar is toast, and internally the government wizards see how Bitcoin and the like may be a future safe haven for value. So in their benevolence the good ol USA looks to provide options for us investors.

3. Those that consult the Senate are completely corrupt with their insider trading, financial instrument inventions, and back door dealings. So those consulting the Senate are poised to profit from Bitcoin success in some way. Coupled with Senate elect stupidity and they are easily lured into positive statements and a laissez-faire attitude. 

4. Bitcoin throughout the world is already a store of value. Speaking against it would only send our enemies running in faster. The USA needs some more time to infiltrate the Bitcoin Foundation and destroy it from the inside.  The USA will destroy Bitcoin and maybe a few other Alts all at the same time, while simultaneously providing a new coin of their own.

5. They are all stupid. Yes they could potentially all be stupid to not realize the potential for crypto currency and what it can do to the position of the dollar in the world.

I think being stupid is the least likely, what are your thoughts??