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I don't understand the comment either. It's not like terrorist groups are currently un-funded. Cash is still king around illegal activities of all kinds. Why i

I don't understand the comment either. It's not like terrorist groups are currently un-funded. Cash is still king around illegal activities of all kinds. Why is using bitcoin for illegal activity any different than untraceable cash?

zitterbewegung 9y ago
One of the big pluses to bitcoin is the fact that you can move large amounts of money relatively quickly instead of relying on banks.
- iamthirsty 9y ago
  Illegal operations would obviously not rely on banks.
  - infecto 9y ago
    I think you would surprise yourself with that comment. Illegal operations do indeed rely heavily on banks.
    - knz 9y ago
      > Illegal operations do indeed rely heavily on banks. https://www.reuters.com/article/us-hsbc-probe/hsbc-became-bank-to-drug-cartels-pays-big-for-lapses-idUSBRE8BA05M20121212 https://www.reuters.com/article/us-hsbc-probe/hsbc-became-ba... As an example for anyone not familiar with these types of stories.
    - iamthirsty 9y ago
      When I bought drugs in high school, it was usually in cash. Sure, I concede multi-million dollar operations may have bank help, but I don't think you're thinking about the full picture.
  - dashundchen 9y ago
    HSBC and Wachovia were recently involved in the laundering of hundreds of billions of dollars for Mexico's biggest drug cartel (and pretty much every executive involved came out unscathed once it was revealed). https://www.theguardian.com/commentisfree/2015/feb/15/hsbc-has-form-mexico-laundered-drug-money https://www.theguardian.com/commentisfree/2015/feb/15/hsbc-h...
  - Danihan 9y ago
    Don't be so sure...
- nxsynonym 9y ago
  is that different than cash - especially surrounding illegally obtained cash? I'm not saying it's not a risk - I just don't see it as inherently more risky than currently viable currencies.
  - mikeash 9y ago
    One big difference is that cash is too popular to ban entirely. If a major attack were somehow linked to Bitcoin, the US government could make the whole thing illegal. We all know that wouldn't do much to actually stop terrorist attacks, but it would be a major problem for a wealth manager trying to operate within the law, and being ineffective certainly hasn't stopped the US government from passing dumb anti-terror laws in the past.
dajohnson89 9y ago
To play devil's advocate: cash (fiat in general) is often traceable to bank accounts, wire transfers, ATM CCTV, credit card records, marked bank notes, etc. While it's still v possible to track a bitcoin transaction from recipient to sender, there are countermeasures with varying degrees of efficacy. At any rate, it's not the traceability of X per se that matters, but rather the stigma, and given how many billions of $ in illegal activity bitcoin has been used for, and the high-profile cases of Silk Road etc, it's very easy to see that scenario (i.e., the US Congress + interested lobbyists cracking down on Crypto) happening.
iamthirsty 9y ago
Your points are valid, but I think you're misunderstanding his point. If a terrorist attack happened that was funded via Bitcoin, and could've only been funded via Bitcoin (including a false-flag) the governments would throw the book at it. This could be terrorist groups sending BTC to legit US citizens who purchase things (like weapons) legally and then use them in an attack, &c.
- mikeash 9y ago
  The "could've only been funded via Bitcoin" part isn't even necessary. The US government is kind of crazy when it comes to terrorism. Any connection between Bitcoin and terrorism that gets a lot of public attention is likely to result in major legal problems. It doesn't matter whether or not the fear is well founded or whether Bitcoin's role was incidental. Look at how much pressure there is to crack down on encryption in general, and that would have far wider-reaching consequences than regulating a cryptocurrency only a tiny percentage of people actually use.
- oolaf 9y ago
  That bit about the false flag has me thinking. Has that possibility been seriously discussed?
JamesBarney 9y ago
He's not arguing that Bitcoin would be responsible for the terrorist action. He's arguing that hysteria would hold Bitcoin accountable. And this would create pressure to pass legislation that would crack down on it. And deserved or not Bitcoin is perceived differently than cash. Its seen as something nefarious, and strange. Where cash is something familiar.
- ftlio 9y ago
  The irony of course being that the US has even bombed USD cash reserves of ISIS. The USD network funds plenty of unscrupulous acts. It's a shame that people won't be able to see that equivalency though. When regulators come after Bitcoin, it will be from a conflict of interest, not a moral high ground.
TimPC 9y ago
I'm going to take the cynical view here. The issue is that there are rules around movement and use of cash that are clear that banks can follow to say 'not my fault' when terrorists use cash. No one knows what's illegal and legal for the movement of bitcoins. No one knows what compliance they need. How does investing in a currency where the regulations are likely to dramatically and suddenly increase in certain unpredictable ways play out? Can regulatory changes cause a huge amount of volatility and downward pressure?

zitterbewegung 9y ago

One of the big pluses to bitcoin is the fact that you can move large amounts of money relatively quickly instead of relying on banks.

iamthirsty 9y ago
Illegal operations would obviously not rely on banks.
- infecto 9y ago
  I think you would surprise yourself with that comment. Illegal operations do indeed rely heavily on banks.
  - knz 9y ago
    > Illegal operations do indeed rely heavily on banks. https://www.reuters.com/article/us-hsbc-probe/hsbc-became-bank-to-drug-cartels-pays-big-for-lapses-idUSBRE8BA05M20121212 https://www.reuters.com/article/us-hsbc-probe/hsbc-became-ba... As an example for anyone not familiar with these types of stories.
  - iamthirsty 9y ago
    When I bought drugs in high school, it was usually in cash. Sure, I concede multi-million dollar operations may have bank help, but I don't think you're thinking about the full picture.
- dashundchen 9y ago
  HSBC and Wachovia were recently involved in the laundering of hundreds of billions of dollars for Mexico's biggest drug cartel (and pretty much every executive involved came out unscathed once it was revealed). https://www.theguardian.com/commentisfree/2015/feb/15/hsbc-has-form-mexico-laundered-drug-money https://www.theguardian.com/commentisfree/2015/feb/15/hsbc-h...
- Danihan 9y ago
  Don't be so sure...
nxsynonym 9y ago
is that different than cash - especially surrounding illegally obtained cash? I'm not saying it's not a risk - I just don't see it as inherently more risky than currently viable currencies.
- mikeash 9y ago
  One big difference is that cash is too popular to ban entirely. If a major attack were somehow linked to Bitcoin, the US government could make the whole thing illegal. We all know that wouldn't do much to actually stop terrorist attacks, but it would be a major problem for a wealth manager trying to operate within the law, and being ineffective certainly hasn't stopped the US government from passing dumb anti-terror laws in the past.

dajohnson89 9y ago

To play devil's advocate: cash (fiat in general) is often traceable to bank accounts, wire transfers, ATM CCTV, credit card records, marked bank notes, etc. While it's still v possible to track a bitcoin transaction from recipient to sender, there are countermeasures with varying degrees of efficacy. At any rate, it's not the traceability of X per se that matters, but rather the stigma, and given how many billions of $ in illegal activity bitcoin has been used for, and the high-profile cases of Silk Road etc, it's very easy to see that scenario (i.e., the US Congress + interested lobbyists cracking down on Crypto) happening.

iamthirsty 9y ago

Your points are valid, but I think you're misunderstanding his point. If a terrorist attack happened that was funded via Bitcoin, and could've only been funded via Bitcoin (including a false-flag) the governments would throw the book at it. This could be terrorist groups sending BTC to legit US citizens who purchase things (like weapons) legally and then use them in an attack, &c.

mikeash 9y ago
The "could've only been funded via Bitcoin" part isn't even necessary. The US government is kind of crazy when it comes to terrorism. Any connection between Bitcoin and terrorism that gets a lot of public attention is likely to result in major legal problems. It doesn't matter whether or not the fear is well founded or whether Bitcoin's role was incidental. Look at how much pressure there is to crack down on encryption in general, and that would have far wider-reaching consequences than regulating a cryptocurrency only a tiny percentage of people actually use.
oolaf 9y ago
That bit about the false flag has me thinking. Has that possibility been seriously discussed?

JamesBarney 9y ago

He's not arguing that Bitcoin would be responsible for the terrorist action. He's arguing that hysteria would hold Bitcoin accountable. And this would create pressure to pass legislation that would crack down on it. And deserved or not Bitcoin is perceived differently than cash. Its seen as something nefarious, and strange. Where cash is something familiar.

ftlio 9y ago
The irony of course being that the US has even bombed USD cash reserves of ISIS. The USD network funds plenty of unscrupulous acts. It's a shame that people won't be able to see that equivalency though. When regulators come after Bitcoin, it will be from a conflict of interest, not a moral high ground.

TimPC 9y ago

I'm going to take the cynical view here. The issue is that there are rules around movement and use of cash that are clear that banks can follow to say 'not my fault' when terrorists use cash. No one knows what's illegal and legal for the movement of bitcoins. No one knows what compliance they need. How does investing in a currency where the regulations are likely to dramatically and suddenly increase in certain unpredictable ways play out? Can regulatory changes cause a huge amount of volatility and downward pressure?