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You can't uninvent Bitcoin but you can certainly make it illegal, making it all but useless for drug trade or money laundering. Nobody needs a currency that you

You can't uninvent Bitcoin but you can certainly make it illegal, making it all but useless for drug trade or money laundering. Nobody needs a currency that you can't exchange for, you know, real currency that you can buy real things with. So although the government doesn't have the power to eliminate Bitcoin, they do have the power to make it useless. I don't think they will though, because guess who is using it for bribes and money laundering?

mwint 5y ago
If you can’t trade BTC for USD, you’ll trade it for Yen, and then trade for USD. Some country will want to cash in on the demand for their currency, and will leave it legal to exchange.
AnthonyMouse 5y ago
Making it illegal doesn't affect its utility for illegal activity. Criminals already break the law. It would cause a one-time decline in value but that only matters to speculators. The value would still be non-zero because it's global and there exist places where it isn't illegal. Even if it was somehow illegal everywhere, the value still wouldn't be zero because of black markets. The drug user uses it to buy drugs, the drug dealer uses it to buy guns, the gun runner uses it to buy stolen art, the fence uses it to buy stolen goods from petty thieves who use it to buy drugs. Black markets would also exist to exchange it for cash or ordinary commodities so that someone else could get it to buy drugs/guns/art/whatever. And it has utility over using physical cash or gemstones or bullion in that you can transfer it over the internet.
- Retric 5y ago
  Making it illegal makes it vastly less useful for illegal purposes. Legitimate transactions provide cover, it’s like the difference between a sniper in a forest or an empty parking lot. If your factory selling a truck full of AK-47’s you want to actually be able to buy steel to make more AK-47’s. If bitcoin’s illegal you now need to find a buyer for the guns and another buyer for the bitcoins.
  - AnthonyMouse 5y ago
    The steel mill was probably going to want dollars instead of Bitcoin regardless, so the only difference is that they do the trade for dollars on a black market exchange. This is likely to get folded into the money laundering process anyway -- the Bitcoin goes to unspecified offshore location to get turned into dollars that come back as a clean payment for "consulting services" or what have you. There is no need for additional "cover" at that point because the illicit transaction is already illicit. If someone just took that Bitcoin and bought a house, the IRS would have questions. It would have to be laundered first. The output of the money laundering process is clean dollars regardless of whether the input is illegal because of the illegal source or illegal because of the illegal source and currency.
    - Retric 5y ago
      Do you expect the guy laundering money to accept bitcoins without charging extra? Because if the guy selling bitcoins takes ~10% from the AK-47 buyer and the guy laundering money also takes his ~10% cut for using bitcoins on top of his X% cut for laundering money, suddenly it’s starting to look really unappealing. The real appeal of bitcoin for illegal purposes is it’s effectively a poor but really cheap way to launder money. Try and deposit even 1 million in cold hard cash and the banking system throws up red flags, liquidate 1 million in bitcoin and that looks significantly more legit at least on the surface. It doesn’t help if you’re under investigation, but then again it’s cheap.
      - AnthonyMouse 5y ago
        > Do you expect the guy laundering money to accept bitcoins without charging extra? That's the entire purpose of using them. Someone who has a million dollars in physical cash either needs to get someone local to launder it, which might be hard to find or require paying them a thick margin, or they have to find a way to ship a huge amount of physical cash to the place it's being laundered and risk it being seized at border crossings etc. Someone who has a million dollars in Bitcoin can buy money laundering as a service over the internet from the lowest bidder who has a good reputation. The Bitcoin gets transferred to some place with favorable banking rules, gets liquidated there where it's either not illegal or the local authorities are corrupt, and it comes back as dollars. Since it's possible to do it over the internet, you have competition from all over the world including some favorable jurisdictions, so the margins get smaller than they would be if you had to find someone locally.

mwint 5y ago

If you can’t trade BTC for USD, you’ll trade it for Yen, and then trade for USD. Some country will want to cash in on the demand for their currency, and will leave it legal to exchange.

AnthonyMouse 5y ago

Making it illegal doesn't affect its utility for illegal activity. Criminals already break the law. It would cause a one-time decline in value but that only matters to speculators. The value would still be non-zero because it's global and there exist places where it isn't illegal. Even if it was somehow illegal everywhere, the value still wouldn't be zero because of black markets. The drug user uses it to buy drugs, the drug dealer uses it to buy guns, the gun runner uses it to buy stolen art, the fence uses it to buy stolen goods from petty thieves who use it to buy drugs. Black markets would also exist to exchange it for cash or ordinary commodities so that someone else could get it to buy drugs/guns/art/whatever. And it has utility over using physical cash or gemstones or bullion in that you can transfer it over the internet.

Retric 5y ago
Making it illegal makes it vastly less useful for illegal purposes. Legitimate transactions provide cover, it’s like the difference between a sniper in a forest or an empty parking lot. If your factory selling a truck full of AK-47’s you want to actually be able to buy steel to make more AK-47’s. If bitcoin’s illegal you now need to find a buyer for the guns and another buyer for the bitcoins.
- AnthonyMouse 5y ago
  The steel mill was probably going to want dollars instead of Bitcoin regardless, so the only difference is that they do the trade for dollars on a black market exchange. This is likely to get folded into the money laundering process anyway -- the Bitcoin goes to unspecified offshore location to get turned into dollars that come back as a clean payment for "consulting services" or what have you. There is no need for additional "cover" at that point because the illicit transaction is already illicit. If someone just took that Bitcoin and bought a house, the IRS would have questions. It would have to be laundered first. The output of the money laundering process is clean dollars regardless of whether the input is illegal because of the illegal source or illegal because of the illegal source and currency.
  - Retric 5y ago
    Do you expect the guy laundering money to accept bitcoins without charging extra? Because if the guy selling bitcoins takes ~10% from the AK-47 buyer and the guy laundering money also takes his ~10% cut for using bitcoins on top of his X% cut for laundering money, suddenly it’s starting to look really unappealing. The real appeal of bitcoin for illegal purposes is it’s effectively a poor but really cheap way to launder money. Try and deposit even 1 million in cold hard cash and the banking system throws up red flags, liquidate 1 million in bitcoin and that looks significantly more legit at least on the surface. It doesn’t help if you’re under investigation, but then again it’s cheap.
    - AnthonyMouse 5y ago
      > Do you expect the guy laundering money to accept bitcoins without charging extra? That's the entire purpose of using them. Someone who has a million dollars in physical cash either needs to get someone local to launder it, which might be hard to find or require paying them a thick margin, or they have to find a way to ship a huge amount of physical cash to the place it's being laundered and risk it being seized at border crossings etc. Someone who has a million dollars in Bitcoin can buy money laundering as a service over the internet from the lowest bidder who has a good reputation. The Bitcoin gets transferred to some place with favorable banking rules, gets liquidated there where it's either not illegal or the local authorities are corrupt, and it comes back as dollars. Since it's possible to do it over the internet, you have competition from all over the world including some favorable jurisdictions, so the margins get smaller than they would be if you had to find someone locally.