
US Treasury Guidance on Virtual Currencies (aka Bitcoins) - rmah
http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html
======
thinkcomp
In other words, if you run a Bitcoin exchange in the United States and you
don't have 47 money transmission licenses, you'd better call your lawyer.

If you own Bitcoins, you should prepare for the very real possibility that one
day, depending on arbitrary state or USDOJ enforcement actions, you may never
be able to convert your Bitcoins back to dollars.

For a sense of how backwards our financial regulators are, and how poorly they
understand the issues at hand, take a look for yourself:

<https://www.facecash.com/legal/brown.html#document27>

Actual quotes: "We don't regulate technology," and "We don't treat every
applicant exactly the same." —Teveia Barnes, Commissioner, California
Department of Financial Institutions

(This was last week in Sacramento.)

Everyone should also familiarize themselves with 18 U.S.C § 1960:

<http://www.plainsite.org/laws/index.html?id=14426>

It's a federal crime to break your state's money transmission law that
operates independently of, but is likely to be affected by, FinCEN's federal
guidance.

~~~
acabal
I don't dispute any of that, but in an ideal Bitcoin economy people wouldn't
_need_ to convert to USD. Obviously the Bitcoin economy isn't at that point
yet and people need the USD to peg "value" to what a Bitcoin is. But
eventually, if Bitcoin becomes more widely accepted, shouldn't the economy
settle on to what 1BTC is "worth" regardless of what other currencies are
doing?

~~~
betterunix
"in an ideal Bitcoin economy people wouldn't need to convert to USD"

So how do you think they will pay their taxes? How do you think businesses
will repay their loans? Do you really think the US government will accept
Bitcoin tax payments, or that banks would be stupid enough to issue loans in a
deflationary currency that conveys no legal protections?

Bitcoin's only real value in its ability to ultimately be sold for a fiat
currency.

~~~
steve19
Its real value is being a medium of exchange. For example selling X widgets
for Y bitcoins and exchange those for Z months use of a VPN.

There are many, many ways people who wish to deal in bitcoins can find a way
to convert them into USD. Even if that means buying prooducts from overseas
using bitcoin, importing them, then selling the products on ebay for USD.

~~~
betterunix
"Its real value is being a medium of exchange"

Value is the result of supply and demand. What is the demand for a medium of
exchange? Why not just use monopoly money, or acorns, or lumps of clay?

For that matter, why do US citizens not use CAN instead of USD? What drives
the citizens of a country to use the currency issued or authorized by that
country's government?

"For example selling X widgets for Y bitcoins and exchange those for Z months
use of a VPN."

Yeah, and what do you think the VPN provider is paying its bills with? When
the government says, "Pay us the tax on your energy use," what does the VPN
provider reply with? "Here are some Bitcoins?" Unless the government is
accepting Bitcoin for tax payments -- which would effectively turn Bitcoin
into a fiat currency -- your service provider is either going to need a way to
convert their Bitcoin currency into some other currency, or they will require
that you pay them with something other than Bitcoin.

~~~
argonaut
1\. Your economics are wrong. Value is _not_ the market price. Value is
subjective; the value of something to a given person is the maximum price the
person is willing to pay. Value is not the same for each person.

2\. BTC's unique feature is the instantaneity and anonymity of transactions.

~~~
betterunix
"Value is not the market price"

Who said it was?

"the value of something to a given person is the maximum price the person is
willing to pay"

Which is dependent on the supply and demand of that "something."

"BTC's unique feature is the instantaneity and anonymity of transactions."

"Instant" in the "10-30 minutes" sense, and anonymous in the "you can be
tracked" sense...

~~~
argonaut
Endoself is correct.

That's the problem with HN. It is clear when someone's arguments have no
foundation in modern economic theory _and_ practice, yet these arguments get
thrown around with a false sense of certitude. I cited the _textbook
definition_ for "value," and yet you argue that it's dependent on supply and
demand, which ignored the fact that the definition of value that I cited is
precisely what makes up demand.

Person A is willing to pay $200 for a watch. Yet the market price of that
watch is $20. Just because that person saved $180 does not mean that value of
the watch to person A suddenly and magically fell by $180. Clearly this person
found $200 worth of utility in that watch, or else s/he wouldn't have been
willing to pay for it at that price.

> "Instant" in the "10-30 minutes" sense, and anonymous in the "you can be
> tracked" sense...

Now your arguments are focusing on semantics.

EDITS: clarity and less snark.

~~~
betterunix
"I cited the textbook definition for "value," and yet you argue that it's
dependent on supply and demand, which ignored the fact that the definition of
value that I cited is precisely what makes up demand."

If your textbook is telling you that value is equivalent to demand, perhaps
you need a new textbook. It is easy to illustrate the effect supply has on
value with the following thought experiment:

    
    
      If I told you that I was charging $10 to step inside my house and breath some air, would you be willing to pay?  Now imagine a world where breathable air is a scarce resource, and there are no other sources of breathable air for miles around my house; would you be willing to pay in that case?

~~~
argonaut
You cannot seriously bandy about the concepts of supply, demand, and market
(equilibrium) price, concepts which form parts of basic economic theory, and
then throw out the standard economic definition of value.

> perhaps you need a new textbook.

That clause is utterly devoid of any logical content.

Your thought experiment demonstrates nothing except the basic concept of
"people will buy whatever is cheapest." Let's say fresh air is worth $1
million to me. If you were charging $10, I would not pay because I can get it
for free and gain a "consumer surplus" of $1 million. That does not change the
fact that I would be willing to pay $1 million if air were a scarce resource.

~~~
betterunix
"You cannot seriously bandy about the concepts of supply, demand, and market
(equilibrium) price, concepts which form parts of basic economic theory, and
then throw out the standard economic definition of value."

There is no "standard" definition of "value:"

[http://www.ehow.com/info_7904133_difference-between-
classica...](http://www.ehow.com/info_7904133_difference-between-classical-
neoclassical-economics.html)
[http://www.econlib.org/library/Enc1/NeoclassicalEconomics.ht...](http://www.econlib.org/library/Enc1/NeoclassicalEconomics.html)

Your claim that value is nothing more than "demand" is not universally
accepted among economists. I did not throw out any definitions; all I did was
point out that value is affected by both supply and demand, which is a
straightforward neoclassical interpretation.

~~~
argonaut
Firstly, that eHow article you cite is hardly reputable, and it basically
contradicts itself. It states that in neoclassical economics, value is a
function of supply AND demand, yet it goes on to state that value = utility.
That value=utility argument is what is I am trying to say. Utility has nothing
to do with supply.

The other article only prove my point. Neoclassical economics is the
"mainstream," "standard" economic theory, for both conservative and liberal
economists alike. It mentions classical economics only for the sake of
historical context (it was prevalent in the 19th century but is now outdated).

You don't even properly state my argument. I never said value = demand. I said
value is what makes up demand. That is an important distinction, and it is one
that makes sense (if you don't value something, you don't demand it. If you
value something, you do demand it.)

Lastly, you ignored my response to your thought experiment.

------
URSpider94
Let's pop back to the big picture here. One of the functions of the Treasury
Department is to prevent money laundering. And, by prevent, I mean make
onerous for large amounts of money. Like millions or tens of millions or
hundreds of millions of dollars. Think Mexican drug cartel money.

One way to do that is to log all exchange or transmission transactions above a
certain size -- which is what licensed money changers and transmitters have to
do. You're not prohibited from performing these transactions, you just have to
give them your name and SSN or Taxpayer ID.

Sure, there are ways around this, like buying a million rubber duckies in
China, then shipping them to the US and selling them at carnivals. But -again-
try to import a million of anything, and US Customs will want to know your
name and SSN.

If you're talking about changing $100 or even $1,000 into BTC, the government
doesn't really care. You might think, can't the criminals just split their
transactions into small enough chunks that they can avoid the law altogether?
Sure, maybe they could (and certainly they do) -- but at some point, having to
conduct a thousand individual exchange transactions to move a million bucks
starts to get onerous, and is also likely to leave a data trail -- there will
be correlations somewhere.

It's never going to be impossible to exchange BTC for USD untraceably. The
point here, which should come as no surprise, is that the government intends
to make it impossible to exchange large amounts of value anonymously without
it being annoying, time-consuming and costly.

~~~
belorn
The US has not gone very far yet with their anti money laundering program. In
Sweden, we have got to the point where one can only withdraw a maximum amount
of $200/$1000 a day (it depend on the ATM, where common one is the $200
version). There is also a hard limit of $2000 a week.

Alternative, one can "request" a larger withdraw from the bank which means two
consecutive physical visits to a designated bank office, with a week between,
and during designated hours (10-14). At the bank, they may ask you questions
regarding the nature of the money withdraw, and is allowed to deny you if they
feel the answer is unsatisfactory.

As a side note, an ID is also always required for any money transfer no matter
transaction size. They also removed the option for SMS payments (it was
considered too anonymous). The effect from this have been that the most common
form of donations to red-cross and the likes has dropped with 90%. Last, any
transaction (all sizes) is logged and shared internationally with EU and US.

~~~
gbark
Please provide sources for these claims (and prove me wrong!). I'm quite sure
none of them are actual law as compared to company policies. The ATM limit is
surely because of personal security reasons (but it can be raised if you
notice the bank), and the SMS payments being removed because the
communications providers dont want to be scrutinised by the government under
"financial service providers law".

~~~
belorn
Each bank differs slightly, through a good summery is a blog post from 2010
([http://mfc.elmberg.net/2010/03/07/kontantuttag-vad-galler-
fo...](http://mfc.elmberg.net/2010/03/07/kontantuttag-vad-galler-for-min-
bank)). I am quite sure however that most is not law, but rather the banks
trying to increase earnings by pushing customers to use credit cards over
cash. However, if you ask the banks, they will say its to limit the number of
robberies at banks. Given the speed that we are moving towards a cashless
society, the truth is likely a mix of them all.

I picked Swedbanks number in my post above, mostly because they are focused on
normal consumers and less so at businesses. The numbers are also fairly
similar to other banks, with only a few hundred dollars in difference compared
to other banks. Their exact numbers are written on their website
([http://www.swedbank.se/privat/kort-och-
betalningar/kort/om-k...](http://www.swedbank.se/privat/kort-och-
betalningar/kort/om-kort/kontantuttag-och-insattningar/index.htm)). However, I
couldn't find a link for the procedure with larger transactions. The best I
could find is this news paper article
([http://www.sydsvenskan.se/ekonomi/bankerna-stoppar-stora-
utt...](http://www.sydsvenskan.se/ekonomi/bankerna-stoppar-stora-uttag/)). I
learned personally the procedure by calling my bank and going through the
process myself.

------
rvkennedy
Now this is getting interesting. For a _decentralized_ virtual currency:

 _A person that creates units of this convertible virtual currency and uses it
to purchase real or virtual goods and services is a user of the convertible
virtual currency and not subject to regulation as a money transmitter._

I would translate that to mean "no sales tax"... and that won't last long.

~~~
wilfra
What that means is that people mining bitcoins don't need to adhere to the
regulations for Money Servicing Businesses (MSBs):
<http://www.fincen.gov/financial_institutions/msb/>

However bitcoin exchanges/wallets (i.e. Coinbase) will need to.

Edit: It's not so simple. See child/grandchild comments.

~~~
vilhelm_s
And also

> By contrast, a person that creates units of convertible virtual currency and
> sells those units to another person for real currency or its equivalent is
> engaged in transmission to another location and is a money transmitter.

This sounds like they want miners to register as money transmitters?

~~~
deepblueocean
tl;dr No. IANAL.

If you mine Bitcoins, you hold them. If you want to exchange them, you can
give them to someone in exchange for dollars (in which case the exchange is an
MSB and is subject to the rules for money transmitters) or you can give them
to someone in exchange for "real or virtual goods or services", in which case
you're fine, or you can hold them, in which case they don't care.

On the other hand, if you happen to mine some coins and then set up a lemonade
stand in front of your house where you sell those coins to somebody in
exchange for real dollars, then you are a money transmitter according to the
guidelines.

~~~
DennisP
That would make sense, but doesn't appear to be what they actually said. They
didn't mention that if the party buying your bitcoins for dollars is itself an
exchange, the miner is exempt from regulation.

------
ufmace
At first glance, it looks like it would require all miners and exchanges that
convert between BTC and USD to register... However, I also found this:

[http://www.fincen.gov/financial_institutions/msb/definitions...](http://www.fincen.gov/financial_institutions/msb/definitions/msb.html)

Among other things, it states that there is an activity threshold of
$1,000/day before you have to register.

Regarding miners, in current exchange rates, there is $180,000 in BTC being
mined each day, so you'd have to be doing about 0.5% of the total BTC
hashrate, which would currently be around 250Ghash/s, to one organization to
qualify. Anyone with a rate that high is basically a for-profit business at
this point, and with that income level, I'm not too worried about them having
to register. The large pools also have rates well above that, but I'm not sure
if they would qualify, depending on exactly how they distribute earnings.

As far as exchanges, at that level of business, they pretty much are a
substantial financial institution, and I don't see a real problem with them
having to register as such.

I see it as a net win for Bitcoin - a relatively reasonable amount of
regulation, and in return, the implied assurance that there will not be a much
more severe level of regulation or an attempt to criminalize anything
involving Bitcoin. I think the market is reading it the same way, because BTC
seems to be up against the USD on all of the exchanges I checked.

Of course, I could be reading this all wrong... I'm no lawyer and I don't
really know much of anything about financial regulations.

~~~
RoboTeddy
The same page says,

> No activity threshold applies to the definition of money transmitter. Thus,
> a person who engages as a business in the transfer of funds is an MSB as a
> money transmitter, regardless of the amount of money transmission activity.

So, the $1000/day threshold appears not to apply to money transmitters.

(I'm not a lawyer)

~~~
ufmace
Hadn't noticed that, could change things... There's a lot of wrinkles in how
these laws are actually applied, though. I suppose it will take a while to
sort out exactly what each type of entity needs to do.

------
daxelrod
Does this guidance also apply to video game virtual currencies as well? My
initial assumption was that "convertible" means it only applies to currencies
that can be exchanged back and forth with fiat currency, but I don't
explicitly see that stated.

~~~
jmomo
I doubt the authors were smart enough to think of this, and I don't think most
people here have really thought of this yet. The online gaming industry is
going to be very interested in this once they realize the potential impacts.

In the case of Diablo III, you can sell your in-game virtual gold for real
money in their Real Money Auction House, via PayPal. Other games have less
official means of exchanging between currencies, but that's at least one
official/built-in version that I can think of.

~~~
jarin
They're covered in the "centralized virtual currencies" section. Since Diablo
gold only exists on Blizzard's servers, it is a centralized virtual currency.

Blizzard and gold selling sites are considered MSBs, but not users.

------
pyre

      | Accepting and transmitting anything of value
      | that substitutes for currency makes a person a
      | money transmitter under the regulations
      | implementing the BSA
    

This makes it sound like anyone that anyone engaging in a financial
transaction is a "money transmitter."

~~~
hayksaakian
Along with facebook coins, diablo 3 gold, and linden dollars.

\+ any mobile game with "coins" that can be bought with dollars

~~~
ajross
Where can I convert that stuff to dollars? Yes, they have "value", but they
aren't currency. Often there's a "market" you can find to convert real world
currency _in to_ game junk. But there are no symmetrical markets for buying
dollars with game current. That's a vitally important distinction, and part of
the definition of a currency.

Bitcoin is a currency. It was designed that way, there is no attempt to hide
that fact, and everyone involved knows what it is. Pretending that a currency
exchange won't be regulated like other exchanges is just fantasy.

~~~
breser
In the case of Diablo3 you can buy in game gold for money off the real money
auction house.

Going the other way you can sell gold for money on the real money auction
house and in return can receive the money into a PayPal account.

There is a transaction fee of 15% of the total sale price for converting to
real money. This is on top of the transaction fee for selling the item on the
real money auction house which is either $1 (items) or 15% (consumables
including gold).

[http://us.battle.net/d3/en/game/guide/items/auction-
house#fe...](http://us.battle.net/d3/en/game/guide/items/auction-house#fees)

So sending money from one person to another via diablo3 gold would cost 30% or
possibly less if you buy items with the gold you buy and sell them on the real
money auction house, though that's probably slower and more time consuming.

Alternatively you can transfer the money to a Blizzard account, which can be
used to buy items on Blizzard's own store. This avoids the 15% fee for the
transfer of real money (but not the listing fee). However, laundering money
with Blizzard merchandise is probably a risky business. That said, if you
bought enough of a game right around it's release that was popular it might be
worthwhile.

PayPal itself is a registered MSB. So that may avoid the issue for Blizzard in
the case of the route of converting to real money via PayPal. However, I'm not
clear if the regulation applies in the case of buying goods and services from
a Blizzard account.

I'd say the fact that you can trade gold in game between players is itself
another problem for Blizzard.

I'm not a lawyer, this isn't legal advice, etc...

------
waterlesscloud
Bitcoin Magazine's take - [http://bitcoinmagazine.com/fincen-bitcoin-users-
not-regulate...](http://bitcoinmagazine.com/fincen-bitcoin-users-not-
regulated-exchanges-are/)

------
retrogradeorbit
An important point to realise here, that some seem to be missing, is bitcoin
is a global currency and these rules only apply inside the United States.

------
nym
This is driving the price up, and is great news. I know of two businesses with
_FinCEN registration IDs_ :

<http://howdoyoubuybitcoins.com/from/ziggap/>
<http://howdoyoubuybitcoins.com/from/bitinstant/>

Digital cash isn't going away anytime soon.

~~~
betterunix
I am not sure it is accurate to call Bitcoin "digital cash," given that it
does not actually meet the formal definition of a secure digital cash system
-- Bitcoin is not secure against a polynomial time adversary.

------
drucken
This seems a bit of a landgrab or an exploitable (regulation-sense) ambiguity:

 _In addition, a person is an exchanger and a money transmitter if the person
accepts such de-centralized convertible virtual currency from one person and
transmits it to another person as part of the acceptance and transfer of
currency, funds, or other value that substitutes for currency._

So, if you only exchange virtual currency, do you now fall under US FinCEN
rules or does, say, virtual currency not count as a "substitute" for currency?

~~~
joe_the_user
Not really a land- _grab_. Just the landlord walking up to some folks
picnicking and mentioning, "by the way, you are on my land". Or equivalently -
"Hi, I just wanted to mention that your leash is exactly this long. Thanks for
listening"

It's not like the government isn't always thinking about the importance of its
control over the currency.

~~~
drucken
Control of currency in the form of _legal tender_ , yes that would be fully
understandable. But I'm talking specifically about the passage on
"decentralized virtual currency" _and_ all that is being exchanged is virtual
currency.

For example, you charge a fee in the virtual currency itself (or some other
virtual currency) for exchanging it in some way that does not involve legal
tender of any jurisdiction.

~~~
URSpider94
_For example, you charge a fee in the virtual currency itself (or some other
virtual currency) for exchanging it in some way that does not involve legal
tender of any jurisdiction._

What would you be exchanging it for, then?

All the Treasury is trying to regulate is the exchange of dollar-denominated
wealth into another currency, whether actual (fiat currency of some
jurisdiction) or virtual. They don't care about transactions that don't
involve dollars on one side (at least not as addressed by this letter).

------
olefoo
I see that the prepaid accounts for cellular and game access can be sanitized.
I expect at least one shady MVNO to offer prepaid SIM cards that can be
recharged with BTC as that's a very easy way to move cash across national
borders; and I expect that telco's are treated with pretty much the same
_laissez faire_ attitude as HSBC was with respect to money laundering.

~~~
fpgeek
How would money laundering via prepaid SIMs work?

Every time I've gotten a prepaid card, I've had to show identification
(usually a passport outside the US). From what I recall the ostensible reason
for this is to track people who might use a cell phone as a remote bomb
trigger. Nevertheless, if there is an ID associated with each prepaid SIM, I'd
think that would be the hook that could be used to penetrate a money-
laundering scheme. Am I missing something?

~~~
olefoo
It's not the end-user who's likely to be doing money laundering, although that
might happen any how.

Here's a sketch of how it might work, an entity with a large amount of USD in
bank accounts in the US, that wishes to move the money elsewhere without
triggering SARs pays USD for prepaid wireless service which they use to
provision prepaid wireless cards, which loudly advertise that they can be
funded using BTC. Millions of people who are locked out of the "real" economy
in one way or another start using BTC to buy wireless minutes, or electricity,
or nights in capsule motels; whatever fungible commodity the prepaid service
provider can get a good deal on. Those BTC are perhaps transferred back into
TND, ISK, CHF or some other local currency, or kept as an offshore BTC fund.

Connoisseurs of global financial crime will recognize that this is basically a
souped up internet speed version of the Peso Exchange that doesn't rely on
shipping goods to overseas locations.

Now if a player with enough legitimate cover were to run this playbook, they
could do it as a branded card and basically own the public perception of
prepaid card good for all kinds of things that can get paid for by the
internet...

Not to say that there aren't issues with this model, and this is not a game
one could get into with less than 30 Million USD in liquid assets. But there
are a surprisingly large number of organisations that could field both the
front businesses and the free cash flow to run this. And a slightly smaller
number that could do it in a way that wouldn't wind up with their executive
team on the Interpol watchlists.

------
dreamdu5t
How does this affect bitcoin startups like CoinBase? Do they have a money
transmission license? Can you even get one for Bitcoin?

------
mrbrannon
This faintly gives me nightmares remembering the difficulties the US
government caused converting poker winnings back into US dollar payouts. If
something doesn't outright break current laws, we have a tendency to just
legislate it out of existence. I want bit coins to succeed but this seems like
a real possibility.

------
zaptheimpaler
Slight tangent:

What is the status on the tax implications and the legality of online gambling
with bitcoin? There are a few places online that let you play poker etc. with
bitcoins. Is that legal in the US? How are winnings taxed?

The
wiki([https://en.bitcoin.it/wiki/Tax_compliance#Are_my_bitcoins_ta...](https://en.bitcoin.it/wiki/Tax_compliance#Are_my_bitcoins_taxed_as_income.2C_or_as_capital_gains.3F))
talks about "Income that is earned through the exchange of services with
another person, whether in the form of bitcoins, dollars, or barter;". Would
income through gambling fall in that category?

------
wmf
Coincidentally, the largest Bitcoin exchange is moving from Japan to the US in
less than two weeks. <http://coinlab.com/transition>

~~~
andrewpi
Not moving entirely, just 'outsourcing' their US business to Coinlab, I
believe.

------
hippich
After my initial post, which caused a lot of discussion -
<https://news.ycombinator.com/item?id=5398686> , I have another question for
Y'all:

Let's imagine situation where program is created, which uses bitcoins as a
payment to automatically buy computing resources and launch more instances of
itself.

And to get bitcoin to pay for these resources this program provides proxy/VPN
service.

Does program owe taxes? From what amount? To whom? In what currency?

------
aneth4
As long as you can convert bitcoin to some relatively stable currency
somewhere in the world, the US government will have a tough time getting a
handle on it.

There is no reason bitcoin needs to be converted to USD on US soil. If you
have to exchange your bitcoin for HKD in Hong Kong, easy methods can arise for
this, and it may not be a big issue.

------
nivertech
TL;DR

If you only buy or mine bitcoins - you are safe. Once you'll try to exchange
them for real money - you must be regulated.

~~~
seldo
"By contrast, a person that creates units of convertible virtual currency and
sells those units to another person for real currency or its equivalent is
engaged in transmission to another location and is a money transmitter."

If you mine bitcoins and then convert them to real money (i.e. not buy goods
or services with them) then you will be regulated.

------
nateabele
My goodness, so many bytes spilled.

I wonder what would happen if we took the time and energy we invest in picking
apart and analyzing unjust and immoral laws/policies (or playing armchair
economist), and directed it at safely circumventing them, and helping others
to do the same?

~~~
illuminate
It is not as easy and much, much more expensive to "safely" circumvent an
unjust/immoral law as it is to critique the problems in any legal system.

------
timinman
BTC seems to like that announcement. It's still climbing.

------
wilfra
Can somebody translate that into English please?

~~~
rheide
The gist I got from it is that the US government is aware of bitcoin, has some
casual ruleset surrounding it and will not (for now) take action against
anyone using it, or if they do, it'll only be the exchanges, not individuals.
Looks like Bitcoin is safer than a Cyprian bank.

~~~
bayesianhorse
It would be safer than a Cyprian bank if BTC prices were as stable as the
Euros. For all the criticisms it received, the EUR is more stable than most of
the currencies it replaced, and it did not see a single crash in prices as bad
as BTC has seen several times. So really, you shouldn't worry about the
possibility of the government taking 7% of your money if the alternative is a
virtual currency that seen losses of more than 75% in a single day.

~~~
retrogradeorbit
Except for the fact that we don't yet know the full extent of the Cypriot
haircut, but it looks that some will be paying way more than 7%. Closer to 15%
for some [1]. They've now extended the "bank holiday" to "Thursday" [2]. And
at least BTC is convertible in a crisis without a central authority. If you
can't get your money from the bank _at all_ (which is the case with Bank
Holidays) then it's not much good to you.

In a systemic financial collapse, between having BTC on my local computer [3]
and having numbers on a computer in a failed financial institution, I know
which one I'd rather have. You may feel differently, and that's fine.

[1: [http://www.zerohedge.com/news/2013-03-18/worst-case-big-
depo...](http://www.zerohedge.com/news/2013-03-18/worst-case-big-depositors-
cyprus-1526-haircut) ] [2: [http://www.zerohedge.com/news/2013-03-18/cyprus-
bank-holiday...](http://www.zerohedge.com/news/2013-03-18/cyprus-bank-holiday-
gets-another-extension-bank-reopening-now-set-thursday) ] [3: Well, the
private key assosciated with the BTC blockchain that those BTC are assigned to
]

------
humanspecies
We should probably realize that the government will find a way to either:

1) Embed itself firmly into the bitcoin process and siphon cash for the
bankers who run the government or 2) destroy bitcoin if it's so secure it can
run without a government.

~~~
lucb1e
1) They're already in as deep as they can get. Bank transfers (the way most
BTC is traded) already leave an audit trail. The problem is that they can't
control the transactions themselves, but they will never be able to, so
they're already in as deep as they can get.

2) How would it destroy it? There is quite a lot of distribution already, I
think it's not much longer before Bitcoin could survive without official
exchanges. They'd also need to outlaw cash if they want to stop Bitcoin from
being bought.

