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The number 1 reason why bitcoin will fail: Silk Road (et al) have handed legislators all the ammunition they need to go after it with a vengeance. All of what's

The number 1 reason why bitcoin will fail: Silk Road (et al) have handed legislators all the ammunition they need to go after it with a vengeance. All of what's coming next has happened before. Think e-gold, act II. Simply put there are no incentives (and massive disincentives, both perceived and real) for any government to tolerate financial transactions in anything other than fiat currency. The more popular the service becomes the more frenetic legislative and enforcement activity will become to stamp it out. http://en.wikipedia.org/wiki/E-gold http://en.wikipedia.org/wiki/E-gold

puredemo 15y ago
It'll still thrive in all the countries that don't legislate against it, and in the black markets of those which do.
- knieveltech 15y ago
  That's one possible outcome. Another being bitcoin traffic provokes government-mandated deep packet inspection/filtering or other further intrusions into online privacy.
  - puredemo 15y ago
    It sounds like that might spark the first real "cyber wars." I'm not sure most governments would survive it. http://www.youtube.com/watch?v=7g0pi4J8auQ http://www.youtube.com/watch?v=7g0pi4J8auQ
deleted 15y ago
[deleted]
pnathan 15y ago
I support bitcoin and think it is a Good Way Forward, but I agree categorically with your critique. It is sufficiently disruptive that I expect the major players in governments will legislate it out of existence.
- hcho 15y ago
  They might legislate against it, but will they be able to enforce the legislation?
  - sorbus 15y ago
    Throw a non-negotiable 1-year imprisonment into whatever penalty they enact for using bitcoin. Then imprison the thousand most prolific users (business that accept it, people who publicly exchange it, etc.), and continue doing sweeps of anyone who admits to using bitcoin for the next few years. Suddenly, the only people who are willing to use bitcoin are those who are already using it for illegal things. Keep in mind that they don't need to kill the entire system, they just need to make it too risky for the average person to even consider using. That is sufficient to make it fail.
    - pnathan 15y ago
      Exactly. Add to that a propaganda stream, "Only Evil du jour will use Bitcoin. Are you Evil? No! Then you won't use Bitcoin either!"
      - aupajo 15y ago
        I heard Hitler uses Bitcoins.
    - tabsa 15y ago
      I'm sorry but this is silly. What you are suggesting has been already tried in prohibition of alcohol, in war on drugs and now in a more civilized way in a "war on car downloaders". The main outcome was that black markets flourished. If people want what Bitcoin provides, they will get it in one way or another.
      - sorbus 15y ago
        > If people want what Bitcoin provides. That's the key point. There is a huge demand for alcohol, for drugs, and for cheap/free content. In the first two cases, this means that there is real profit to be had in selling it, and the illegality means that prices can be hugely inflated due to risk. For free content - "car downloaders" is a really nice way to describe it - I haven't yet figured out the economic motives, but it seems to be a mixture of selling ads (for the people running the sites), sharing/giving back to the community (especially on private, invitation-only trackers), and just because of how easy it is. Is it possible to make money or karma off of bitcoins in a similar way? Well, you can sell them. If you have bitcoins, you can make a profit of them that way - you can sell them for above value, or charge for the service as well as the coins. You can also buy them, hoping that the price increases, which ends up as selling them. So, answer this: if bitcoins were made illegal, what monetary incentive would there be to use them? Their price certainly wouldn't go up - it would plummet as all the legitimate traders tried to get out.
paisible 15y ago
Isn't that what the distributed system aims to solve in the first place ? If they can't shut bittorrent down, how can they shut bitcoins ? They can crack down on the e-currency exchangers, but only those that operate within their jurisdiction. Would like to know if anyone has concrete examples of how they would go about doing this.
- knieveltech 15y ago
  Sure, and distributed file sharing aimed to protect file sharers from the kind of crap the RIAA has been dishing out since it's inception. I would expect governments first to limit the viability of the currency, possibly through legislation (fines, jail time) aimed at businesses operating within their borders. Get caught dealing in bitcoins, go to jail. If that doesn't dampen enthusiam I would expect the next phase to target ISP's. Mandated traffic monitoring and/or blocking, etc. Distributed networks don't mean shit when the connectivity medium isn't available.

puredemo 15y ago

It'll still thrive in all the countries that don't legislate against it, and in the black markets of those which do.

knieveltech 15y ago
That's one possible outcome. Another being bitcoin traffic provokes government-mandated deep packet inspection/filtering or other further intrusions into online privacy.
- puredemo 15y ago
  It sounds like that might spark the first real "cyber wars." I'm not sure most governments would survive it. http://www.youtube.com/watch?v=7g0pi4J8auQ http://www.youtube.com/watch?v=7g0pi4J8auQ

deleted 15y ago

[deleted]

pnathan 15y ago

I support bitcoin and think it is a Good Way Forward, but I agree categorically with your critique. It is sufficiently disruptive that I expect the major players in governments will legislate it out of existence.

hcho 15y ago
They might legislate against it, but will they be able to enforce the legislation?
- sorbus 15y ago
  Throw a non-negotiable 1-year imprisonment into whatever penalty they enact for using bitcoin. Then imprison the thousand most prolific users (business that accept it, people who publicly exchange it, etc.), and continue doing sweeps of anyone who admits to using bitcoin for the next few years. Suddenly, the only people who are willing to use bitcoin are those who are already using it for illegal things. Keep in mind that they don't need to kill the entire system, they just need to make it too risky for the average person to even consider using. That is sufficient to make it fail.
  - pnathan 15y ago
    Exactly. Add to that a propaganda stream, "Only Evil du jour will use Bitcoin. Are you Evil? No! Then you won't use Bitcoin either!"
    - aupajo 15y ago
      I heard Hitler uses Bitcoins.
  - tabsa 15y ago
    I'm sorry but this is silly. What you are suggesting has been already tried in prohibition of alcohol, in war on drugs and now in a more civilized way in a "war on car downloaders". The main outcome was that black markets flourished. If people want what Bitcoin provides, they will get it in one way or another.
    - sorbus 15y ago
      > If people want what Bitcoin provides. That's the key point. There is a huge demand for alcohol, for drugs, and for cheap/free content. In the first two cases, this means that there is real profit to be had in selling it, and the illegality means that prices can be hugely inflated due to risk. For free content - "car downloaders" is a really nice way to describe it - I haven't yet figured out the economic motives, but it seems to be a mixture of selling ads (for the people running the sites), sharing/giving back to the community (especially on private, invitation-only trackers), and just because of how easy it is. Is it possible to make money or karma off of bitcoins in a similar way? Well, you can sell them. If you have bitcoins, you can make a profit of them that way - you can sell them for above value, or charge for the service as well as the coins. You can also buy them, hoping that the price increases, which ends up as selling them. So, answer this: if bitcoins were made illegal, what monetary incentive would there be to use them? Their price certainly wouldn't go up - it would plummet as all the legitimate traders tried to get out.

paisible 15y ago

Isn't that what the distributed system aims to solve in the first place ? If they can't shut bittorrent down, how can they shut bitcoins ? They can crack down on the e-currency exchangers, but only those that operate within their jurisdiction. Would like to know if anyone has concrete examples of how they would go about doing this.

knieveltech 15y ago
Sure, and distributed file sharing aimed to protect file sharers from the kind of crap the RIAA has been dishing out since it's inception. I would expect governments first to limit the viability of the currency, possibly through legislation (fines, jail time) aimed at businesses operating within their borders. Get caught dealing in bitcoins, go to jail. If that doesn't dampen enthusiam I would expect the next phase to target ISP's. Mandated traffic monitoring and/or blocking, etc. Distributed networks don't mean shit when the connectivity medium isn't available.