New York to Regulate Bitcoin.

[sizzlinsauce]

regulation of bitcoin can't happen in a sense, but they could regulate how people spend bitcoins, where they could make it illegal to exchange bitcoins without a mediator service that approves the transactions so that they can monitor who is buying and selling things like firearms etc

[Laize]

They can't just insert a fee, but they can refuse to include any transaction that doesn't include a fee/a big enough fee. Assuming a trivial number of altruistic miners (who may end up mining at a loss), that inclusion criteria would mean your transaction will ~never be confirmed, and thus never really happen.

I'm afraid I don't understand. It was my understanding the mining client couldn't provide preference to certain transactions and everything was just handled on a FIFO basis.

[Masark]

I'm afraid I don't understand. It was my understanding the mining client couldn't provide preference to certain transactions and everything was just handled on a FIFO basis.

No. A miner can pick and choose what transactions they wish to include based on any criteria they want. What you're describing is the default operation, but the default isn't the only option.

[Sunseeker]

I find it interesting that the entire premise of Bitcoin was the fact that it was beyond regulation... and they're trying to regulate that which was designed to explicitly be beyond the government's control.

Nothing is beyond the government's control so long as it is something that takes place within the borders of it's country or by members of it's citizens. To be beyond the government's control would require it to either never enter American borders or to be so impossibly powerful as to make regulation meaningless. And even if we can't regulate Bitcoin itsself, we can regulate how much of it you can own and what you can do with it.

[Laize]

Nothing is beyond the government's control so long as it is something that takes place within the borders of it's country or by members of it's citizens. To be beyond the government's control would require it to either never enter American borders or to be so impossibly powerful as to make regulation meaningless. And even if we can't regulate Bitcoin itsself, we can regulate how much of it you can own and what you can do with it.

No. You can't.

It's nigh-impossible to prove someone is the owner of a Bitcoin wallet ID unless they're extremely careless... so you can spend it on whatever you like. Especially if you use other forms of encryption to mask communication as well.

I don't think you understand how powerful cryptography and cryptocurrencies really are.

[someotherguy]

This makes me really nervous. I don't think those people can understand how this currency work. Right now they aren't regulating it, so if it goes down to 0, there's no issue - only to the people that use it (I don't). But if they regulate it, and it goes down to 0, they will have to bail out banks ... again (so that my money ... again).

Of course they don't care, they'll get their cut from regulators.

[Noblia]

If they want to legitimize Bitcoin it so fucking simple. Just open a multinational corporation. Peg the currency to a commodity or currencies. For example they can peg the currency to an index of g7 currencies. That way you avoid drops/increases in anyone currency. As long as they are absolutely transparent and control the currency without any issues then it will gain momentum quickly by international companies.

[Deleted]

I don't think you understand how powerful cryptography and cryptocurrencies really are.

I think you don't understand how frail they are and how far the arm of law reachs.

I wonder what would happen if you outright criminalize exchange with legal tender and ownership.
Bitcoin has no bluewater navy to support it.

This makes me really nervous. I don't think those people can understand how this currency work. Right now they aren't regulating it, so if it goes down to 0, there's no issue - only to the people that use it (I don't). But if they regulate it, and it goes down to 0, they will have to bail out banks ... again (so that my money ... again).

Of course they don't care, they'll get their cut from regulators.

You can't reduce the value to zero because its optimal for the blackmarket but you have to bubble those markets from clean money.

[Laize]

I think you don't understand how frail they are and how far the arm of law reachs.

I wonder what would happen if you outright criminalize exchange with legal tender and ownership.
Bitcoin has no bluewater navy to support it.

I'm afraid that sentence you uttered last wasn't even in English.

I'm not sure why any government would criminalize owning legal tender...

And second, I'm not sure how the government would even be able to feasibly prove you own a bitcoin wallet at all. The entire thing was built from the ground up with cryptography.

[Deleted]

And second, I'm not sure how the government would even be able to feasibly prove you own a bitcoin wallet at all. The entire thing was built from the ground up with cryptography.

Just fuck up during payment of something other than a midnight money exchange in a briefcase and they have the ip and your wallet.

You could channel it through different wallets but that doesnt matter you have to establish where you got the money from.
Iam not talking about ordering a Pizza.

[Masark]

I'm not sure why any government would criminalize owning legal tender...

And second, I'm not sure how the government would even be able to feasibly prove you own a bitcoin wallet at all. The entire thing was built from the ground up with cryptography.

1. Wouldn't be unprecedented. Didn't the USA ban private ownership of gold and silver coin/bullion sometime?

2. The traffic of a bitcoin client isn't exactly obfuscated. And having users have to go through means to conceal it is going to put a dent the size of Chicxulub in adoption.

[Sunseeker]

No. You can't.

It's nigh-impossible to prove someone is the owner of a Bitcoin wallet ID unless they're extremely careless... so you can spend it on whatever you like. Especially if you use other forms of encryption to mask communication as well.

I don't think you understand how powerful cryptography and cryptocurrencies really are.

Make reporting of Bitcoin ownership mandatory on your taxes. Now not reporting Bitcoin ownership is tax evasion which is a federal crime.

If you can't regulate the substance, regulate the people.

[Tirivaria]

Not exactly. The hoarded currency isn't being spent, which lowers the effective supply throughout the economy. Lower supply equates to higher value for the currency that IS being spent.

This is actually what will lead to the downfall of bitcoin in the long term. Because the ultimate quantity of bitcoins is capped, there will be deflationary pressure on the currency.

Inflation is commonly defined as too much money chasing too few goods and deflation the converse. People tend to focus on the quantity of money in that definition and ignore the quantity of goods and services. The quantity of goods and services in the economy will grow. The population will grow providing more labor resources and requiring more goods and services. If the quantity of currency is fixed that means you will have deflation. If a bitcoin you have now will be worth more later, you're encouraged to hold it as long as possible. As people hold their money, the amount in circulation decreases further increasing the deflationary pressure. Ultimately the system will collapse.

This is why central banks like the US Fed aim for a low target rate of inflation. It keeps the money circulating and deflation is horrible. The money supply must increase to accommodate economic growth.

[Masark]

If a bitcoin you have now will be worth more later, you're encouraged to hold it as long as possible. As people hold their money, the amount in circulation decreases further increasing the deflationary pressure. Ultimately the system will collapse.

I have doubts regarding the direness of this. The extensive "want it now" culture combined with that irritating "mortality" thing places a rather hard limit on hording.

[Laize]

1. Wouldn't be unprecedented. Didn't the USA ban private ownership of gold and silver coin/bullion sometime?

Yes, but that was because the government nationalized gold bullion. Unless they planned on backing the dollar with bitcoins, it seems unlikely that such a move would be constitutional.

2. The traffic of a bitcoin client isn't exactly obfuscated. And having users have to go through means to conceal it is going to put a dent the size of Chicxulub in adoption.

The traffic of bitcoin isn't obfuscated, but ownership is. Like the Swiss bank accounts of old, you are only a number, and whoever holds the number and key to your wallet is the owner of that wallet. The government would have to prove you had both. If you held just the number, there's nothing to say it's YOURS.

- - - Updated - - -

Make reporting of Bitcoin ownership mandatory on your taxes. Now not reporting Bitcoin ownership is tax evasion which is a federal crime.

If you can't regulate the substance, regulate the people.

Again, proving someone owns a bitcoin wallet is nigh impossible.

[Sunseeker]

Again, proving someone owns a bitcoin wallet is nigh impossible.

I'd wager that's more in part to the fact that the government hasn't really bothered to try. And it only takes a few hits on some very wealthy individuals to start making people cough up.

[daenerys]

Any regulation in state will do zero to stop criminal activity, it'll just drive bitcoin activity out of state. It'll just stop those doing the smaller legal transaction, for which it's not worth it to make the transaction out of state.