3 ms·

This, absolutely. I'm actually surprised the government showed their hand so soon. There must be a lot of money in Bitcoin already. The government WANTS people

by jonaf 10y ago

This, absolutely. I'm actually surprised the government showed their hand so soon. There must be a lot of money in Bitcoin already. The government WANTS people to go 100% digital with their capital. It is infinitely easier to track digital money. Bitcoin is something they're against because the anonymity factor. I won't be surprised if we see some legislation to block or inhibit anonymous digital currency. Let's not forget that the US will really want to "own" or be in control of any significant digital currency. Since the US dollar is the world reserve currency, the US wields unprecedented economic power on a global scale. Any currency that has the potential or shows signs of shaking that up will be on the radar for the US govt and the Fed, as controlling currency is the means by which one can control the economic destiny of any nation(s). As we saw with Egypt, for example, several years ago. A simple change in US monetary policy can result in the overthrowing of foreign governments! Interesting side anecdote: A person very close to me purchased Bitcoin on the stock market, but Bank of America froze the account on suspicion / risk of money laundering or general FUD. It isn't clear how much of this was due to the bank or the government, as they are in bed together, but it prevented this person from being able to trade Bitcoin in his account anymore. Sadly, had his account not been frozen, he would have doubled his money. N.B. Citations needed, obviously. Commenting on mobile makes this challenging.

mhluongo 10y ago
> Interesting side anecdote: A person very close to me purchased Bitcoin on the stock market, but Bank of America froze the account on suspicion / risk of money laundering or general FUD. It isn't clear how much of this was due to the bank or the government, as they are in bed together, but it prevented this person from being able to trade Bitcoin in his account anymore. Sadly, had his account not been frozen, he would have doubled his money. I highly doubt your contact bought bitcoin on the stock market, since there hasn't been an ETF launched. They might've bought bitcoin on an bitcoin exchange and had their bank account frozen- it still happens frequently. Banks in the US are still scared to do business with bitcoin folks because they don't want to get undue attention down the line (eg Operation Chokepoint), and banking a potential MSB is more difficult ("know your customer's customers").
- evgen 10y ago
  They might've bought bitcoin on an bitcoin exchange and had their bank account frozen- it still happens frequently. Banks in the US are still scared to do business with bitcoin folks because they don't want to get undue attention down the line Banks also don't want to do business with bitcoin exchanges because this makes it trivial to loot an account over which you have gained unauthorised access. At the moment the bittcoin market consists primarily of people who value privacy over convenience and criminals. Until the former gets larger you should expect any reasonable bank to be extremely way of the latter.
cloakandswagger 10y ago
The downvotes on this comment are confusing. Do people dispute that a cashless society would be a dream come true for the US government & Fed? Or that the US will do pretty much anything to protect its currency hegemony?
- comex 10y ago
  I would dispute that Bitcoin is likely to ever pose a threat to the US 'currency hegemony', at least as a currency in its own right rather than a glorified payment network with prices usually delimited in… US dollars. More practically, I would dispute that the US regulators' concern about Bitcoin has much to do with speculation on its potential to pose such a threat in the future, as opposed to its current suitability for tax evasion and popularity for money laundering, crime, etc. (Please note that I'm not claiming Bitcoin is only or primarily used for those things, only that people who want to do those things often use Bitcoin.) *edited to add tax evasion, which is of course the stated purpose in this instance...
- forgetsusername 10y ago
  >Do people dispute that a cashless society would be a dream come true for the US government & Fed? For all intents and purposes we are already cashless. But again, the government can't force you to use a specific medium for transactions, only what they will accept in taxes. If the system doesn't work for the people, the people will find away around it. That is guaranteed.
rms_returns 10y ago
> This, absolutely. I'm actually surprised the government showed their hand so soon. Does this have anything to do with Trump coming into power?
- chias 10y ago
  Given that Trump has not yet come into power, temporal consistency suggests the answer to your question is "no".
- jerf 10y ago
  Do we have any reason to believe either of Obama or Trump particularly care about this issue? Enough to actually do something about this other than casually brush off a question if asked? It's been obvious this is coming for a long time to anyone who has a realistic view of the IRS.
forgetsusername 10y ago
>Any currency that has the potential or shows signs of shaking that up will be on the radar for the US govt and the Fed, as controlling currency is the means by which one can control the economic destiny of any nation(s). As we saw with Egypt, for example, several years ago. A simple change in US monetary policy can result in the overthrowing of foreign governments! You have your causation reversed. The USD is the global reserve currency because of the power and stability of the United States. People choose to use it, they aren't forced to.
tn13 10y ago
> I'm actually surprised the government showed their hand so soon. Yes and in a very incompetent way. Coinbase will lose all credibility now if they don't challenge this in court. Coinbase is likely to win in the court increasing costs for IRS to do the same thing in future. Secondly, despite the immense coercive power of US government this is a fight they are likely to lose badly in my opinion. The rate of innovation in currencies have reached well beyond the rate at which government can make sense and act on these things.

by jonaf 10y ago

mhluongo 10y ago

> Interesting side anecdote: A person very close to me purchased Bitcoin on the stock market, but Bank of America froze the account on suspicion / risk of money laundering or general FUD. It isn't clear how much of this was due to the bank or the government, as they are in bed together, but it prevented this person from being able to trade Bitcoin in his account anymore. Sadly, had his account not been frozen, he would have doubled his money. I highly doubt your contact bought bitcoin on the stock market, since there hasn't been an ETF launched. They might've bought bitcoin on an bitcoin exchange and had their bank account frozen- it still happens frequently. Banks in the US are still scared to do business with bitcoin folks because they don't want to get undue attention down the line (eg Operation Chokepoint), and banking a potential MSB is more difficult ("know your customer's customers").

evgen 10y ago
They might've bought bitcoin on an bitcoin exchange and had their bank account frozen- it still happens frequently. Banks in the US are still scared to do business with bitcoin folks because they don't want to get undue attention down the line Banks also don't want to do business with bitcoin exchanges because this makes it trivial to loot an account over which you have gained unauthorised access. At the moment the bittcoin market consists primarily of people who value privacy over convenience and criminals. Until the former gets larger you should expect any reasonable bank to be extremely way of the latter.

cloakandswagger 10y ago

The downvotes on this comment are confusing. Do people dispute that a cashless society would be a dream come true for the US government & Fed? Or that the US will do pretty much anything to protect its currency hegemony?

comex 10y ago
I would dispute that Bitcoin is likely to ever pose a threat to the US 'currency hegemony', at least as a currency in its own right rather than a glorified payment network with prices usually delimited in… US dollars. More practically, I would dispute that the US regulators' concern about Bitcoin has much to do with speculation on its potential to pose such a threat in the future, as opposed to its current suitability for tax evasion and popularity for money laundering, crime, etc. (Please note that I'm not claiming Bitcoin is only or primarily used for those things, only that people who want to do those things often use Bitcoin.) *edited to add tax evasion, which is of course the stated purpose in this instance...
forgetsusername 10y ago
>Do people dispute that a cashless society would be a dream come true for the US government & Fed? For all intents and purposes we are already cashless. But again, the government can't force you to use a specific medium for transactions, only what they will accept in taxes. If the system doesn't work for the people, the people will find away around it. That is guaranteed.

rms_returns 10y ago

> This, absolutely. I'm actually surprised the government showed their hand so soon. Does this have anything to do with Trump coming into power?

chias 10y ago
Given that Trump has not yet come into power, temporal consistency suggests the answer to your question is "no".
jerf 10y ago
Do we have any reason to believe either of Obama or Trump particularly care about this issue? Enough to actually do something about this other than casually brush off a question if asked? It's been obvious this is coming for a long time to anyone who has a realistic view of the IRS.

forgetsusername 10y ago

>Any currency that has the potential or shows signs of shaking that up will be on the radar for the US govt and the Fed, as controlling currency is the means by which one can control the economic destiny of any nation(s). As we saw with Egypt, for example, several years ago. A simple change in US monetary policy can result in the overthrowing of foreign governments! You have your causation reversed. The USD is the global reserve currency because of the power and stability of the United States. People choose to use it, they aren't forced to.

tn13 10y ago

> I'm actually surprised the government showed their hand so soon. Yes and in a very incompetent way. Coinbase will lose all credibility now if they don't challenge this in court. Coinbase is likely to win in the court increasing costs for IRS to do the same thing in future. Secondly, despite the immense coercive power of US government this is a fight they are likely to lose badly in my opinion. The rate of innovation in currencies have reached well beyond the rate at which government can make sense and act on these things.