7 ms·

Bitcoin Comes Under Senate Scrutiny

32 points by cdvonstinkpot 13y ago

DigitalSea 13y ago
Uh, oh. This will either be really good for Bitcoin or really bad. I am thinking the Government are going to try and clamp down on Bitcoin and do their best to get their share of the pie through taxes and whatnot. An unregulated currency has surely got a few Federal Reserve members and those with vested interests in currency on the edge of their seats and on the attack. Government backing is the last hurdle for Bitcoin. If some rules are put into place that allow its use in the US alone, it'll set a precedent for other countries to follow-suit. It's apparent the Government don't care about how Bitcoin is being used, all they care about is getting their share of the money which at present is zero.
- yeukhon 13y ago
  Sure and also money laundering and underground economy.
  - dr_doom 13y ago
    I'm pretty sure that's what the hearings are going to focus on. They may also throw in a little 'anyone can anonymously fund terrorists!' considering the sessions were called by the Committee on Homeland Security.
    - yeukhon 13y ago
      Yeah. I also wonder if in the future people will use bitcoin to keep their cash since Swiss banks are not as independent as they used to be anymore.
    - rhizome 13y ago
      They may also throw in a little 'anyone can anonymously fund terrorists!' "...just like Peter King."
- narrator 13y ago
  You bitcoin guys think you can push buttons on your computer and code around the system. So naive. Sorry to be a pessimist, but they can just say anyone transferring bitcoin to another party without going through a KYC compliant intermediary is money laundering and then send the swat team out to whatever ip they can track down via NSA whatever. Game. Set. Match. Banks win as usual, all done. They'll take it down just like Pirate Bay, etc. Can someone tell me how people think the cryptonerds can win here? I'll be over here munching on my popcorn thank you.
  - wernah 13y ago
    Piratebay isn't down?
  - drewblaisdell 13y ago
    They'll take it down just like Pirate Bay, etc. I think you have unintentionally predicted exactly what will happen.
    - vyrotek 13y ago
      Sure, you're not going to completely squash it but it will then be considered a "dirty" service and only be used for illegal activities. No U.S. business will ever touch it again.
      - dublinben 13y ago
        The recent shutdown of Liberty Reserve, another digital currency favored by criminals, shows the extent to which the U.S authorities are willing to go in cases like this. Nowhere on earth is safe if you are running/facilitating a multi-billion dollar money laundering operation.
        ensignavenger 13y ago
        Unless your a large bank "too big to fail"... Or give any serious punishment to for money laundering.
cinquemb 13y ago
I'm excited to see the costly boondoggle that will come from this, because we all know how well the SEC is at regulating centrally controlled currencies.
- vkou 13y ago
  Considering that the world economy did not completely implode in 2008, I think we could do far worse.
  - cinquemb 13y ago
    I wasn't really referring to the world economy. Whether it is from dealing legally in bitcoins or undergoing HFT transactions where exchanges can selectively declare self-help, or new financial tools/instruments, the people with the ability to leverage technology in ways where there will be little to no technical capabilities to enforce regulation (due to it's newness) will have more incentive to work outside of governments. By the time government has caught up to the problem, people would have innovated and pushing the bar higher. But on the global economy, a lot of emerging economies have been hit hard, and the schizo of the market on taper/no-taper utterings tells me this book is still open.
kdot 13y ago
I love how there is no 'one' person in charge of bitcoin, who are they planning on summoning.
- nwh 13y ago
  None or the developers are anonymous, so one imagines they will be summoned. At least some of them are US based. Even if they don't own or control anything, they'll still be blamed.
  - prophetx10 13y ago
    This is just a shakedown to get some dollars for the upcoming election season.
oscilloscope 13y ago
My favorite recent twist of events is that the US government now has the Bitcoin address with the largest balance: DPR's seized coins held by the FBI. https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4...
- ninetax 13y ago
  Largest known balance right? Satoshi might have some unknown amount stashed away...
  - nknighthb 13y ago
    The location of all Bitcoins, and therefore the address with the most Bitcoins, is public knowledge. This is an inherent property of the system. If anybody tells you Bitcoin is anonymous, they haven't the first clue how Bitcoin works. Run away as quickly as possible, for they are dangerously clueless.
    - ketralnis 13y ago
      While blanket statements like that sound true on their face, I think it's safe to say that an unknown person may have a large number of coins spread over a lot of wallets. Especially people trying to hide their total balances, including people using tumblers.
      - zwily 13y ago
        The original assertion was about a single address having the most coins, which is true.
      - ZoF 13y ago
        His statement doesn't just "sound true on [it's] face"... It also happens to be completely true. He never made any assertion or even alluded to the idea that someone couldn't spread balances over multiple addresses... You're statement is an unnecessary unveiling of a ridiculously obvious possibility which comes across as braggadocios and condescending.
AmVess 13y ago
Article states, "The hearings will be held by the Senate Committee on Homeland Security and Government Affairs and by a subpart of the Senate Banking Committee, the aides said." And then it continues, "As with all emerging technologies, the federal government must make sure that potential threats and risks are dealt with swiftly; however, we must also ensure that rash or uninformed actions don’t stifle a potentially valuable technology." While I cannot say sooth how exactly this will end, but I have a feeling it will end in tears. And by tears, I mean primarily our tears. I mockingly envision TSA agents shaking me down at an airport for undeclared bitcoins and then absconding with my hardware until they can determine that I'm not illegally transporting undeclared bitcoins across state borders. I'd mock this notion, but at this point in time, I know better.
dil8 13y ago
This is more about the government trying get its share of the pie and control and monitor bitcoin. Inherent in the philosophy of bitcoin is a society where no central authority can control the means of exchange. I think the more control the governments puts around bitcoin the more people will be driven to alternative crypto-currencies...
- hackinthebochs 13y ago
  Why would government want a piece of the bitcoin pie? They already have the entire pie in terms of control of the money supply. If anything bitcoin is becoming an existential threat to one of the main pillars of government power. I predict terrible things for bitcoin going forward.
clarkm 13y ago
And apparently Obama has also been asking about Bitcoin recently. > The president, whose most important job is surely to protect the integrity of the monetary system, smugly asked Schmidt if Bitcoin, one of many growing challenges to currency hegemony, was anything he had to worry about. http://www.usatoday.com/story/money/columnist/wolff/2013/10/27/ceos-are-often-clueless-about-technology/3182203/ http://www.usatoday.com/story/money/columnist/wolff/2013/10/...
- applecore 13y ago
  Interestingly, Eric Schmidt had no idea what Bitcoin was until Julian Assange first explained it to him in June 2011. http://wikileaks.org/Transcript-Meeting-Assange-Schmidt?nocache#688 http://wikileaks.org/Transcript-Meeting-Assange-Schmidt?noca...
brasky 13y ago
I welcome all the USA has to throw at btc. It will only make it stronger in the long run and further erode any credibility the us gov has.
- dublinben 13y ago
  Inversely, it will only weaken Bitcoin, and erode any credibility it has.
  - wernah 13y ago
    I would say it has stood the test of time for a few years now. Every attempt thus far (directly or otherwise) has strengthened it economically. The price is now around $250usd, doubled in the last month since silk road was closed down.
    - chii 13y ago
      i don't think you can say the test if time when it had only been a few years.
- ars 13y ago
  Talk about underestimating. If the USA wanted to, it could easily destroy bitcoin, they have more than enough computing power. It might not be legal for them to do so, but that's their own self imposed limitation, not inability.
  - wyager 13y ago
    >they have more than enough computing power. No, they don't. Not even close. What they do have is enough money to print more ASICs than the Bitcoin community has.
  - MacsHeadroom 13y ago
    >they have more than enough computing power. All the servers, personal computers AND super computers in the world COMBINED do not share enough computational power to put a dent in the Bitcoin network thanks to the widespread use of specialized Bitcoin mining hardware, i.e. ASIC Bitcoin miners.
ROFISH 13y ago
Stupid question expecting stupid answers: Is there a reason why Bitcoin can't just be treated and regulated like any other foreign currency?
- dil8 13y ago
  I think the anonymity of Bitcoin makes it tougher to regulate when compared to other currencies which generally pass through regulated intermediaries.
  - vyrotek 13y ago
    Honest question. Isn't giving someone a $20 bill for something more anonymous than BitCoin?
    - dil8 13y ago
      Yes, cash is more anonymous. Though, large deposits and withdrawals of cash receive more scrutiny.
    - MacsHeadroom 13y ago
      Yes, but there are downsides to cash which Bitcoin solves. For example, crossing country borders with more than $2k-$5k in cash is a felony many places. Bitcoin, however, is as blind to borders as TCP/IP.
avh_on1 13y ago
"we must also ensure that rash or uninformed actions don’t stifle a potentially valuable technology" I love how they judge the utility of bitcoin based on monetary value.
- MacsHeadroom 13y ago
  "Value" alone doesn't necessarily imply "monetary value."

32 points by cdvonstinkpot 13y ago

Uh, oh. This will either be really good for Bitcoin or really bad. I am thinking the Government are going to try and clamp down on Bitcoin and do their best to get their share of the pie through taxes and whatnot. An unregulated currency has surely got a few Federal Reserve members and those with vested interests in currency on the edge of their seats and on the attack. Government backing is the last hurdle for Bitcoin. If some rules are put into place that allow its use in the US alone, it'll set a precedent for other countries to follow-suit. It's apparent the Government don't care about how Bitcoin is being used, all they care about is getting their share of the money which at present is zero.

yeukhon 13y ago
Sure and also money laundering and underground economy.
- dr_doom 13y ago
  I'm pretty sure that's what the hearings are going to focus on. They may also throw in a little 'anyone can anonymously fund terrorists!' considering the sessions were called by the Committee on Homeland Security.
  - yeukhon 13y ago
    Yeah. I also wonder if in the future people will use bitcoin to keep their cash since Swiss banks are not as independent as they used to be anymore.
  - rhizome 13y ago
    They may also throw in a little 'anyone can anonymously fund terrorists!' "...just like Peter King."
narrator 13y ago
You bitcoin guys think you can push buttons on your computer and code around the system. So naive. Sorry to be a pessimist, but they can just say anyone transferring bitcoin to another party without going through a KYC compliant intermediary is money laundering and then send the swat team out to whatever ip they can track down via NSA whatever. Game. Set. Match. Banks win as usual, all done. They'll take it down just like Pirate Bay, etc. Can someone tell me how people think the cryptonerds can win here? I'll be over here munching on my popcorn thank you.
- wernah 13y ago
  Piratebay isn't down?
- drewblaisdell 13y ago
  They'll take it down just like Pirate Bay, etc. I think you have unintentionally predicted exactly what will happen.
  - vyrotek 13y ago
    Sure, you're not going to completely squash it but it will then be considered a "dirty" service and only be used for illegal activities. No U.S. business will ever touch it again.
    - dublinben 13y ago
      The recent shutdown of Liberty Reserve, another digital currency favored by criminals, shows the extent to which the U.S authorities are willing to go in cases like this. Nowhere on earth is safe if you are running/facilitating a multi-billion dollar money laundering operation.
      - ensignavenger 13y ago
        Unless your a large bank "too big to fail"... Or give any serious punishment to for money laundering.

cinquemb 13y ago

I'm excited to see the costly boondoggle that will come from this, because we all know how well the SEC is at regulating centrally controlled currencies.

vkou 13y ago
Considering that the world economy did not completely implode in 2008, I think we could do far worse.
- cinquemb 13y ago
  I wasn't really referring to the world economy. Whether it is from dealing legally in bitcoins or undergoing HFT transactions where exchanges can selectively declare self-help, or new financial tools/instruments, the people with the ability to leverage technology in ways where there will be little to no technical capabilities to enforce regulation (due to it's newness) will have more incentive to work outside of governments. By the time government has caught up to the problem, people would have innovated and pushing the bar higher. But on the global economy, a lot of emerging economies have been hit hard, and the schizo of the market on taper/no-taper utterings tells me this book is still open.

kdot 13y ago

I love how there is no 'one' person in charge of bitcoin, who are they planning on summoning.

nwh 13y ago
None or the developers are anonymous, so one imagines they will be summoned. At least some of them are US based. Even if they don't own or control anything, they'll still be blamed.
- prophetx10 13y ago
  This is just a shakedown to get some dollars for the upcoming election season.

oscilloscope 13y ago

My favorite recent twist of events is that the US government now has the Bitcoin address with the largest balance: DPR's seized coins held by the FBI. https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4...

ninetax 13y ago
Largest known balance right? Satoshi might have some unknown amount stashed away...
- nknighthb 13y ago
  The location of all Bitcoins, and therefore the address with the most Bitcoins, is public knowledge. This is an inherent property of the system. If anybody tells you Bitcoin is anonymous, they haven't the first clue how Bitcoin works. Run away as quickly as possible, for they are dangerously clueless.
  - ketralnis 13y ago
    While blanket statements like that sound true on their face, I think it's safe to say that an unknown person may have a large number of coins spread over a lot of wallets. Especially people trying to hide their total balances, including people using tumblers.
    - zwily 13y ago
      The original assertion was about a single address having the most coins, which is true.
    - ZoF 13y ago
      His statement doesn't just "sound true on [it's] face"... It also happens to be completely true. He never made any assertion or even alluded to the idea that someone couldn't spread balances over multiple addresses... You're statement is an unnecessary unveiling of a ridiculously obvious possibility which comes across as braggadocios and condescending.

AmVess 13y ago

Article states, "The hearings will be held by the Senate Committee on Homeland Security and Government Affairs and by a subpart of the Senate Banking Committee, the aides said." And then it continues, "As with all emerging technologies, the federal government must make sure that potential threats and risks are dealt with swiftly; however, we must also ensure that rash or uninformed actions don’t stifle a potentially valuable technology." While I cannot say sooth how exactly this will end, but I have a feeling it will end in tears. And by tears, I mean primarily our tears. I mockingly envision TSA agents shaking me down at an airport for undeclared bitcoins and then absconding with my hardware until they can determine that I'm not illegally transporting undeclared bitcoins across state borders. I'd mock this notion, but at this point in time, I know better.

dil8 13y ago

This is more about the government trying get its share of the pie and control and monitor bitcoin. Inherent in the philosophy of bitcoin is a society where no central authority can control the means of exchange. I think the more control the governments puts around bitcoin the more people will be driven to alternative crypto-currencies...

hackinthebochs 13y ago
Why would government want a piece of the bitcoin pie? They already have the entire pie in terms of control of the money supply. If anything bitcoin is becoming an existential threat to one of the main pillars of government power. I predict terrible things for bitcoin going forward.

clarkm 13y ago

And apparently Obama has also been asking about Bitcoin recently. > The president, whose most important job is surely to protect the integrity of the monetary system, smugly asked Schmidt if Bitcoin, one of many growing challenges to currency hegemony, was anything he had to worry about. http://www.usatoday.com/story/money/columnist/wolff/2013/10/27/ceos-are-often-clueless-about-technology/3182203/ http://www.usatoday.com/story/money/columnist/wolff/2013/10/...

applecore 13y ago
Interestingly, Eric Schmidt had no idea what Bitcoin was until Julian Assange first explained it to him in June 2011. http://wikileaks.org/Transcript-Meeting-Assange-Schmidt?nocache#688 http://wikileaks.org/Transcript-Meeting-Assange-Schmidt?noca...

brasky 13y ago

I welcome all the USA has to throw at btc. It will only make it stronger in the long run and further erode any credibility the us gov has.

dublinben 13y ago
Inversely, it will only weaken Bitcoin, and erode any credibility it has.
- wernah 13y ago
  I would say it has stood the test of time for a few years now. Every attempt thus far (directly or otherwise) has strengthened it economically. The price is now around $250usd, doubled in the last month since silk road was closed down.
  - chii 13y ago
    i don't think you can say the test if time when it had only been a few years.
ars 13y ago
Talk about underestimating. If the USA wanted to, it could easily destroy bitcoin, they have more than enough computing power. It might not be legal for them to do so, but that's their own self imposed limitation, not inability.
- wyager 13y ago
  >they have more than enough computing power. No, they don't. Not even close. What they do have is enough money to print more ASICs than the Bitcoin community has.
- MacsHeadroom 13y ago
  >they have more than enough computing power. All the servers, personal computers AND super computers in the world COMBINED do not share enough computational power to put a dent in the Bitcoin network thanks to the widespread use of specialized Bitcoin mining hardware, i.e. ASIC Bitcoin miners.

ROFISH 13y ago

Stupid question expecting stupid answers: Is there a reason why Bitcoin can't just be treated and regulated like any other foreign currency?

dil8 13y ago
I think the anonymity of Bitcoin makes it tougher to regulate when compared to other currencies which generally pass through regulated intermediaries.
- vyrotek 13y ago
  Honest question. Isn't giving someone a $20 bill for something more anonymous than BitCoin?
  - dil8 13y ago
    Yes, cash is more anonymous. Though, large deposits and withdrawals of cash receive more scrutiny.
  - MacsHeadroom 13y ago
    Yes, but there are downsides to cash which Bitcoin solves. For example, crossing country borders with more than $2k-$5k in cash is a felony many places. Bitcoin, however, is as blind to borders as TCP/IP.

avh_on1 13y ago

"we must also ensure that rash or uninformed actions don’t stifle a potentially valuable technology" I love how they judge the utility of bitcoin based on monetary value.

MacsHeadroom 13y ago
"Value" alone doesn't necessarily imply "monetary value."