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"Previous attempts at parallel online digital currencies, like e-Gold and Liberty Reserve, were shut down by the US government before even making it to $10 bill

by Lammy 6y ago

"Previous attempts at parallel online digital currencies, like e-Gold and Liberty Reserve, were shut down by the US government before even making it to $10 billion in market capitalization. Bitcoin now has a market cap north of $1 trillion." I wonder if the different treatment is due to Bitcoin coming of age in the Obama era instead of the GWB era like those other examples? Forgive my naive question as I'm not into crypto, but is it even technically possible for them to shut down Bitcoin if they wanted to? I lived through the P2P file sharing era in the 2000s where ISPs were forced to block access to various things at the behest of the RIAA/MPAA, so it seems like they could just go after the P2P blockchain in similar ways if they cared. No consensus; no Bitcoin, yeah? If that were the case then I also wouldn't trust Tor to provide any privacy from the US government considering NRL created it. My assumption is that reality is probably somewhere in the middle, where the existence of Bitcoin doesn't harm the government's interests too much while also convincing the occasional egotistical giraffe that it would be safe to stick their neck out.

jariel 6y ago
If it turned out that BTC was a primary vector of money laundering and means to pay for illegal stuff, the US could declare it illegal which would crash it instantly. EU and China probably and everyone else probably would as well if that were the case, and then it would be wiped out. Specific kinds of regulations might kill it as well - though most regulations probably validate it, there could be certain things that make it impossible to survive. Maybe some kind of regulation regarding asset size + value certification, or something about the security of the BTC numbers. Or possibly something about disclosure - since BTC allows you to keep 10 Billion in your drawer at home ... it creates a problem similar to offshore financing. Musk was maybe smart to buy BTC because he's the kind of guy who can give it hype and 'cred' ... but either 1) he doesn't realize what it actually is and is unknowingly pushing Ponzi or 2) he knows what he's doing and happy to take money from dupes and rubes. I suggest it's the former, as everything Musk says leads me to believe he has never opened a finance text. The paradoxes of great leader: their giant blind spots outside the realms of their interest. Gates, Musk, Jobs, Bezos, Soros ... they can be big visionary in some areas and insufferable fools in others.
- Lammy 6y ago
  > If it turned out that BTC was a primary vector of money laundering and means to pay for illegal stuff, the US could declare it illegal Comedy option: maybe they also need it to pay for illegal stuff v(._. )v
- jobigoud 6y ago
  Regarding your last paragraph, he co founded paypal so this is very much in the realm of his interests.
  - jariel 6y ago
    You'd think that, wouldn't you, but surprisingly doing payment processing doesn't necessarily involve any fundamental understanding of the nature of currency, how it's backed, Fed operations, how they related to the Treasury. Elon makes a lot of questionable statements about BTC and currency. A few weeks ago: "Having some bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P 500 company ... When fiat currency has negative real interest, only a fool wouldn’t look elsewhere. Bitcoin is almost as bs as fiat money. The key word is 'almost.'" His concerns about the funny money nature of the Fed etc. are reasonable - no doubt, but at the same time, almost everything he says about BTC undermines his credibility on those things. BTC is not a currency or a 'store of value' just because a bunch of people say it is. It's just list of numbers people are trading because they want to. The Fed has problems, but BTC is a populist fiction.
    - not_knuth 6y ago
      Is a "populist fiction" not precisely what any currency, that is traded in place of tangible things, is?
      - jariel 6y ago
        Unless you think your government, your constitution, you financial system are a 'populist fiction' then no. USD is legal tender, a contract, backed by assets (US TBills), with a ton of laws, rules and regulations. BTC is digital Monopoly Money.
herendin2 6y ago
>I wonder if the different treatment is due to Bitcoin coming of age in the Obama era instead of the GWB era like those other examples? >is it even technically possible for them to shut down Bitcoin if they wanted to? You've almost answered your own question there. It's not more difficult to shut down due to a change in government behavior, it's difficult to shut down because it's highly decentralized, unlike earlier digital currencies
- Lammy 6y ago
  Yes, but then my second point is how that never seemed to stop them in the past.

by Lammy 6y ago

jariel 6y ago

If it turned out that BTC was a primary vector of money laundering and means to pay for illegal stuff, the US could declare it illegal which would crash it instantly. EU and China probably and everyone else probably would as well if that were the case, and then it would be wiped out. Specific kinds of regulations might kill it as well - though most regulations probably validate it, there could be certain things that make it impossible to survive. Maybe some kind of regulation regarding asset size + value certification, or something about the security of the BTC numbers. Or possibly something about disclosure - since BTC allows you to keep 10 Billion in your drawer at home ... it creates a problem similar to offshore financing. Musk was maybe smart to buy BTC because he's the kind of guy who can give it hype and 'cred' ... but either 1) he doesn't realize what it actually is and is unknowingly pushing Ponzi or 2) he knows what he's doing and happy to take money from dupes and rubes. I suggest it's the former, as everything Musk says leads me to believe he has never opened a finance text. The paradoxes of great leader: their giant blind spots outside the realms of their interest. Gates, Musk, Jobs, Bezos, Soros ... they can be big visionary in some areas and insufferable fools in others.

Lammy 6y ago
> If it turned out that BTC was a primary vector of money laundering and means to pay for illegal stuff, the US could declare it illegal Comedy option: maybe they also need it to pay for illegal stuff v(._. )v
jobigoud 6y ago
Regarding your last paragraph, he co founded paypal so this is very much in the realm of his interests.
- jariel 6y ago
  You'd think that, wouldn't you, but surprisingly doing payment processing doesn't necessarily involve any fundamental understanding of the nature of currency, how it's backed, Fed operations, how they related to the Treasury. Elon makes a lot of questionable statements about BTC and currency. A few weeks ago: "Having some bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P 500 company ... When fiat currency has negative real interest, only a fool wouldn’t look elsewhere. Bitcoin is almost as bs as fiat money. The key word is 'almost.'" His concerns about the funny money nature of the Fed etc. are reasonable - no doubt, but at the same time, almost everything he says about BTC undermines his credibility on those things. BTC is not a currency or a 'store of value' just because a bunch of people say it is. It's just list of numbers people are trading because they want to. The Fed has problems, but BTC is a populist fiction.
  - not_knuth 6y ago
    Is a "populist fiction" not precisely what any currency, that is traded in place of tangible things, is?
    - jariel 6y ago
      Unless you think your government, your constitution, you financial system are a 'populist fiction' then no. USD is legal tender, a contract, backed by assets (US TBills), with a ton of laws, rules and regulations. BTC is digital Monopoly Money.

herendin2 6y ago

>I wonder if the different treatment is due to Bitcoin coming of age in the Obama era instead of the GWB era like those other examples? >is it even technically possible for them to shut down Bitcoin if they wanted to? You've almost answered your own question there. It's not more difficult to shut down due to a change in government behavior, it's difficult to shut down because it's highly decentralized, unlike earlier digital currencies

Lammy 6y ago
Yes, but then my second point is how that never seemed to stop them in the past.