>“All it would take would be one terrorist incident in the U.S. funded by bitcoin for the U.S. regulator to much more seriously step in and take action, he said. “That’s a risk, an unquantifiable risk, bitcoin has that another currency doesn’t."
You can't make this up... or maybe I'm not understanding something. So, what's currently funding terrorist attacks?
It's not like terrorist groups are currently un-funded. Cash is still king around illegal activities of all kinds. Why is using bitcoin for illegal activity any different than untraceable cash?
Your points are valid, but I think you're misunderstanding his point. If a terrorist attack happened that was funded via Bitcoin, and could've only been funded via Bitcoin (including a false-flag) the governments would throw the book at it. This could be terrorist groups sending BTC to legit US citizens who purchase things (like weapons) legally and then use them in an attack, &c.
The "could've only been funded via Bitcoin" part isn't even necessary. The US government is kind of crazy when it comes to terrorism. Any connection between Bitcoin and terrorism that gets a lot of public attention is likely to result in major legal problems. It doesn't matter whether or not the fear is well founded or whether Bitcoin's role was incidental. Look at how much pressure there is to crack down on encryption in general, and that would have far wider-reaching consequences than regulating a cryptocurrency only a tiny percentage of people actually use.
He's not arguing that Bitcoin would be responsible for the terrorist action. He's arguing that hysteria would hold Bitcoin accountable. And this would create pressure to pass legislation that would crack down on it.
And deserved or not Bitcoin is perceived differently than cash. Its seen as something nefarious, and strange. Where cash is something familiar.
The irony of course being that the US has even bombed USD cash reserves of ISIS. The USD network funds plenty of unscrupulous acts. It's a shame that people won't be able to see that equivalency though. When regulators come after Bitcoin, it will be from a conflict of interest, not a moral high ground.
To play devil's advocate: cash (fiat in general) is often traceable to bank accounts, wire transfers, ATM CCTV, credit card records, marked bank notes, etc.
While it's still v possible to track a bitcoin transaction from recipient to sender, there are countermeasures with varying degrees of efficacy. At any rate, it's not the traceability of X per se that matters, but rather the stigma, and given how many billions of $ in illegal activity bitcoin has been used for, and the high-profile cases of Silk Road etc, it's very easy to see that scenario (i.e., the US Congress + interested lobbyists cracking down on Crypto) happening.
I'm going to take the cynical view here. The issue is that there are rules around movement and use of cash that are clear that banks can follow to say 'not my fault' when terrorists use cash. No one knows what's illegal and legal for the movement of bitcoins. No one knows what compliance they need. How does investing in a currency where the regulations are likely to dramatically and suddenly increase in certain unpredictable ways play out? Can regulatory changes cause a huge amount of volatility and downward pressure?
HSBC and Wachovia were recently involved in the laundering of hundreds of billions of dollars for Mexico's biggest drug cartel (and pretty much every executive involved came out unscathed once it was revealed).
When I bought drugs in high school, it was usually in cash. Sure, I concede multi-million dollar operations may have bank help, but I don't think you're thinking about the full picture.
One big difference is that cash is too popular to ban entirely. If a major attack were somehow linked to Bitcoin, the US government could make the whole thing illegal. We all know that wouldn't do much to actually stop terrorist attacks, but it would be a major problem for a wealth manager trying to operate within the law, and being ineffective certainly hasn't stopped the US government from passing dumb anti-terror laws in the past.
I think the point is that bitcoin is very fragile and any powerful enough state-actor can bash it to the ground. There are various ways to achieve this, from shorting to propaganda, to attacking (hacking) large exchanges or miner networks and so on. Only time will tell of course, maybe that is already priced in.
You’d have to make the inverse of that transaction illegal as well. If you banned me from exchanging BTC for USD that wouldn’t stop he from buying more BTC nor using it to purchase things.
Fail to see how is Bitcoin fragile. It has been running non stop for past 8 years churning out a block every 10 minutes without fail while being under constant attack from hackers, governments, it has its own internal governance issues, hard forks, technical issues, scaling debates. And yet it is growing in liquidity and scale.
I doubt state actors can do anything about it.
This attitude is what I see as Bitcoin's primary risk factory. It's a culture of arrogance that reminds me of pre-crisis finance, when it was popular to say things like "the Federal Reserve chairman is more powerful than the U.S President."
The Bitcoin code is open source. Anyone from anywhere can download the code and run a local copy. Your coins are securely stored across computers all over the world. Your balance cannot be frozen by any authority. Maybe central exchanges that convert fiat to Bitcoin could be regulated, but mining cannot be stopped, transactions cannot be stopped. Unless governments all over the world shut down electricity and internet.
At that point question mark is on the government that does this rather than Bitcoin.
> Your coins are securely stored across computers all over the world.
Please lets not start this debate. Times and times again it has been proven that software is not secure. OpenSSL was also thought to be secure for quite some time too..
Agreed. In this case there is an implicit, very large, bug bounty that anyone can cash in. So far there has been one creation of new bitcoin bug and zero spending other people's bitcoin bugs.
That does not mean it's secure, but at this point it's looking more secure every day.
The more centralized bitcoin becomes, and it will, the more vulnerable it will be. As time goes by a few exchanges will become huge BTC storage centers. What if it’s an inside attack and someone steals the data from the servers? Is there any insurance/rollback mechanism in place?
The internet like several large systems people depend on were created by major institutions for major institutions and any attack on them would weaken the institution doing the attacking. Bitcoin however, was created mainly to circumvent major institutions, so they have no vested interest in protecting it unless there exists 3rd party grassroots pressure to do so.
Big difference is that Bitcoin has all the right conditions for a bubble pop. If someone did a 51% attack, this would cause people to lose trust in the currency, everyone would cash out, creating a bank run, which would be a self-accelerating process that drives the price even lower. So even if the network recovered the next day, it would take a long long time to rebuild that trust.
Whereas with the internet, if someone is able to knock out critical infrastructure one day, engineers would figure out a way to fix/reroute it, get it working a few days later, and everyone would happily log back on as soon as it's working. Although maybe they would throw out their "smart" coffee machines and etc.
Sure you're right, some people would stay invested, some people would even re-invest during the price drop (dead cat bounce).
But the previous crashes weren't caused by any real news of a significant weakness of Bitcoin, so if there was news like that, then the crash would be worse than we've seen.
He is alluding to the anonymous nature of bitcoin. Today even if the funding happens in USD there is trail - to countries and banks. Sanctions can be slapped against countries and banks fined. What about bitcoin? It cannot be fined and the only way to sanction is to "take action"
I'm glad to see this, but I don't think the content is particularly on point (or compelling really).
A large amount of Bitcoin reporting at the moment is grossly irresponsible. This "Bitcoin will be $1M each" is fueling bad decision making on the part of the ordinary punter.
Right now there is a major civil war in the Bitcoin camp (BTC vs BCH). It's playing out as we speak. Whatever your horse in that race, it's extremely volatile. Not only that, there are other tokens, shady ICOs, exchanges with suspect resilience.
It's also impossible that your on-the-street investor can be informed enough to make a good choice. This is really concerning.
Makes sense - government could instantly prevent BTC from gaining mainstream adoption as a currency. Unclear how price would move if BTC was only used for store-of-value only.
In Venezuela, people go to jail under treason laws if they get caught mining. [1]
> Bitcoin has also not reached the critical mass to be considered a viable currency to invest in, UBS’s Mark Haefele said in an interview. The total sum of all cryptocurrencies is “not even the size of some of the smaller currencies" that UBS would allocate to, he said.
> “All it would take would be one terrorist incident in the U.S. funded by bitcoin for the U.S. regulator to much more seriously step in and take action, he said. “That’s a risk, an unquantifiable risk, bitcoin has that another currency doesn’t."
These two taken together seem to paint two very different pictures for bitcoin.
1) Bitcoin makes it past the point where a couple singular bad acts pushes governments to crush it. Bitcoin sheds almost all of the value that was there as speculation. Value potentially crashes all the way down to ~1USD, prices before mtgox trading really started. Bitcoin continues to run, more and more over encrypted channels or TOR. Mining is prosecuted and only done in some states, or clandestinely (see mining in Venezuela). Bitcoin continues to be used on the dark markets of the internet.
2) Bitcoin is adopted by wallstreet, action against bitcoin is prevented and tempered by lobbyists with deep pockets. Price increases dramatically.
Either future is amazing to me. Either gritty cyberpunk or vanilla sci-fi. Glad to see this happen in my lifetime.
It is a fair point but you can't buy bitcoin these days without kyc, not to say the IP trace, if they can break tor/proxies and access exchanges records they can "follow the bitcoins", but then again how much funding you need, in EU recently there were quite a few attacks where they just rented a big truck and ran over people, also the bomb in the airport, they made it from some cheap chemicals, and then took a cab.
> Still, CME Group Inc., the world’s largest exchange owner, has said it plans to introduce bitcoin futures by the end of the year, citing pent-up demand from clients. That pushes bitcoin closer to the mainstream by making it easier to trade without the hassles of owning the currency directly.
What's the difference between that and CFDs on eToro?
You're being heavily downvoted but thats the ideal endgame for cryptocurrencies - you'll be able to just "use" them for your use cases, instead of cashing out first.
Presumably at 1 mil per coin it has become our defacto medium of exchange. Actual bitcoins become the new gold bars, sitting untouched in vaults and used as a reserve backing other more efficient means of crypto exchange.
Why would they be used to back anything? Why not just use a crypto-currency that isn't clogged by developers trying to make people use their proprietary service?
Yeah after re-reading this thread I think I've properly gone off the deep end with this one, I've probably misread your initial comment, I think, sorry if I did.
Please explain your statement in detail with sources and facts please, I'm sure I know what you're trying to insinuate so I'm going to ask you to back your claims up with some truth.
Maybe because CyberDildonics asked a couple of questions, and you're asking him/her for facts and sources. People don't need facts to ask questions. That's kind of why you ask - to get facts.
You read CyberDildonics' questions as being an attempt to push an opinion (which seems unjustified to me). You might try not assuming the worst about people in the absence of better evidence...
I'm asking him to back his opinion up because his question was a loaded question:
Question: "Why not just use another crypto-currency?"
Load Question: "Why not just use a crypto-currency that isn't clogged by developers trying to make people use their proprietary service?"
He is applying bias to it from the get go, your comment is a bit strange, asking a question doesn't exempt you from asking honest questions that aren't loaded, you don't enter some realm of sanctity just because you're asking a question. You can ask for further clarity as to what the person is asking before answering it.
But the question was about using Bitcoin to back something else. What's the "something else"? It's not Bitcoin. Is it something proprietary? dxhdr (whose post triggered this conversation) doesn't say, but it would almost certainly be more proprietary than Bitcoin.
Why "almost certainly more proprietary than Bitcoin"? Because somebody's using their bitcoin to back something else. That "somebody" creates (and therefore to some degree controls) that "something else".
At that point, CyberDildonics' question isn't loaded. It's a perfectly reasonable question in response to the proposed idea.
And, after all this back and forth, the question remains: Why would I want to use something backed by Bitcoin, when I could just use Bitcoin?
"Nakamoto is believed to own up to roughly one million bitcoins..." "As the sole, predominant early miner the inventor was awarded bitcoin at genesis and for 10 days afterwards."
this isnt true, when countries have massive instability and currency manipulation (see Zimbabwe), people can buy bitcoin as an alternative store of value.
To some extent, even stable currencies suffer from significant manipulation by governments. This is not a tinfoil hat idea, it's generally why non-corrupt central banking helps achieve social stability.
But central banking is a large hammer, and so even in the US there are many uses of currency where Bitcoin shines. Also, over time no central bank has managed to avoid some form of corruption (this is concerning both for fiat and centralization-prone cryptocurrencies like Bitcoin).
But the factors that lead to corrupt central banks are not primarily monetary, they are social/societal, causing those banks to bend to the whims of some interests while ignoring others.
The interesting thing to observe will be how/whether Bitcoin can adapt its broader organizational structure to make it less vulnerable to these forces of "bad" centralization. Also, if trends continue, the risk-takers of today who own Bitcoin may well be the wealthy influencers of tomorrow and may not take kindly to some of the sensible changes.
There are many, many ways in which Bitcoin is far superior to the typical fiat + central bank system, though, most notably its international nature. Even if Bitcoin's ability to avoid problems is only 90% as effective as the most effective fiat systems, that is a tremendous improvement for most of the people living on Earth.
One of the things the better fiat currencies have is stability of value. Bitcoin (at least so far) has failed rather dramatically at that. It's been mostly up so far, which makes many people willing (even eager) to accept the lack of stability, but it definitely hasn't been stable.
Very true. It's interesting to think of what you describe as a side-effect of the design decision (by Satoshi) to "bootstrap" the currency by strongly incentivizing speculative mining.
The key aspect of Bitcoin is that buyers/sellers can operate anonymously. Once governments regulate Bitcoin and makes the anonymous nature illegal, Bitcoin will crash and be essentially useless.
You can't make this up... or maybe I'm not understanding something. So, what's currently funding terrorist attacks?