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Back in 2011, there were much lesser threats to Bitcoin than what we have now. Most people did not take Bitcoin seriously until now. Most people did not want to

by smdz 9y ago

Back in 2011, there were much lesser threats to Bitcoin than what we have now. Most people did not take Bitcoin seriously until now. Most people did not want to buy it because they were scared/skeptical about it (a perfect time to invest). Recently many novices who don't understand cryptocurrencies have invested in it - And very likely that fueled the recent rally upto 10k and well beyond that. Its not a good time to invest or buy bitcoins now. Plus the transaction costs have become significant large to ignore. As of now (near 2018), comparing these bureaucratic threats to that of just a p2p networks is just not correct and may be naive. (It was different in 2011 when this was not well recognized). What if governments disallow converting Bitcoin to real currency? Why would a govt not use points like - Taxes, Money laundering and terrorism - to prevent bitcoin? Or may be they allow it with some kind of significant bitcoin-conversion-tax?

sitepodmatt 9y ago
It doesn't seem out of realm of possibility that KYC/AML/whatever will be enhanced for cryptocurrency to/from fiat exchanges, and I don't think cross border nature will exempt to (i.e. exchanging fiat to crypto on a foreign exchange) - look at non-EU companies charging VAT for EU customers for example. Take Monero for example, the potential privacy coin, some people think that it will be next Coinbase currrency (I think this is a pump though as they grasp onto any hints like it's solid) and that they will fully satisfy regulator requirement by Monero Coinbase users withdrawing to their own Monero wallet and providing Coinbase the viewing key so Coinbase can say to regulator it went from JohnB to JohnB. I have a hard time believing this will last long and I doubt Coinbase do to, regulations are a moving target and loopholes will get closed fast or at least eventually. Drop fiat at the edge though and then it's a different game, but what do people start from? mining? mechnical turk tasks? some global airdrop for every human on the planet - is this was even remotely possible that would be interesting.
AlexCoventry 9y ago
> What if governments disallow converting Bitcoin to real currency? The real threat is that the security guarantees for the distributed consensus on the blockchain history make economic assumptions which don't apply to sovereign actors. If the US decides to assemble enough ASICs to construct bitcoin double spends, it can just do it. If China decides to expropriate the mining hardware in its jurisdiction and use it to construct double spends, it can just do it. Investing in cryptocurrency is like trading the national currency of a very promising but poorly defended young nation. There's a lot of money to be made, but the bottom will fall out if they're invaded.
- danielbarla 9y ago
  Surely double spends would trigger a collapse of the currency? Other than intentionally causing such a collapse, why would any party want to do this?
  - AlexCoventry 9y ago
    They're a huge nuisance to nation states, which derive great power from the fact that most economic activity under their jurisdictions is denominated in a token they can generate as much of as they wish, and for which they can generate as much demand as they wish through taxation.
St_Alfonzo 9y ago
> What if governments disallow converting Bitcoin to real currency? Why would a govt not use points like - Taxes, Money laundering and terrorism - to prevent bitcoin? Or may be they allow it with some kind of significant bitcoin-conversion-tax? A big tax for converting Bitcoin to real currency could cause that bitcoin would be used as a currency. If it's too expensive to convert my BTC, I would just use them to pay/buy things. I agree, that playing the "Money Laundering" or "Terrorism" card would be an effective option for the govt.
- not_kurt_godel 9y ago
  Good luck using your deflationary "currency" with ridiculous transaction fees and glacial transaction rate that isn't accepted anywhere to actually live your day-to-day life.
  - St_Alfonzo 9y ago
    This was meant as an utopian near future result, which of course is only possible with some optimizations to the bitcoin software. I don't believe in the current version Bitcoin.
cbstory 9y ago
I am in India and am surprised how big btc here. Ex: I know 50 year old people have no connection to the tech scene who have 1000 dollars in btc, yet have no idea how it works. They think it's digital gold that will give them free money. It makes me kind if sad. If/when btc crashes it's people like this who are going to get hurt.
- yread 9y ago
  Don't feel sad for them, if they made millions they also woudn't share it with you
- coderdude 9y ago
  It's kind of sad when people "invest" money they really should not be spending on a scam, but it's on them. Such people probably have a lifetime track record of making similarly poor decisions with their money.

by smdz 9y ago

sitepodmatt 9y ago

It doesn't seem out of realm of possibility that KYC/AML/whatever will be enhanced for cryptocurrency to/from fiat exchanges, and I don't think cross border nature will exempt to (i.e. exchanging fiat to crypto on a foreign exchange) - look at non-EU companies charging VAT for EU customers for example. Take Monero for example, the potential privacy coin, some people think that it will be next Coinbase currrency (I think this is a pump though as they grasp onto any hints like it's solid) and that they will fully satisfy regulator requirement by Monero Coinbase users withdrawing to their own Monero wallet and providing Coinbase the viewing key so Coinbase can say to regulator it went from JohnB to JohnB. I have a hard time believing this will last long and I doubt Coinbase do to, regulations are a moving target and loopholes will get closed fast or at least eventually. Drop fiat at the edge though and then it's a different game, but what do people start from? mining? mechnical turk tasks? some global airdrop for every human on the planet - is this was even remotely possible that would be interesting.

AlexCoventry 9y ago

> What if governments disallow converting Bitcoin to real currency? The real threat is that the security guarantees for the distributed consensus on the blockchain history make economic assumptions which don't apply to sovereign actors. If the US decides to assemble enough ASICs to construct bitcoin double spends, it can just do it. If China decides to expropriate the mining hardware in its jurisdiction and use it to construct double spends, it can just do it. Investing in cryptocurrency is like trading the national currency of a very promising but poorly defended young nation. There's a lot of money to be made, but the bottom will fall out if they're invaded.

danielbarla 9y ago
Surely double spends would trigger a collapse of the currency? Other than intentionally causing such a collapse, why would any party want to do this?
- AlexCoventry 9y ago
  They're a huge nuisance to nation states, which derive great power from the fact that most economic activity under their jurisdictions is denominated in a token they can generate as much of as they wish, and for which they can generate as much demand as they wish through taxation.

St_Alfonzo 9y ago

> What if governments disallow converting Bitcoin to real currency? Why would a govt not use points like - Taxes, Money laundering and terrorism - to prevent bitcoin? Or may be they allow it with some kind of significant bitcoin-conversion-tax? A big tax for converting Bitcoin to real currency could cause that bitcoin would be used as a currency. If it's too expensive to convert my BTC, I would just use them to pay/buy things. I agree, that playing the "Money Laundering" or "Terrorism" card would be an effective option for the govt.

not_kurt_godel 9y ago
Good luck using your deflationary "currency" with ridiculous transaction fees and glacial transaction rate that isn't accepted anywhere to actually live your day-to-day life.
- St_Alfonzo 9y ago
  This was meant as an utopian near future result, which of course is only possible with some optimizations to the bitcoin software. I don't believe in the current version Bitcoin.

cbstory 9y ago

I am in India and am surprised how big btc here. Ex: I know 50 year old people have no connection to the tech scene who have 1000 dollars in btc, yet have no idea how it works. They think it's digital gold that will give them free money. It makes me kind if sad. If/when btc crashes it's people like this who are going to get hurt.

yread 9y ago
Don't feel sad for them, if they made millions they also woudn't share it with you
coderdude 9y ago
It's kind of sad when people "invest" money they really should not be spending on a scam, but it's on them. Such people probably have a lifetime track record of making similarly poor decisions with their money.