
Bitcoin Comes Under Senate Scrutiny - cdvonstinkpot
http://blogs.wsj.com/washwire/2013/11/05/bitcoin-comes-under-senate-scrutiny/
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oscilloscope
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/1FfmbHfnpaZjKFvyi1okTjJJusN4...](https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH)

~~~
ninetax
Largest _known_ balance right? Satoshi might have some unknown amount stashed
away...

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nknighthb
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
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.

~~~
ZoF
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.

~~~
ketralnis
It's a question of audiences.

To an expert on bitcoin, the description of "the address with the most
Bitcoins" is self-explanatory and, yes, has one well-defined answer that it
can be determined from the block-chain alone. If you're this person, I can
understand why you think I'm being pedantic, and I'm sorry if I came off that
way.

But someone who says "If anybody tells you Bitcoin is anonymous, they haven't
the first clue how Bitcoin works" isn't talking to an expert on bitcoin.
They're talking to someone that they fear may not know enough to avoid being
easily swayed by the kind of inexact language that a non-expert doesn't even
know that they're looking for. They're talking to the exact kind of audience
that _doesn 't_ know that "person" and "address" are not interchangable

This person may then go on to claim, based on this evidence, that (1) no
anonymity can ever be obtained by bitcoin (which isn't true in theory or in
practise for the reasons I mention) and (2) that we know "who" (as in person,
not address) has all of the bitcoins. But that's just not true, and it's a
really, really important detail to someone that makes policy decisions, or
that wants to decide if or how to use the technology.

It's the same problem with equating an IP address with a human. _You_ may use
exact language when you talk about these things, and _you_ may understand that
when someone offhandedly points at an IP address on a diagram and says "...but
this guy over here..." that "guy" doesn't refer to an actual human being. But
you aren't any of the grandparents to this conversation, nor are you the
hypothetical uneducated observer (to whom I mean no ill will; we all are,
given the right conversation). Most importantly, you're not ninetax, who is
clearly referring to a person and not to an address, nor are you nknighthb,
who is clearly referring to the notion of an address rather than a person.

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DigitalSea
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.

~~~
narrator
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.

~~~
drewblaisdell
_They 'll take it down just like Pirate Bay, etc._

I think you have unintentionally predicted exactly what will happen.

~~~
vyrotek
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
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
Unless your a large bank "too big to fail"... Or give any serious punishment
to for money laundering.

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AmVess
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.

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clarkm
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/...](http://www.usatoday.com/story/money/columnist/wolff/2013/10/27/ceos-
are-often-clueless-about-technology/3182203/)

~~~
applecore
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?noca...](http://wikileaks.org/Transcript-Meeting-Assange-
Schmidt?nocache#688)

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dil8
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
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.

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brasky
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.

~~~
ars
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
>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.

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

~~~
nwh
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
This is just a shakedown to get some dollars for the upcoming election season.

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avh_on1
"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
"Value" alone doesn't necessarily imply "monetary value."

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cinquemb
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
Considering that the world economy did not completely implode in 2008, I think
we could do far worse.

~~~
cinquemb
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.

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

~~~
dil8
I think the anonymity of Bitcoin makes it tougher to regulate when compared to
other currencies which generally pass through regulated intermediaries.

~~~
vyrotek
Honest question. Isn't giving someone a $20 bill for something more anonymous
than BitCoin?

~~~
MacsHeadroom
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.

