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>Ignoring fees for a moment, if there are Bitcoin ATMs on both ends of the remittance transaction, it's pretty easy for the participants.

Why wouldn't international BTC transfers be regulated the same as international currency transfers?

Decentralized P2P bitcoin transfers are not easily regulated; It would be like regulating other P2P technologies like BitTorrent or encryption software. Of course, if a centralized business is in the middle, you can regulate that, but it's not a necessary piece of the solution.

Such centralized businesses will be swiftly shut down by legislation if bitcoin cannot be regulated. If shutting down the centralized businesses isn't enough, bitcoin will be outlawed. Identifying users is easy enough due to the nature of the network.

That is not the direction the government is currently going.

A ban of the technology would pretty bad and unprecedented, but if push came to shove, Bitcoin traffic could be disguised as other traffic.

What will the government do with Bitcoin the day a report comes out that American citizens have been killed in a terrorist operation financed by bitcoin?

What did the government do the day evil things happened over the internet using encrypted communication?

It banned the export of cryptography.

And yet a little "https" logo smiles at me in the address bar as we speak.

Point being that the government can't and doesn't ban everything that can be used for evil, be it from incompetence or rationality. Bitcoin will probably be heavily monitored though, as it is very suitable for that purpose.

I was referring to a mainly historic, very strict export ban that categorizes cryptographic software as munitions:


HTTPS was crippled, since Netscape shipped only 40-bit RC4 internationally.[1]

PGP's source code was printed so it would fall under First Amendment protections, since binaries weren't legal for export.[2] (See also DJB's Bernstein v. United States)[3]

OpenBSD/OpenSSH is still based in Canada to avoid being subject to the laws.


1 http://en.wikipedia.org/wiki/Export_of_cryptography_in_the_U...

2 http://en.wikipedia.org/wiki/Pretty_Good_Privacy#Criminal_in... and http://www.pgpi.org/pgpi/project/scanning/

3 http://en.wikipedia.org/wiki/Bernstein_v._United_States

4 http://www.openbsd.org/crypto.html

I know, but in the end they couldn't keep it that way forever.

Yes, of course.

Isn't it conceivable that the government would implement a similarly short-sighted (and ineffectual) policy if Bitcoins were seriously used to harm the US? :-P

Give it time.

>A ban of the technology would pretty... unprecedented

It would not.

I'm not sure identifying users of the network is quite as easy as you may think it is. If by users you mean those sending or receiving bitcoin transactions. It'd be an interesting challenge to identify the IP address originating even a single Bitcoin transaction. How can you tell whether a node is the originator or simply a relayer of a transaction? For added privacy, run Bitcoin over Tor.

By users I mean anyone participating in the network.

>Of course, if a centralized business is in the middle, you can regulate that

Who else will run the BTC ATM on each end of the transaction?

You're not completely wrong. But without Bitcoin being accepted everywhere for everything, dollars will always be involved, and that's when're the regulation can and will live.

It'd be like trying to regulate 500 million independent banks. You could make a law about it, but it'd be impossible to enforce.

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