

Senators seek crackdown on "Bitcoin" currency - emilepetrone
http://www.baltimoresun.com/business/sns-rt-us-financial-bitcoitre7573t3-20110608,0,1767151.story

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jaysonelliot
There's nothing governments hate more than watching people get along fine
without them.

~~~
m104
Just as there's nothing that gives conspiracy theorists more reinforcement
than a government crackdown.

~~~
zcid
I fail to see any implication of conspiracy in his statement. It isn't even
referencing a real human emotion or intentional malice but anthropomorphizing
the institution of government. Growth of government jobs, department budgets,
and votes for elected officials all require a constantly increasing scope.
It's built in to the system. There is no (easy) mechanism for relinquishing
control in an area. Unfortunately, the end result is accelerating government
bloat and loss of freedoms.

There is no need for conspiracy when human nature ensures the same result.

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CoryMathews
"reports that they are used to buy illegal drugs anonymously."

holy crap I can do the same thing with dollar bills! Shut down the monetary
system also..

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Bud
This headline seems a bit hyperbolic; the article does not actually
substantiate the part about Schumer going after Bitcoin. It does reiterate the
news about Schumer wanting Silk Road shut down; that was reported yesterday on
HN. But there's nothing new here that says that Senators are going after
Bitcoin, specifically, except for the headline.

~~~
zinkem
The headline is accurate. They seek action, they are not acting yet.

You're right that there is nothing new here, however.

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kilroy123
There's always been an untraceable currency sold and traded globally. Gold.
You can't trace it back to the origin, as long as it's been melted down.

The only thing is, you can't easily transport it. And lets be honest, how many
people are willing to accept gold?

This is scary stuff for governments all over the world, not because you can
buy drugs or use the currency for illicit reasons, it's because -- taxes and
bypassing traditional financial institutions. (Just think paypal)

If you can move money around the world securely and anonymously, you can hide
your money from the tax man. At least in theory...

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olefoo
"You can't trace it back to the origin, as long as it's been melted down."

Allow me to introduce you to the concept of Isotope Fingerprinting
<http://en.wikipedia.org/wiki/Isotope_fingerprinting>

So even melting doesn't necessarily prevent tracing.

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daniel-cussen
I'm not sure you can do that with gold because there's only one
stable/naturally-occurring isotope, and the most stable other isotope has a
short half-life of six months. Labeled gold's radioactivity may be a give-
away.

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foob
What about trace element analysis?

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sycren
Are you suggesting adding small impurities to the gold and then measuring them
at a later stage? Surely that would be a very easy thing to change.

~~~
foob
You don't need to add the impurites, they're already there. Metals have fairly
distinct patterns of impurities depending on where they were mined from and
it's basically impossible to entirely remove them. If you expose a sample of
metal to a large flux of neutrons (usually in a reactor) then the nuclei of
the various elements in the metal will absorb neutrons and then decay. The
products of these decays can then be analyzed to work out the composition of
the metal even if an impurity is very small. This type of analysis has been
common for a very long time now. An example of a current use is determining
the country of origin for controlled metals like plutonium and uranium.

There are ways to get around this kind of approach (by adding impurities, not
removing them) but I felt like mentioning it because it makes a lot more sense
in this context than isotope fingerprinting.

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benihana
This isn't about drugs. This about the coercive force of government wanting a
cut of the profits. Think of it as a protection racket.

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tsotha
Yep. Falls in the same category as money laundering.

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Joakal
If DEA confiscates proceeds of a crime and it's all Bitcoins. Will they cash
them and give further validity to the Bitcoins or is it effectively sent to
/dev/null indirectly increasing the value and indirect lesson in drug
economics?

Interesting dilemma for them.

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extension
The market doesn't seem to be worried

[http://bitcoincharts.com/charts/mtgoxUSD#rg10zvztgSzm1g10zm2...](http://bitcoincharts.com/charts/mtgoxUSD#rg10zvztgSzm1g10zm2g25)

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wedesoft
Shutting down Bitcoin because of illegal drug trade is like banning
cryptography because of terrorism: It is not solving the problem and it is not
a valid reason for stopping innovation.

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oakenshield
Yet, it did not stop them from trying _really hard_, for example, with the
Clipper chip and export restrictions on software that used crypto. Even now,
foreigners who come to the US to work or study face extra scrutiny (whatever
that means) if they work in crypto.

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joshontheweb
yeah, this happens all the time everyday with cash. life goes on...

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verisimilitude
Parent is wisdom disguised as snark. The reason given for outlawing bitcoin:
drugs. I think the real reason is taxes.

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miespanolesmalo
Wait a sec. You can buy illegal drugs with Bitcoins?! Thanks senators!

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gasull
Didn't some politicians try to shut down Paypal in its early days? I remember
that from reading The Paypal Wars.

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edge17
Could you elaborate or provide some linkage? I'm curious what the perceived
issues were back then.

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click170
Read the article as s/bitcoin/cash/ and you see that all the things they hate
about bitcoins exist with cash already, but they don't care about that.

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gburt
In case anyone's interested, this is the Bitcoin "drugs" site in question,
"Silk Road." [http://gawker.com/5805928/the-underground-website-where-
you-...](http://gawker.com/5805928/the-underground-website-where-you-can-buy-
any-drug-imaginable)

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natmaster
The federal government raided the "Liberty Dollar" factory, which isn't even
an actual currency (just a collector's item). Why are they being so cautious
with something that's actually supposed to replace the dollar?

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jonknee
Liberty Dollar was absolutely meant as currency, not collector's items. What
kind of collector collects certificates to the actual items and not the items
themselves?

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ww520
Could this be the push Bitcoin need to go bigtime? Anytime the government
banning something it would inadvertently make it more popular.

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pavel_lishin
Next, WoW gold.

~~~
junklight
next, money.

"I heard that this guy went to his dealer with some _cash_ and walked away
with some drugs leaving no paper trail whatsoever."

~~~
omouse
They're already trying to limit how much cash you're legally allowed to carry
without having to explain yourself to a police officer in some states.

You don't need to make cash illegal though, you just have to make the
alternatives really really attractive.

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etherael
First they ignore you, then they laugh at you, _then they fight you_ , then
you win.

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shareme
hmm so how will they outlaw bartering?

But than again the derivative traders, they are allowed to make free money and
steal without any change..

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hugh3
Sorry shareme, but this is pretty much a perfect example of a bad HN comment.

 _hmm so how will they outlaw bartering?_

Unjustified logical leap.

 _But than again the derivative traders_

Misspelling.

 _they are allowed to make free money and steal_

Nonsensical accusation against a group of people engaged in an activity which
I'm not sure you fully understand.

 _without any change.._

Incomprehensible.

Please think before you type.

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burgerbrain
As far as I can tell, the suggestion that they might as well soon go about
outlawing bartering is a sound one. Neither bartering nor bitcoins use US
minted currency, both cannot be traced unless the participants volunteer that
information, and both arguably can be used for "tax evasion". I'm not trained
in tax law, but it wouldn't really surprise me if legally citizens were
mandated to report barters on their taxes.

Furthermore, both can be used to acquire drugs. Of course, bartering is at
this point _far_ more popular for that...

 _"Misspelling."_

Seriously dude? This isn't slashdot.

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hugh3
_As far as I can tell, the suggestion that they might as well soon go about
outlawing bartering is a sound one. Neither bartering nor bitcoins use US
minted currency, both cannot be traced unless the participants volunteer that
information, and both arguably can be used for "tax evasion". I'm not trained
in tax law, but it wouldn't really surprise me if legally citizens were
mandated to report barters on their taxes._

The IRS, unsurprisingly, is way ahead of you on this one

<http://www.irs.gov/taxtopics/tc420.html>

and in fact you _are_ obliged to report bartering income on your US taxes.
Bartering, of course, remains perfectly legal, as long as you report it on
your taxes.

Of course the IRS doesn't bother to enforce this on small-scale bartering. But
if you set up a large-scale bartering network then they would. If you went one
step further and threw in an intermediary system of "credits" so that
transactions could take place indirectly (instead of swapping pigs for goats
you swap pigs for credits and credits for goats) then they'd consider that as
minting currency and take a rather dim view.

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tsotha
You used to be able to use casino chips in Vegas just like cash. You could pay
for your meal with chips in a place totally unrelated to gambling. You could
pay for your taxi ride in casino chips. Casinos would accept chips from other
casinos without any problem.

Then the treasury dept. stepped in and forced them to stop. All that's in the
past now.

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rexreed
Isn't the time and effort of the government better spent in legalizing the
drug trade and earning revenue in the form of taxes rather than trying to
fight a war that is obviously unwinnable?

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hugh3
<http://ycombinator.com/newsguidelines.html>

_Please avoid introducing classic flamewar topics unless you have something
genuinely new to say about them._

~~~
lukeschlather
That applies just as well to this whole thread, doesn't it? I have half a mind
to flag the article except the article is actually important.

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endian
To paraphrase the Beastie Boys[1], "You gotta fight / for your right / to
barrrTER!"

[1] <http://www.youtube.com/watch?v=eBShN8qT4lk>

