BitCoin will be made illegal, but cryptocash is here to stay | Hacker News Reader

BitCoin will be made illegal, but cryptocash is here to stay

dbasch.posterous.com

15 pointsdiego14 comments

The problem with all of these e-currency schemes is that there's still a huge divide between the virtual e-cash world and the real "bills & change" world. I can't use Bitcoin to pay my rent or buy food. In order to do that, I have to go through a money transfer site. These sites are already pretty heavily regulated. I'm not even sure that any additional laws would have to be passed in order to make Bitcoin illegal; it might just take an administrative decision by the Treasury department.

More important, you can't use it to pay your taxes.

This looks like a plus :)

There is at least one person selling gift cards for bitcoins, including Walmart and Amazon giftcards. Also there is at least one site selling food directly (http://www.bitmunchies.com).

So you wouldn't strictly starve...

I don't really think BitCoin will be made illegal, simply because there's no real reason to do so. As a concept, I find it interesting; however, I consider the execution to be flawed in several ways (namely the entire concept of mining).

In order to become a force which could get attention, BitCoins would need to be used en masse for nefarious or questionable purposes (the definition of those being whatever politicians decide they are). Right now the volume is extremely low and quite frankly you're not going to conduct large scale illicit activities in that system easily. If it hits $50bn in volume however, then something might happen.

For me I see the seminal (forgive the pun) flashpoint being when pay-per-use pornographic web sites take BitCoins for services rendered.

The value proposition of anonymity is highly valued there I suspect.

Prior to that occuring, I expect there would need to be a service that pornographers would 'buy' as enabling this as a valued currency.

So once we see the emergence of a referral system or advertising system in which you can 'pay' for ads with Bitcoins I don't doubt we'll see sites that accept Bitcoins as payment.

We are considering enabling BitCoin in countries where Internet is now owned by the government in same way as US, Russia, and China mainly. FIrst off: Sweden and Netherlands in such case - a safe card.

...and to clearify (a bit at least): We have built a de-centralised e-commerce system that will work where web standards work.

It reminds me quite a bit of mp3 files in 1997, when they were just a novelty and record companies didn't know what to make of them.

Despite those industries' efforts and help from various world governments, MP3 filesharing, still exists. Likewise, it seems possible that BitCoin exchanges will still happen despite it being illegal.

Is there a way to even shutdown BitCoin or would it turn into a pseudo-arms race like filesharing has become?

I checked bitcoin's site a little, and I don't quite understand how do you get bitcoins in the first place... or more important, how the global amount of bitcoin currency evolves.

There are only three ways to get bitcoin:

1. Create (discover) bitcoins using your own computer. This is slow and requires a lot of processing.

2. Provide a good or service in exchange for bitcoins.

3. Receive them as a gift.

That is all. I've ruled out theft, i.e. stealing someone's wallet from their computer.

That answers your first question. The second question, about how the supply evolves, is more complex. My understanding is cursory, but I'm pretty sure the bitcoin.org web site addresses it in depth.

Just have some fun and try it out. No need to put your savings into BitCoin or anything, but you can check out http://freebitcoins.appspot.com/ to get a 0.02 BTC to just see how things work.

It will be interesting to if global inflation follows the usual pattern in bitcoin.

See http://www.bitcoin.org/wiki/doku.php?id=inflation_controls

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