Why Bitcoin Lives in a "Legal Gray Area"

CommanderFrank

CommanderFrank

Cat Can't Scratch It
Joined
May 9, 2000
Messages
75,399
As Bitcoins make a slow recovery and beginning to grow a constituency, the ‘crypto currency’ is beginning to draw the attention of governments fearful of its use as an illegal medium for money laundering or worse.

Nothing like Bitcoin existed when current laws were written. A wide variety of laws regulates banks, money transmitters, currencies, and securities—but none of these categories are a good fit for Bitcoins
Click to expand...
 
maybe they are worried about their precious "fed"
 
Sadly, I have more faith in the value of Bitcoin over the toilet paper fiat currency that is the U.S. Dollar.
 
Here they are bitching about bitcoin when there are plenty of f2p currency and xbox points being used in the US for crimes, drugs and other illegal sales. True, bitcoin has one of the more shady markets out there, including illegal weapon and drug sales online, but look at some of the shit that has been committed in say Eve or Terra over its respective currency. They should just pass a law that outlaws all online currency so you have to use that countries respective currency. I think people will be far less receptive to buying "yuan" (Chinese) from a company like Perfect World (PWE) instead of the more ambiguous "zen".
 
No matter how many laws they try to make against BTC, it'll never go away. They'll really see how "gray" the currency is once they eliminate sites like Mt. Gox.
 
USA politicians take "donations' from the criminals anyway so who are they to take the high road?
 
Our government should be worried.
Their ability to stop activity they don't like will be hindered by things like bitcoin.

I know every poker site that has left the US market would have given our government the finger if it weren't for all the trouble they were getting from the banking system.
 
EvilWays said:
Sadly, I have more faith in the value of Bitcoin over the toilet paper fiat currency that is the U.S. Dollar.
Click to expand...
Ditto. I don't see Bitcoin going away until it gets big enough to be a threat and international governments step in to shut down the online exchanges.

The US dollar, on the other hand, is toast. $16 trillion in debt, with only $2.2 trillion in tax revenue every year - it would take us ~7 years to pay off our debt if every penny of the federal government went toward it! Taxpayers are so stupid that they are letting the government add trillions to it every year. We're screwed!

Unless we realistically look at cutting/reducing major entitlement programs and agencies, this country is going to go bankrupt. The only presidential candidate who was even talking about that was Ron Paul and the media suppressed and mocked him out of the election.
 
What are "major entitlement programs"? I hope you don't mean make the poor pay for it because that would be a drastic mistake. Everytime I hear the word "entitlement" I just know I am dealing with some Republican. You Repubs even have our Herr Harper using the same dialogue now and Canada is not even in financial trouble. I've seen him actually say people should not feel "entitled" to certain social programs. WTF we paying taxes for then? Oh right, so some bitch politician can go stay at the Savoy hotel and order a $16.00 glass of orange juice.
 
snaggerpuss said:
What are "major entitlement programs"? I hope you don't mean make the poor pay for it because that would be a drastic mistake. Everytime I hear the word "entitlement" I just know I am dealing with some Republican. You Repubs even have our Herr Harper using the same dialogue now and Canada is not even in financial trouble. I've seen him actually say people should not feel "entitled" to certain social programs. WTF we paying taxes for then? Oh right, so some bitch politician can go stay at the Savoy hotel and order a $16.00 glass of orange juice.
Click to expand...

Poor Democrats get food stamps and welfare, Rich Republicans get huge government contracts with no oversight that they can run massively over budget. Ultimately the middle class Democrats and Republicans get screwed, working for a pittance of the huge government contract and paying taxes to help support the welfare system.

Just so you know where I'm coming from: I'm not poor enough to get food stamps, not rich/connected enough to get gov't contracts, and I don't want to vote for either party..
 
snaggerpuss said:
What are "major entitlement programs"? I hope you don't mean make the poor pay for it because that would be a drastic mistake. Everytime I hear the word "entitlement" I just know I am dealing with some Republican. You Repubs even have our Herr Harper using the same dialogue now and Canada is not even in financial trouble. I've seen him actually say people should not feel "entitled" to certain social programs. WTF we paying taxes for then? Oh right, so some bitch politician can go stay at the Savoy hotel and order a $16.00 glass of orange juice.
Click to expand...

You are right, yet wrong.

I used to make almost 6 figures before the collapse, guess what I make now? 33K take home. I'm no baller, I pay ALL my bills, I carry insurance, I pay for my mistakes and make simple smart moves like *not* having 5 children, or smoking, or weighing 400lbs.

The entitlements I'm tired of funding are the things like seeing a family who doesnt speak english walk out of a hospital owing tens of thousands of dollars. Even with my insurance I had to pay 1600 out of pocket for a brown recluse spider bite. It hurt me pretty bad financially. I handled my own problems and did not rely on someone else to solve it or pay for me. That's what we are tired of. I go to work and pay my taxes so someone with a drug problem can stay home and spit out kids. That is not a sustainable model in any system.

The same sort of fat can be trimmed at the top too -- eliminate all the perks of being a congressman or senator, no more lobbying, no more kickbacks, You get a basic salary and nothing else. No more buying votes, buying seats.

I'm party neutral because in reality the party system has failed us in the long run. The common person in this country is too lazy and stupid to dig deep and see what type of man someone is, they listen to fix news or make up their minds based soley on what group they are aligned with. Not that it really matters anyway at this point they will say one thing and do another, just like the past 50 years.

Funny thing is things could be fixed - but nobody wants to be "that guy" to force people to tighten their belts, to work hard, to make smarter choices. Everyone wants to just float through life and be told everything is going to be okay.

It was said before, the main reason is because they can't tax it or control it. If you are sitting at the top of an increasingly corrupt system and something comes along that you can't control... of course you are going to try and stop it. I'm only 30 but I fully realize the green cotton "paper" in my wallet is a shadow of it's former self.
 
Au/Ag as a store of value

BTC as a means of exchange

get with the program, or get left behind
 
sleepeeg3 said:
Ditto. I don't see Bitcoin going away until it gets big enough to be a threat and international governments step in to shut down the online exchanges.
Click to expand...

I don't see governments ever bothering to shut it down. It's merely a commodity - they can still tax it, just like they tax any other commodity.

The US dollar, on the other hand, is toast. $16 trillion in debt, with only $2.2 trillion in tax revenue every year - it would take us ~7 years to pay off our debt if every penny of the federal government went toward it!
Click to expand...

That's not how that works...

Also, you don't want 0 public debt. Some amount of debt is necessary, and while the current debt is "too high", it's that high because the government is basically investing into the country due to the weak economy. As the economy recovers, the public debt *should* start going back down.

And if you look at the public debt as a percentage of GDB, it's not as high as you might think: http://upload.wikimedia.org/wikipedia/commons/3/30/Publicly_Held_Federal_Debt_1790-2009.png

It's definitely forming a peak, but it's been higher - a lot higher - and this country is still around.

Unless we realistically look at cutting/reducing major entitlement programs and agencies, this country is going to go bankrupt.
Click to expand...

That's not how that works...

EvilWays said:
Sadly, I have more faith in the value of Bitcoin over the toilet paper fiat currency that is the U.S. Dollar.
Click to expand...

I don't, because IMO it is just a fad. But if for some reason it does establish itself long term, it will just become something similar to gold - it has a value, but "investing" in it is a waste of money, and it's only as useful as long as you can convert it back to "real" currency.
 
kllrnohj said:
I don't, because IMO it is just a fad. But if for some reason it does establish itself long term, it will just become something similar to gold - it has a value, but "investing" in it is a waste of money, and it's only as useful as long as you can convert it back to "real" currency.
Click to expand...

That's the problem...relying on "faith-in-government based" value of currency rather than something backed by something tangible such as gold. Unfortunately for the USD, that ended in 1971 (which contributed to some economic stability as we had to wait for everything to balance out once we let the dollar float). If the market isn't careful, our fiat currency could potentially go the way of the ancient Roman and Greek currencies...worthless in the end.
 
EvilWays said:
That's the problem...relying on "faith-in-government based" value of currency rather than something backed by something tangible such as gold.
Click to expand...

Not really. Both paper currency and gold have the same value - which is that they are only valuable because people want them because they are valuable.

Gold is technically a fixed size resource, but it continues to be mined today so in reality both gold and paper currency continue to be "created". Neither paper currency nor gold has any real intrinsic value - they aren't a "useful" resource like food or oil. In the case of a true economic collapse both gold and paper money would, as a result, become useless.

Unfortunately for the USD, that ended in 1971 (which contributed to some economic stability as we had to wait for everything to balance out once we let the dollar float).
Click to expand...

The instability really resulted from the initially high inflation the federal reserve set. We have since learned our lesson, and lowered inflation a lot which which stabilized the dollar in the 80s.

If the market isn't careful, our fiat currency could potentially go the way of the ancient Roman and Greek currencies...worthless in the end.
Click to expand...

Hyperbole is a waste of everyone's time.
 
jojo69 said:
Au/Ag as a store of value
Click to expand...

Why? The value of gold also fluctuates. It isn't stable, it is affected by speculation, etc... And history has shown that it is a bad long term investment. The place to keep your money is stocks if you want to accept some risk for potential reward, or bonds if you want something safer, but lower return.

"To take an extreme example [of price volatility], while dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars. All this is in real terms, taking inflation into account. Meanwhile, a dollar invested in gold in 1801 would by 1998 be worth just 78 cents."
(from "Basic Economics" by Thomas Sowell)

BTC as a means of exchange
Click to expand...

Why? Just like paper currency, it has no intrinsic value. Paper currency or BTC coins - both are basically the same thing.

Well, not quite. The USD has the US govt protecting it, whereas BTC doesn't have anything protecting it. I'll trust the banks to store my money thanks to FDIC insurance. Do you trust Western Digital to store your money?
 
Youn said:
maybe they are worried about their precious "fed"
Click to expand...

Nope. Fed's doing fine no matter how many ignoramuses think that the fixed, deflationary BTC supply curve is better.

Justin Cider said:
It all boils down to their inability to tax it.
Click to expand...

Not even close. If you made money in the borders of the US, you owe taxes. You don't have to make profits in dollars, but you do have to pay your taxes in dollars. You don't even have to be doing something legal to owe taxes. Look up Al Capone. He was busted not by the FBI, but by the IRS, because he was living in bootleg-bought mansions while reporting zero income.

So if you're selling drugs online via BTC's, keep track of your profits and pay The Man. He doesn't have to know HOW you made your dough, but you do have to tell him HOW MUCH you made.
 
RE: "entitlement programs" (that term doesn't really sit well with me..) IMO it is not the programs that are bad, it is the /misuse/ of the programs by some people that take advantage of the system. While those extreme cases have created some negative connotations in the minds of many, I don't think it's wrong for people to get a bit of help if they really need it, and the programs should be there for that. In other words, don't blame the programs, blame the people who misuse them!

heh, sorry for the rant :). I do agree with the poster that said the two party system is BS. A lot of the time I don't like the candidates from either party ;).

Anyway, to stay on topic, I think that taxation (or the lack of it rather) is the biggest reason that the government is against it not that it's allegedly related to drugs and other nefarious acts. If that was the only reason, no one would be allowed to use cash :). Have you guys seen the story about BTC being used for money laundering now? I've no idea how it works outside of what I've seen in movies but it seems to me that USD>BTC>USD would not be the easiest way to launder money, or the best considering the fluctuating exchange rate lol.
 
EvilWays said:
Sadly, I have more faith in the value of Bitcoin over the toilet paper fiat currency that is the U.S. Dollar.
Click to expand...

Then as they say you are "backing" the wrong horse. Bitcoins are a flighty , unpredictable line of currency. They are unregulated and poorly monitored.

The US dollar certain has seen better days but to say its a lower form of currency than Bitcoins is just laughable.
 
kllrnohj said:
Why? The value of gold also fluctuates. It isn't stable, it is affected by speculation, etc... And history has shown that it is a bad long term investment. The place to keep your money is stocks if you want to accept some risk for potential reward, or bonds if you want something safer, but lower return.

"To take an extreme example [of price volatility], while dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars. All this is in real terms, taking inflation into account. Meanwhile, a dollar invested in gold in 1801 would by 1998 be worth just 78 cents."
(from "Basic Economics" by Thomas Sowell)



Why? Just like paper currency, it has no intrinsic value. Paper currency or BTC coins - both are basically the same thing.

Well, not quite. The USD has the US govt protecting it, whereas BTC doesn't have anything protecting it. I'll trust the banks to store my money thanks to FDIC insurance. Do you trust Western Digital to store your money?
Click to expand...



Awesome!

have fun with that
 
kllrnohj said:
Not really. Both paper currency and gold have the same value - which is that they are only valuable because people want them because they are valuable.

Gold is technically a fixed size resource, but it continues to be mined today so in reality both gold and paper currency continue to be "created". Neither paper currency nor gold has any real intrinsic value - they aren't a "useful" resource like food or oil. In the case of a true economic collapse both gold and paper money would, as a result, become useless.
Click to expand...

This is very true, however, Gold will continue to have value to people because it's valued by multiple government. While paper currency only have values when the one government does. It can go the same way as Gold, but it's highly unlikely, since it's man made. Paper currency is usually only supported by one government and other governments just trust that one government to uphold it's value.
 
Doesnt matter if our forefathers didnt envision bitcoins, you have the right to bear coins and no regulation, rewriting, examination, or reconsideration need be done in the advent of such new technologies, or anything else for that matter.
 
RangerXML said:
Here they are bitching about bitcoin when there are plenty of f2p currency and xbox points being used in the US for crimes, drugs and other illegal sales. True, bitcoin has one of the more shady markets out there, including illegal weapon and drug sales online, but look at some of the shit that has been committed in say Eve or Terra over its respective currency. They should just pass a law that outlaws all online currency so you have to use that countries respective currency. I think people will be far less receptive to buying "yuan" (Chinese) from a company like Perfect World (PWE) instead of the more ambiguous "zen".
Click to expand...

I am aware of silky roads / drugs, but please where do i buy illegal weapons?? Id pay 80 bitcoins for a full auto AR15 or something :)
 
RangerXML said:
Here they are bitching about bitcoin when there are plenty of f2p currency and xbox points being used in the US for crimes, drugs and other illegal sales. True, bitcoin has one of the more shady markets out there, including illegal weapon and drug sales online, but look at some of the shit that has been committed in say Eve or Terra over its respective currency. They should just pass a law that outlaws all online currency so you have to use that countries respective currency. I think people will be far less receptive to buying "yuan" (Chinese) from a company like Perfect World (PWE) instead of the more ambiguous "zen".
Click to expand...

Nothing will be as shady or hard to track as hard cash.
 
snaggerpuss said:
What are "major entitlement programs"? I hope you don't mean make the poor pay for it because that would be a drastic mistake. Everytime I hear the word "entitlement" I just know I am dealing with some Republican. You Repubs even have our Herr Harper using the same dialogue now and Canada is not even in financial trouble. I've seen him actually say people should not feel "entitled" to certain social programs. WTF we paying taxes for then? Oh right, so some bitch politician can go stay at the Savoy hotel and order a $16.00 glass of orange juice.
Click to expand...

The republican party and democratic party are largely the same thing except for a few minor differences. Pick your poison.
 
buttons said:
I am aware of silky roads / drugs, but please where do i buy illegal weapons?? Id pay 80 bitcoins for a full auto AR15 or something :)
Click to expand...

You really haven't looked hard enough :-D Search articles on bitcoin and slightly used service weapons, fun article on the circling weapons trade.
 
kllrnohj said:
Why? Just like paper currency, it has no intrinsic value. Paper currency or BTC coins - both are basically the same thing.
Click to expand...
You are right on this.

Well, not quite. The USD has the US govt protecting it, whereas BTC doesn't have anything protecting it.
Click to expand...
Except this "protection" is worthless: it used to be backed by gold, it is now backed by debt and inflation, i.e. your government is working against it.
Bitcoin is protected by cryptography; the inflation is low and known in advance.

I'll trust the banks to store my money thanks to FDIC insurance. Do you trust Western Digital to store your money?
Click to expand...
I think you confuse value and storage of money. BitCoin banks can and probably will exist.
Backups aren't hard anyway.
 
Godmachine said:
They are unregulated and poorly monitored.
Click to expand...
I don't think you even know what you mean by "regulate". You can't decide what your money is worth, others decide what it is worth, like any other product. And the US government does everything to undermine its value.
 
pankkake said:
I don't think you even know what you mean by "regulate". You can't decide what your money is worth, others decide what it is worth, like any other product. And the US government does everything to undermine its value.
Click to expand...

Right , :rolleyes:

I'll tell you what , you feel so damn confident about Bitcoins , put your money where your mouth is and make a serious investment into some. I'm not talking about running a Bitcoin farm , I'm talking about taking your money out of your savings (whatever savings you might have) and dumping it into the incredibly "reliable" currency of Bitcoins.

Once you do that and prove it then I'll admit you are correct. But we both that isn't going to happen is it?
 
pankkake said:
Except this "protection" is worthless: it used to be backed by gold, it is now backed by debt and inflation, i.e. your government is working against it.
Click to expand...

Uh, no.

Bitcoin is protected by cryptography; the inflation is low and known in advance.
Click to expand...

Depends on what you are calling inflation. Bitcoin's *value* is not known in advance, and will fluctuate just like every other commodity based on speculation, demand, supply, etc... It's not a stable thing.

I think you confuse value and storage of money. BitCoin banks can and probably will exist.
Backups aren't hard anyway.
Click to expand...

No, I'm not confusing value and storage of money. The US government is the one doing the insuring for consumers - it gives confidence in trusting banks to do storing. The government is protecting the consumer - protecting the currency. Bitcoin banks do exist already - and they robbed their users: http://www.theverge.com/2012/8/10/3233711/second-bitcoin-lawsuit-is-filed-in-california

Backups *are* hard, by the way. Do you have an offsite backup for bitcoins? What about redundant, offsite backups? Probably not, because that shit gets expensive and hard to maintain. If you think backing up to a network drive is sufficient, you are incredibly wrong - might as well stuff paper money in your mattress, that's about as safe.

pankkake said:
I don't think you even know what you mean by "regulate". You can't decide what your money is worth, others decide what it is worth, like any other product. And the US government does everything to undermine its value.
Click to expand...

1) The US government is not undermining it's value. A small, controlled inflation allows economy regulation via interest rates. The govt isn't undermining the value at all.

2) You can absolutely control what money is worth by controlling it's supply. Perfect example, the USD's inflation is very controlled by the federal reserve. We could quite easily have a zero inflation USD - the problem is that you don't necessarily want that.

Serpent said:
This is very true, however, Gold will continue to have value to people because it's valued by multiple government. While paper currency only have values when the one government does. It can go the same way as Gold, but it's highly unlikely, since it's man made. Paper currency is usually only supported by one government and other governments just trust that one government to uphold it's value.
Click to expand...

Sure, but if the US economy collapses, it's taking out a hell of a lot of other economies with it. We have a world economy now, countries are not isolated from each other.
 
the fact is that paper currency has no value since it's not self dependent. the value of paper currency is decided by the output of resources each countries produces on daily/weekly/monthly/yearly bases (time depends on resources)

as far as bit coins go, if it becomes one of the standard base for world currency this is time for bad guys to cash it in legal way before government of major countries passes new rules for them.
 
Godmachine said:
Right , :rolleyes:

I'll tell you what , you feel so damn confident about Bitcoins , put your money where your mouth is and make a serious investment into some. I'm not talking about running a Bitcoin farm , I'm talking about taking your money out of your savings (whatever savings you might have) and dumping it into the incredibly "reliable" currency of Bitcoins.

Once you do that and prove it then I'll admit you are correct. But we both that isn't going to happen is it?
Click to expand...
Why would I? I have zero US dollars, thank god.
BitCoin is volatile, but it has no organization working against it; this is what you nuts don't want to admit.
Investments in fiat money are *stupid* in any way; my money is in various places not tied to a particular fiat money.

kllrnohj said:
Backups *are* hard, by the way. Do you have an offsite backup for bitcoins? What about redundant, offsite backups? Probably not, because that shit gets expensive and hard to maintain.
Click to expand...
This shows how much you ignore how BitCoin works - yes I have daily, redundant, encrypted, offsite (both offline and online) backups.
So, why are you an ignorant troll? Because 6 months of backups is 5.8 MB, and I don't even need to keep the old backups. I could backup my BitCoin wallet on paper.
 
kllrnohj said:
Backups *are* hard, by the way. Do you have an offsite backup for bitcoins? What about redundant, offsite backups? Probably not, because that shit gets expensive and hard to maintain. If you think backing up to a network drive is sufficient, you are incredibly wrong - might as well stuff paper money in your mattress, that's about as safe.
Click to expand...

The total storage space required for backing up your Bitcoin wallet is minimal. You could use the cheapest 256MB flash drive/SD card/etc, make 20 backups, and it would cost you a couple of bucks.

You really don't know much about Bitcoin, so you need to stop talking as if you do.

And yeah...you're talking to someone who has both invested in BitCoins, and made a profit off of them, through both trading and mining.
 
You must log in or register to reply here.
Back
Top