So if you want Bitcoin (or any cryptocurrency) to have wide legitimate adoption, you have to play by the rules. Governments basically exist for the purpose of enacting economic regulation; so to pretend they don't have a right to do so is a little silly.
No company within the EU perhaps, but that doesn't mean you can't just send the money to a russian exchange like BTC-e who really doesn't care what the source is and accepts things like webmoney, libertyreserve, etc. Which are trivial to get into if you know what you're doing.
And have very few protections for consumers, and the percentage of the population that "know what [they]'re doing" is actually pretty low.
So yeah, if you're into criminal activity it's still pretty easy to do. But it also means it's easier for law enforcement to watch those avenues of access to catch criminal activity in the act.
Unless you succeed to make them ship "some products" to you in some other country where BTC is "legitimate" such a transfer would be one-way only.
That's not a point that bothers me. I understand that I can easily get my money into a Russian or other such exchange.
What bothers me is being a UK citizen, what can I do with that money?
>>Just trade it and draw it to your bitcoin wallet.
What to trade? How to purchase physical goods? e.g. a TV or something else?
Can I at least get my money back in the form of other tradable currency in the UK?
I don't see a way to use bitcoins outside the drugs market as far as purchasing physical goods are concerned unless the government approves bitcoins. Please correct me if I am wrong.
edit: typo, clarification
Using BTC-e is essentially rolling the dice. The Russian/Bulgarian operators can disappear at anytime they like with the entire current volume they are anonymous and also not insured, existing on rep only which doesn't mean very much. They could easily put up a million worth of bitcoin as insurance somewhere held in a trust and refuse to daily trade over that insured amount, that they don't says they plan to just disappear one day.
Sorry, I meant PerfectMoney. Are they at risk of disappearing? Probably, but it's essentially an exchange medium to you.
> Using BTC-e is essentially rolling the dice. The Russian/Bulgarian operators can disappear at anytime they like with the entire current volume they are anonymous and also not insured, existing on rep only which doesn't mean very much. They could easily put up a million worth of bitcoin as insurance somewhere held in a trust and refuse to daily trade over that insured amount, that they don't says they plan to just disappear one day.
You don't need to have money in the exchange for that long, just move it in and out. Yes, it's a risk, but a fairly small one as long as you don't store money in the exchange long term.
Out to where? Your EU bank account? Oh wait..
You can compare this to most laws - people have the capability to break the law, but sufficient enforcement reduces the incentives to do so to the extent that for many classes of crime the number of people who commit them is pretty small.
In particular, if all businesses dealing with bitcoins are required to KYC and large transfers are tracked and prosecuted where possible, then there probably would not be a huge amount of anonymous transfer.
Or, more likely, a huge number of bitcoin businesses will go where these laws don't exist and interact with other services to get in.
I've managed to avoid any exchange that follows KYC practices with no issue so far.
That's because no-one has made a serious effort to regulate this so far. I'm not arguing that there wouldn't be grey market bitcoin exchanges operating on a pirate-bay like basis, just that a serious attempt at regulating would have a serious effect on how bitcoin is used.
This is even leaving aside ideas where a government could declare particular bitcoins to have been involved in illegal trading and claim the right to confiscate them from anyone under their jurisdiction.
I imagine that this would take the same form as money laundering regulation, which while not perfect still has a massive effect on how easy it is to launder money.
Some places certainly have, it's just that you'd basically need a global effort between many countries to do so to have any real effect. Until then most of these regulations are just a joke.
That didn't stop them to start the war on drugs and spending trillions on it.
For IRC/forum trades they would do periodic crackdowns posing as phony buyers and arresting/fining the seller to scare away enough casuals that only a handful continue to offer it, effectively shutting down any threat of mass bitcoin adoption to their tax cartel.