So governments are going to shut down bitcoin- as I understand it, this is done by making it illegal to use bitcoin in otherwise legal transactions. That seems like the kind of thing that'd tank the value of bitcoin, making it useless. On the other hand, there aren't too many places that you can spend bitcoin right now anyways- maybe it'd be an empty gesture?
How is the government going to shut it down? If a government makes it illegal to use bitcoins, this is hardly going to stop their use. This is an article about drugs here, right? Has prohibition stopped the illegal trade of drugs?
Forcing bitcoins into the black market may have the opposite effect on their value. Since no national border can stop a digital currency, it wouldn't be a problem to convert a bitcoin into a "legal" currency as needed.
If I used bitcoins, it would be for otherwise legal transactions. I might sell my software for bitcoins and pay for hosting, advertising, and development in bitcoins. It bitcoins become illegal, I wouldn't consider using them for any of those purposes. I have too much to lose and very little to gain by accepting and trading in bitcoins. The underground economy is huge, but it's not an economy I participate in. I look to bitcoin as just another means of exchanging value with people, not as a way to buy drugs or launder money.
For the sake of thinking it through, how exactly would a government get rid of bitcoin?
I imagine they'd make it illegal to accept bitcoins as payment, which would remove all legitimate users from the market, but illegal drug buyers and sellers may still use it as payment, along with underground bitcoin/cash currency exchanges.
The anonymity of bitcoins may prove to create great enough demand, and help decentralize the illegal drug trade.
I imagine they'd make it illegal to accept bitcoins as payment, which would remove all legitimate users from the market, but illegal drug buyers and sellers may still use it as payment, along with underground bitcoin/cash currency exchanges.
Sure, but now you've gotta participate in two illegal operations instead of only one. Instead of exchanging cash for drugs you're now exchanging cash for bitcoins and bitcoins for drugs. You've doubled your chances of getting caught. And unlike the drug dealer, the cash-to-bitcoin converter doesn't have much of a profit margin, so what the hell is his incentive for staying in this illegal business?
What would an underground bitcoin/cash currency exchange look like anyway? A smoky room? There's no way to anonymously and untraceably recieve cash on the internet, is there?
Attacking the methods of conversion might be the most expedient route.
For instance, for those in the US, the most sane method of exchange for US currency is setting up an account with Dwolla tied to your bank account, then use that to transact thru MtGox. Dwolla is US based. Your financial institution is US based. If you have difficulty getting money in/out, or that becomes strictly a black market activity, well it will likely sink the value of bitcoin.
Isn't calling this the Libertarian dream a bit of a strawman fallacy? The title is needlessly provocative and potentially insulting. It's an interesting enough topic/piece with out the political slander mixed in.
Someone who advocates for legalized drugs is no more a supporter of the illegal drug trade than someone who advocates lower taxes is a proponent of tax evasion. This is a silly and insulting conflation.
Likewise, someone who advocates for legalized private currency isn't a supporter of illegal, black-market currencies designed for hired crime, money laundering and tax evasion. The disconnect is even greater when you consider that Ron Paul, and advocates of "sound money", advocate for commodity backed currency, while BitCoin is backed by nothing and is as "unsound" as money can possibly get.
As a Libertarian / Anarcho-capitalist myself, I didn't see it as insulting at all. In fact, I do dream of a totally free marketplace where anyone can buy and sell whatever they want, anonymously if they choose, so long as they aren't violating anyone else's rights in the process.
And if you narrow it down a little more still, and think in terms of the "techno-libertarian" mindset, something like this probably is pretty close to a "dream" to many techno-libertarian types.
That said, it probably wasn't necessary to put the Libertarian bit in the headline. Whether it was intended to be insulting to Libertarians or not, is unclear to me.
Yes, it would. But a pragmatic libertarian of the "techno libertarian" cyberpunk influenced mindset, would probably see this as a positive thing... reasoning that "if we have bogus laws on the books, at least we can come up with technological means to try and circumvent them."
Eventually, you do need to complete the transaction in the real, right? These aren't virtual drugs. The FBI can pose as drug dealers, collect your bitcoins, and send agents to your door instead of drugs if you're in the US.
Bitcoins may be a better candidate for selling virtual goods like stolen credit card numbers, security exploits, and secrets. But even then the money/goods from cashing out bitcoins have to go somewhere. If some dude goes from broke to millionaire with a single large deposit and he's going to be on the fed's radar for life.
The coins are a mechanism for laundering. My point is you can't launder goods. Heroin is heroin is illegal no matter how you came about it. You could have gotten the drugs for free without cash, credit, bitcoins, goats, bushels of corn, or anything. It's still illegal to have heroin.
With Silk Road, the drugs have to go somewhere. And there's probably a paper trail leading to the origin of the package as well unless the dude is driving across the country before dropping it in the mail Ted Kaczynski style.
Still, I wonder if this circumvents some of the law. If you can't prove I paid for some drugs, am I less likely to be prosecuted? If a random shipment of drugs showed up at my door with no transaction to match them with, am I even at fault?
If so, I imagine politicians, police chiefs, judges, etc., will begin receiving gifts in the mail on a regular basis. Anyone with enemies, of any sort and for any reason, could be targeted.
People have been raided based on where a package was shipped, in absence of proof of payment (I recall reading a story, I believe linked from HN, about a family whose dog ended up getting killed in the resulting raid, following a box of drugs being delivered to the wrong house as part of a sting). Anonymity just makes it really easy to get away with setting people up.
Really? It's a Libertarian's dream to have a site where you can buy drugs with a virtual currency? Please, troll, take your childish political insults to digg or reddit.
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[ 5.2 ms ] story [ 82.1 ms ] threadI imagine they'd make it illegal to accept bitcoins as payment, which would remove all legitimate users from the market, but illegal drug buyers and sellers may still use it as payment, along with underground bitcoin/cash currency exchanges.
The anonymity of bitcoins may prove to create great enough demand, and help decentralize the illegal drug trade.
Sure, but now you've gotta participate in two illegal operations instead of only one. Instead of exchanging cash for drugs you're now exchanging cash for bitcoins and bitcoins for drugs. You've doubled your chances of getting caught. And unlike the drug dealer, the cash-to-bitcoin converter doesn't have much of a profit margin, so what the hell is his incentive for staying in this illegal business?
What would an underground bitcoin/cash currency exchange look like anyway? A smoky room? There's no way to anonymously and untraceably recieve cash on the internet, is there?
For instance, for those in the US, the most sane method of exchange for US currency is setting up an account with Dwolla tied to your bank account, then use that to transact thru MtGox. Dwolla is US based. Your financial institution is US based. If you have difficulty getting money in/out, or that becomes strictly a black market activity, well it will likely sink the value of bitcoin.
They go after Mt. Gox.
They go after the very small number of payment networks that let you trade Bitcoin for coin.
This may push the trade of bitcoin underground, or more likely push both of the drug dealers using bitcoin to use actual dollars.
Ron Paul spoke in favor of drug legalization[1] and is highly critical of the US monetary system[2].
[1] http://www.youtube.com/watch?v=LMIgT_NGgek
[2] http://www.ronpaul.com/tag/monetary-system/
Likewise, someone who advocates for legalized private currency isn't a supporter of illegal, black-market currencies designed for hired crime, money laundering and tax evasion. The disconnect is even greater when you consider that Ron Paul, and advocates of "sound money", advocate for commodity backed currency, while BitCoin is backed by nothing and is as "unsound" as money can possibly get.
http://www.avaaz.org/en/end_the_war_on_drugs/
Please avoid introducing classic flamewar topics unless you have something genuinely new to say about them
And if you narrow it down a little more still, and think in terms of the "techno-libertarian" mindset, something like this probably is pretty close to a "dream" to many techno-libertarian types.
That said, it probably wasn't necessary to put the Libertarian bit in the headline. Whether it was intended to be insulting to Libertarians or not, is unclear to me.
Bitcoins may be a better candidate for selling virtual goods like stolen credit card numbers, security exploits, and secrets. But even then the money/goods from cashing out bitcoins have to go somewhere. If some dude goes from broke to millionaire with a single large deposit and he's going to be on the fed's radar for life.
With Silk Road, the drugs have to go somewhere. And there's probably a paper trail leading to the origin of the package as well unless the dude is driving across the country before dropping it in the mail Ted Kaczynski style.
People have been raided based on where a package was shipped, in absence of proof of payment (I recall reading a story, I believe linked from HN, about a family whose dog ended up getting killed in the resulting raid, following a box of drugs being delivered to the wrong house as part of a sting). Anonymity just makes it really easy to get away with setting people up.
Every Libertarian I know is in favor of decriminalizing most drugs but not a single one is a drug user himself.