Tuesday, August 27, 2013

Brian Fung — Inside the Bitcoin advocates’ closed-door meeting with federal regulators

The U.S. government took the latest step toward regulating virtual currencies on Monday as representatives from the Bitcoin Foundation met behind closed doors with federal officials in Washington. Attendees say the meeting was cordial, with regulators listening carefully as Bitcoin advocates warned that excessive regulation could drive innovation in virtual currencies overseas.
The Washington Post — The Switch
Inside the Bitcoin advocates’ closed-door meeting with federal regulators
Brian Fung
(H/t Rohan Grey via FB)

The issue is the balance between privacy and criminality, which is a major one in an open society. Crime flourishes in the dark, and too much light invites excessive government control. Finding an appropriate balance is neither obvious nor simple in many cases.

11 comments:

Unknown said...

What about the capital gains tax since Bitcoin is a money hoarder's dream come true*? It isn't fair for a sane form of private money, common stock, to be subject to that tax when a stupid pseudo gold standard isn't.



*EXCEPT it is not and never should be accepted for ANY taxes or government fees.

Unknown said...

bitcoin is 'equity'

Unknown said...

Equity in what? Once it is widely imitated then just where is the Equity? At least gold has industrial uses. What can Bitcoins be melted down for?

Ryan Harris said...

The problem is nature is on bitcoins side and not on the governments side. No matter how hard the government tries, someone can always encrypt something more strongly than the government can decrypt in a reasonable amount of time. I don't think people appreciate peer to peer. There is no there, there, as they say. The government is flummoxed because normally they would go prosecute a banker for bad behavior or some finance person and threaten to take their bank accounts and dollar balances away. In decentralized "bitcoin", how do you stop two people from trading with one another? How does the government sieze someone elses bitcoin? Send in paramilitary troops and take their software instance? There is no banker to vilify, no one in the middle. That is what peer to peer client means. It means there is no intermediary. There is no one to go after. They can prohibit US banks from interacting with bitcoin or US businesses from using the software to trade with one another but it does nothing of consequence to two people that decide to create trade with each other using bitcoin software. Who are they going to prosecute and on what grounds? As long as the barter is reported on taxes, no laws have been broken. They could look for someone that wrote the software in Japan and try to prosecute her? Go after someone that contributed a few hours or a patch to the software? Criminalize trade in anything besides USD (LOL)? It gets to the essence of a basic freedom which makes libertarians and new democrats very uneasy because they end up having to take each others positions, their normal narratives about liberty and social cooperation get turned on their heads. What a delight to watch.

Unknown said...
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Unknown said...

Taxes can and should be made unavoidable so the dutiful do not subsidize those who aren't. Land taxes are a natural.

Tom Hickey said...

Ryan, same way that organized crime is prevented. Tax evasion, money laundering, and racketeering. Now they have terrorism to add to the list. With total information awareness in place in a surveillance state, it is going to be very difficult to avoid detection since transactions are digital. And no matter the encryption, governments can afford supercomputers. No one is gong to feel safe after a few big busts. If governments want to take someone down, they don't need drones to do it.

The way out for Bitcoin is the same as the banks, which is for Bitcoin firms to use legalized bribery to buy politicians in order to keep government off your back.

But individuals Bitcoin users are going to have the same issues with the taxman that users of cash do, unless one hoards one's stash and never uses it. True, the IRs can't get everyone, but they will get some big fish to send a message, as they did with the barter clubs and barter money.

Unknown said...

F.

"Equity in what?"

Equity in Bitcoin. Bitcoin has a use as a type of 'money' and speculative financial asset.

People don't generally buy gold because of its industrial uses. They buy it to hoard it or use it as decoration/jewellery. For those that buy gold as part of their 'investment' portfolio, it's simply a speculative asset with certain characteristics, like Bitcoin.

Tom Hickey said...

IN both cases the miners' book has the find on the revenue side and the expenses on the RHS along with profit (revenue less expenses). The balance sheet reflects the flows as stocks — assets (the find) = liabilities + equity. So the asset held is not equal to the equity. The miner could lose on the deal if the expenses mount beyond expectations, which is not unusual when mining natural resources. It's not unlikely that some bitcoin miners will show net losses and some negative equity over time, resulting in their dropping out.

I hear noise these days from nerds buying dedicated machines to mine bitcoins not because they are into bitcoin as such, but because it is a nerdy thing to do.

Unknown said...

revenue is on the right hand side, expenses on the left hand side of the income statement.

Unknown said...

does anyone else think it's weird that in accounting, on the balance sheet entries on the asset side are 'debits' and entries on the liabilities side are 'credits', whilst on the income statement expenses are 'debits' and revnues are 'credits'...?