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This proposal is moot. Whether or not it's a good idea, the EU is technically unable to effectively regulate bitcoin. Sure, you can place rules on exchanges, bu

by fdsaaf 10y ago

This proposal is moot. Whether or not it's a good idea, the EU is technically unable to effectively regulate bitcoin. Sure, you can place rules on exchanges, but since anyone with bitcoin can send it to any other person, identified only by one of an infinite number of wallet IDs, the EU will never be able to stop peer-to-peer bitcoin sales.

exelius 10y ago
While true, no company would offer bitcoin transactions without tracking for fear of asset seizure. Governments still have power in the physical world. So if you want Bitcoin (or any cryptocurrency) to have wide legitimate adoption, you have to play by the rules. Governments basically exist for the purpose of enacting economic regulation; so to pretend they don't have a right to do so is a little silly.
- ultramancool 10y ago
  > no company would offer bitcoin transactions without tracking for fear of asset seizure. No company within the EU perhaps, but that doesn't mean you can't just send the money to a russian exchange like BTC-e who really doesn't care what the source is and accepts things like webmoney, libertyreserve, etc. Which are trivial to get into if you know what you're doing.
  - exelius 10y ago
    > things like webmoney, libertyreserve, etc. Which are trivial to get into if you know what you're doing. And have very few protections for consumers, and the percentage of the population that "know what [they]'re doing" is actually pretty low. So yeah, if you're into criminal activity it's still pretty easy to do. But it also means it's easier for law enforcement to watch those avenues of access to catch criminal activity in the act.
    - ultramancool 10y ago
      Bitcoin has literally zero protections for consumers, so if you're trying to buy bitcoin, you're basically already on that boat.
      - shmapf 10y ago
        It's not equivalent. When you own bitcoin it's up to yourself to protect it. In the regulated currencies it's not under your control.
        ultramancool 10y ago
        Sorry? I think we're talking about entirely different things. Basically what I'm saying is that the same people who are interested enough to buy bitcoin are often times the same people who will know how to get it, even if they have to go outside of more traditional and direct means.
  - tmptmp 10y ago
    I have a doubt: say you are a UK citizen, you can send BTC to the Russian exchange but what in return would you get from that russian exchange and how would you evade the UK government? Curious to know. Unless you succeed to make them ship "some products" to you in some other country where BTC is "legitimate" such a transfer would be one-way only.
    - ultramancool 10y ago
      Basically using a proxy product which is easy to exchange on both sides. You can trade in various forms of web currencies like WebMoney, PerfectMoney, etc. The standard sketchy web wallets, you just find a local exchanger for one of those of which there are plenty and then buy and sell PM/WM through them, then send that PM/WM to your exchange. At the point you've got the money into a russian exchange, you're pretty much safe. Just trade it and draw it to your bitcoin wallet.
      - tmptmp 10y ago
        >>At the point you've got the money into a russian exchange, you're pretty much safe. That's not a point that bothers me. I understand that I can easily get my money into a Russian or other such exchange. What bothers me is being a UK citizen, what can I do with that money? >>Just trade it and draw it to your bitcoin wallet. What to trade? How to purchase physical goods? e.g. a TV or something else? Can I at least get my money back in the form of other tradable currency in the UK? I don't see a way to use bitcoins outside the drugs market as far as purchasing physical goods are concerned unless the government approves bitcoins. Please correct me if I am wrong. edit: typo, clarification
  - feklar 10y ago
    Webmoney is Russian paypal in that they seize accounts all the time and demand notarized ID if you move more than a few hundred dollars. Libertyreserve is long gone and the owner(s) in prison. They also seized accounts if you moved over $9k without ID. Using BTC-e is essentially rolling the dice. The Russian/Bulgarian operators can disappear at anytime they like with the entire current volume they are anonymous and also not insured, existing on rep only which doesn't mean very much. They could easily put up a million worth of bitcoin as insurance somewhere held in a trust and refuse to daily trade over that insured amount, that they don't says they plan to just disappear one day.
    - ultramancool 10y ago
      > Libertyreserve is long gone and the owner(s) in prison Sorry, I meant PerfectMoney. Are they at risk of disappearing? Probably, but it's essentially an exchange medium to you. > Using BTC-e is essentially rolling the dice. The Russian/Bulgarian operators can disappear at anytime they like with the entire current volume they are anonymous and also not insured, existing on rep only which doesn't mean very much. They could easily put up a million worth of bitcoin as insurance somewhere held in a trust and refuse to daily trade over that insured amount, that they don't says they plan to just disappear one day. You don't need to have money in the exchange for that long, just move it in and out. Yes, it's a risk, but a fairly small one as long as you don't store money in the exchange long term.
      - charlesdm 10y ago
        > You don't need to have money in the exchange for that long, just move it in and out. Out to where? Your EU bank account? Oh wait..
kybernetikos 10y ago
Just because it's impossible to effectively regulate in all circumstances doesn't mean that it cannot be effectively regulated in many or most circumstances. You can compare this to most laws - people have the capability to break the law, but sufficient enforcement reduces the incentives to do so to the extent that for many classes of crime the number of people who commit them is pretty small. In particular, if all businesses dealing with bitcoins are required to KYC and large transfers are tracked and prosecuted where possible, then there probably would not be a huge amount of anonymous transfer.
- ultramancool 10y ago
  > In particular, if all businesses dealing with bitcoins are required to KYC and large transfers are tracked and prosecuted where possible, then there probably would not be a huge amount of anonymous transfer. Or, more likely, a huge number of bitcoin businesses will go where these laws don't exist and interact with other services to get in. I've managed to avoid any exchange that follows KYC practices with no issue so far.
  - kybernetikos 10y ago
    > I've managed to avoid any exchange that follows KYC practices with no issue so far. That's because no-one has made a serious effort to regulate this so far. I'm not arguing that there wouldn't be grey market bitcoin exchanges operating on a pirate-bay like basis, just that a serious attempt at regulating would have a serious effect on how bitcoin is used. This is even leaving aside ideas where a government could declare particular bitcoins to have been involved in illegal trading and claim the right to confiscate them from anyone under their jurisdiction. I imagine that this would take the same form as money laundering regulation, which while not perfect still has a massive effect on how easy it is to launder money.
    - ultramancool 10y ago
      > That's because no-one has made a serious effort to regulate this so far. Some places certainly have, it's just that you'd basically need a global effort between many countries to do so to have any real effect. Until then most of these regulations are just a joke.
patrickaljord 10y ago
> the EU is technically unable to effectively regulate bitcoin That didn't stop them to start the war on drugs and spending trillions on it.
feklar 10y ago
They would go after p2p sales obviously starting with localbitcoins which is operated out of an EU country. For IRC/forum trades they would do periodic crackdowns posing as phony buyers and arresting/fining the seller to scare away enough casuals that only a handful continue to offer it, effectively shutting down any threat of mass bitcoin adoption to their tax cartel.
ChemicalWarfare 10y ago
Bitcoin is not a closed ecosystem. There are multiple touch points between bitcoin and fiat and those can be (and already are to some extent) regulated.

by fdsaaf 10y ago

exelius 10y ago

While true, no company would offer bitcoin transactions without tracking for fear of asset seizure. Governments still have power in the physical world. So if you want Bitcoin (or any cryptocurrency) to have wide legitimate adoption, you have to play by the rules. Governments basically exist for the purpose of enacting economic regulation; so to pretend they don't have a right to do so is a little silly.

ultramancool 10y ago
> no company would offer bitcoin transactions without tracking for fear of asset seizure. No company within the EU perhaps, but that doesn't mean you can't just send the money to a russian exchange like BTC-e who really doesn't care what the source is and accepts things like webmoney, libertyreserve, etc. Which are trivial to get into if you know what you're doing.
- exelius 10y ago
  > things like webmoney, libertyreserve, etc. Which are trivial to get into if you know what you're doing. And have very few protections for consumers, and the percentage of the population that "know what [they]'re doing" is actually pretty low. So yeah, if you're into criminal activity it's still pretty easy to do. But it also means it's easier for law enforcement to watch those avenues of access to catch criminal activity in the act.
  - ultramancool 10y ago
    Bitcoin has literally zero protections for consumers, so if you're trying to buy bitcoin, you're basically already on that boat.
    - shmapf 10y ago
      It's not equivalent. When you own bitcoin it's up to yourself to protect it. In the regulated currencies it's not under your control.
      - ultramancool 10y ago
        Sorry? I think we're talking about entirely different things. Basically what I'm saying is that the same people who are interested enough to buy bitcoin are often times the same people who will know how to get it, even if they have to go outside of more traditional and direct means.
- tmptmp 10y ago
  I have a doubt: say you are a UK citizen, you can send BTC to the Russian exchange but what in return would you get from that russian exchange and how would you evade the UK government? Curious to know. Unless you succeed to make them ship "some products" to you in some other country where BTC is "legitimate" such a transfer would be one-way only.
  - ultramancool 10y ago
    Basically using a proxy product which is easy to exchange on both sides. You can trade in various forms of web currencies like WebMoney, PerfectMoney, etc. The standard sketchy web wallets, you just find a local exchanger for one of those of which there are plenty and then buy and sell PM/WM through them, then send that PM/WM to your exchange. At the point you've got the money into a russian exchange, you're pretty much safe. Just trade it and draw it to your bitcoin wallet.
    - tmptmp 10y ago
      >>At the point you've got the money into a russian exchange, you're pretty much safe. That's not a point that bothers me. I understand that I can easily get my money into a Russian or other such exchange. What bothers me is being a UK citizen, what can I do with that money? >>Just trade it and draw it to your bitcoin wallet. What to trade? How to purchase physical goods? e.g. a TV or something else? Can I at least get my money back in the form of other tradable currency in the UK? I don't see a way to use bitcoins outside the drugs market as far as purchasing physical goods are concerned unless the government approves bitcoins. Please correct me if I am wrong. edit: typo, clarification
- feklar 10y ago
  Webmoney is Russian paypal in that they seize accounts all the time and demand notarized ID if you move more than a few hundred dollars. Libertyreserve is long gone and the owner(s) in prison. They also seized accounts if you moved over $9k without ID. Using BTC-e is essentially rolling the dice. The Russian/Bulgarian operators can disappear at anytime they like with the entire current volume they are anonymous and also not insured, existing on rep only which doesn't mean very much. They could easily put up a million worth of bitcoin as insurance somewhere held in a trust and refuse to daily trade over that insured amount, that they don't says they plan to just disappear one day.
  - ultramancool 10y ago
    > Libertyreserve is long gone and the owner(s) in prison Sorry, I meant PerfectMoney. Are they at risk of disappearing? Probably, but it's essentially an exchange medium to you. > Using BTC-e is essentially rolling the dice. The Russian/Bulgarian operators can disappear at anytime they like with the entire current volume they are anonymous and also not insured, existing on rep only which doesn't mean very much. They could easily put up a million worth of bitcoin as insurance somewhere held in a trust and refuse to daily trade over that insured amount, that they don't says they plan to just disappear one day. You don't need to have money in the exchange for that long, just move it in and out. Yes, it's a risk, but a fairly small one as long as you don't store money in the exchange long term.
    - charlesdm 10y ago
      > You don't need to have money in the exchange for that long, just move it in and out. Out to where? Your EU bank account? Oh wait..

kybernetikos 10y ago

Just because it's impossible to effectively regulate in all circumstances doesn't mean that it cannot be effectively regulated in many or most circumstances. You can compare this to most laws - people have the capability to break the law, but sufficient enforcement reduces the incentives to do so to the extent that for many classes of crime the number of people who commit them is pretty small. In particular, if all businesses dealing with bitcoins are required to KYC and large transfers are tracked and prosecuted where possible, then there probably would not be a huge amount of anonymous transfer.

ultramancool 10y ago
> In particular, if all businesses dealing with bitcoins are required to KYC and large transfers are tracked and prosecuted where possible, then there probably would not be a huge amount of anonymous transfer. Or, more likely, a huge number of bitcoin businesses will go where these laws don't exist and interact with other services to get in. I've managed to avoid any exchange that follows KYC practices with no issue so far.
- kybernetikos 10y ago
  > I've managed to avoid any exchange that follows KYC practices with no issue so far. That's because no-one has made a serious effort to regulate this so far. I'm not arguing that there wouldn't be grey market bitcoin exchanges operating on a pirate-bay like basis, just that a serious attempt at regulating would have a serious effect on how bitcoin is used. This is even leaving aside ideas where a government could declare particular bitcoins to have been involved in illegal trading and claim the right to confiscate them from anyone under their jurisdiction. I imagine that this would take the same form as money laundering regulation, which while not perfect still has a massive effect on how easy it is to launder money.
  - ultramancool 10y ago
    > That's because no-one has made a serious effort to regulate this so far. Some places certainly have, it's just that you'd basically need a global effort between many countries to do so to have any real effect. Until then most of these regulations are just a joke.

patrickaljord 10y ago

> the EU is technically unable to effectively regulate bitcoin That didn't stop them to start the war on drugs and spending trillions on it.

feklar 10y ago

They would go after p2p sales obviously starting with localbitcoins which is operated out of an EU country. For IRC/forum trades they would do periodic crackdowns posing as phony buyers and arresting/fining the seller to scare away enough casuals that only a handful continue to offer it, effectively shutting down any threat of mass bitcoin adoption to their tax cartel.

ChemicalWarfare 10y ago

Bitcoin is not a closed ecosystem. There are multiple touch points between bitcoin and fiat and those can be (and already are to some extent) regulated.