Janet Yellen suggests 'curtailing' cryptocurrencies such as Bitcoin
markets.businessinsider.com
markets.businessinsider.com
What would you call it as?
To be less ambiguous, I'd just say "the second largest exchange in Germany" and ditch Stuttgart.
I don’t think there is much they can do, except shut down companies like coinbase. That would also just lose them tax revenue.
If I were to see such an RFP, I'd bid on it myself.
Scaling that to every taxpayer or even every taxpayer in the largest apartment in Boise would be impossible using the same techniques.
I hope you realize this is utter nonsense.
And the underground economy is a rounding error, if BTC is relegated to the dark web, it will lose 99% of its value.
Sure, the entire ecosystem would take a hit, but also note that many US companies have actually bought Crypto, people recently bought crypto on margin, and, those who still own crypto, can exchange it outside $COUNTRY, and convert currencies.
I think you underestimate how much pressure the US government can put and how centralized the web is.
If:
No legitimate business will accept Bitcoin.
Twitter, Facebook, Reddit ban all mentions or advocacy of Bitcoin
All public Bitcoin exchanges are shut down.
This would severely curtail Bitcoin and likely actually cause a drop in value.
Yes it is probably impossible to ever get rid of something, but for the government, reducing something to a fringe can be beneficial and is definitely something they can do.
This also never chanced so its irrelevant Bitcoin is still as slow as on day one, if you wait for the same number of blocks before you consider it "final".
This is exactly what they would do. They would make it illegal to operate an exchange and go after foreign exchanges with threats against the banks that serviced them. At some you need to get your money into the banking system as government backed currency for it to be generally useful, and they could at least force that to be a multi-step, onerous, and less anonymous process (eg get crypto --> buy physical goods with crypto from the few people that accept cryto for payment --> sell physical goods to get actual money).
At some point this will not be true. See Weimar, Venezuela, etc...
both can be bypassed with tor.
The IRS at el. will be all over this in no time.
There is going to be an terrorist attack made using BTC as funds - a new patriot act and suddenly touching crypto makes you a suspected terrorist.
https://www.occ.treas.gov/topics/supervision-and-examination...
1: https://www.wired.com/story/technology-could-end-humanity-ho... 2: https://www.youtube.com/watch?v=EYhEDxFwFRU
This would take many many many billions, not “many millions” as you said.
The daily trading volume for bitcoin is $64 billion.
Buying “many millions” worth of bitcoin would not achieve what you’re proposing.
>Buying “many millions” worth of bitcoin would not achieve what you’re proposing.
IIRC in 2019 "someone" supposed bough BTCs for about 100 million USD in a short time frame and it raised the price by several %. Its not the 100million that moves the market so much is the demand it creates when people see the price going up. No need to buy the bubble just manipulate the market into creating one.
Also 100 million may sound like a lot of money but for a large state this isn't especially if its printed anyway. And they can recover most by betting on falling prices when they let the bubble burst. The people who exits before the bust are the only people who actually have to be "paid" (they made profit) by the an attack. While those who stay in or join will lose everything in the end and cover most of the cost of the attack. Remember after the attack BTC would be almost worthless and the attacker would have sold it all while betting on lower prices. All the people who get liquidated indirectly payed for the attack. Everyone who holds BTC an bought it higher than the end price indirectly helped create the bubble.
You'd definitely need lots of money to do this but that doesn't mean it costs a lot in the end. Most of it is a zero sum game.
But that would be good enough to kill it for almost all purposes. Unlike illicit drugs, there's very little natural demand for Bitcoin to motivate people to risk it if it were illegal, which cuts it off from deriving value from the legit economy. It's also not very stealthy, so it would not be very desirable for the illicit economy, either [1]. A network that only has die-hard ideological cryptocurrency dead-enders on it is dead for all practical purposes.
[1] Right now, it has some marginal use at the interface between the legit and illicit economies (e.g. dark net markets), but if it itself became illicit, I think that would stop.
[1]: https://markets.chainalysis.com/?range=30&asset=BTC#risk-ill...
But, no, they don't. They qualify it here as "Known illicit BTC".
There are two 800lb gorillas in the room though
1. Tether manipulation of Bitcoin https://coinlib.io/coin/BTC/Bitcoin refer to the Money flow diagram. There are plenty of other HN stories on the Tether situation
2. How long will the US dollar remain as the world's reserve currency? For context, https://www.principles.com/the-changing-world-order/ This is probably a big reason for this announcement.
Another punny point: drug dealers that are following the Ten Crack Commandments[0] shouldn't be frequent users.
[0] https://en.wikipedia.org/wiki/Ten_Crack_Commandments#:~:text....
Not that I don't believe you, because that looks very plausible to me, but do you happen to have any source/article on that would go into more details?
https://news.bitcoin.com/65-of-global-bitcoin-hashrate-conce...
https://www.forbes.com/sites/rogerhuang/2021/12/29/the-chine...
And more direct proof:
https://asia.nikkei.com/Spotlight/Caixin/How-illegal-online-...
https://www.thehindu.com/news/national/ed-arrests-cryptocurr...
https://www.forbes.com/sites/bryanrich/2019/05/14/bitcoin-is...
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From what I understand, there's two reasons Bitcoin money is popular in China. 1. Corrupt oligarchs with access to subsidized electricity can setup mining farms and basically print money. 2. Corrupt oligarchs with their money stuck in China can setup clandestine mining farms, and thereby exchange their yuans -> electricity/equipment -> BTC -> Vancouver/Sydney/London/...etc apartments.
I don't know if there are any good analyses of the volume of this trade, but the general assumption is that it's huge, the reason being that it's a relatively easy way around government restrictions.
A better reason for change: How about the fact that the Bitcoin network is currently estimated to use over 7 nuclear plants worth of electricity and that a single transaction uses like 6 households of daily electricity? The carbon footprint of Bitcoin is something like the city of Las Vegas. Can we fix that?
HAHAHA. That's where I ended the reading, as I know the pattern. Its just virtue signaling of finance world and politics. They are preping for taking control over the crypto sector. As it is actually starting to threat whole financial system, since companies are starting to put more faith in BTC as value store.
That is actually scary concept for government... well central bank and fed actually, since those guys know whats going on.
Anyhow the same people will be later saying 'free market this' 'free market that' on the next issue. Even though its absolutely contradictory.
https://www.stlouisfed.org/publications/central-banker/sprin...
>"And I think we really need to examine ways in which we can curtail their use and make sure that money laundering doesn't occur through those channels."
Yuck, as much as I hate this argument, which is basically just the "think of the children" argument restated, I'm rather convinced that Yellen's point is true.
There are no legitimate uses for bitcoin that I can think of, other than:
- An instrument for speculative investing
- Sending money to dissidents in other countries
Neither of these seem like high-priority use cases that will suffer unduly from more regulation. By contrast the primary use case for bitcoin seems to be riding the speculation bubble, followed by buying stolen accounts/credit cards/identities and illegal drugs.
The real is issue is how long will the US dollar retain its status as the reserve currency? and what will take its place?
Facebook is trying really hard with Diem
> Sending money to dissidents in other countries
and the uses that Gladstein mentions. So I wouldn't say that he "clearly disagrees".
Also I guess making simple transactions complicated for cool nerd points.
There are others as well...
>By contrast the primary use case for bitcoin seems to be riding the speculation bubble, followed by buying stolen accounts/credit cards/identities and illegal drugs.
Do you have any evidence of how prevalent this is on the network?
As predicted just two days ago[1], Bitcoin (and decentralisation in general) will be attacked under the guise of it being a vessel for circumvention of financial establishment right-wing censorship. "We must regulate it to prevent fundraising for another insurrection".
As future devaluations for the dollar are basically guaranteed, it makes sense for the Treasury and Fed to nullify any alternatives that would interfere with their policies. No one who really matters has their net worth tied up in crypto (yet) - the entire market can be vaporized with no meaningful political fallout. The government cannot abide some future where Jeff Bezos or Elon Musk or Goldman Sachs has a majority of their assets outside of fiat currency - this would represent an existential threat to the model of governance.
A lot of large media outlets reported that Deutsche would stop lending to Trump, but left out how bad it is if even Deutsche won't lend to you.
God bless the developers and cryptographers who are continuing on the good fight. And good luck to them too, because as their technology gains influence and threatens to usurp todays power, they will face resistance. Maybe the original authors of the protocols saw this coming, which is why they used fake identities like Satoshi Nakamoto, or Nicolas van Saberhagen.
I'm less worried about it becoming illegal (what are you going to do, ban math?), and more worried about the networks themselves getting compromised.
Fancy cryptographic techniques won't do much good here. You can already do much of the same thing with cash, which is also untraceable. What the government ended up doing is essentially saying that any cash transaction over a certain amount is considered suspect until proven otherwise. For instance, a bank isn't going to allow you to deposit $50k in hundred dollar bills.
Hold their beer!
The Indiana Pi Bill shows that even math is not off the table for ambitious legislatures.
edit: welcome bitcoin bagholders/downvoters!
Laws versus tech, the law almost always wins (one of the few scenarios I'm familiar with where tech "won" was the reversal of PGP being treated as an export restricted munition [1] [2]). Tech is just a tool, and the arguments for crypto currencies compared to traditional fiat digitally represented (Central Bank Digital Currencies aka CBDCs [3]) just aren't that compelling (especially with countries, 54 so far more on the way, continuing to roll out instant payment networks [4]). This emboldens the very real observation Ms Yellen makes that crypto exists to obfuscate the transfer and storage of value against the intent of government financial regulation.
[1] https://en.wikipedia.org/wiki/Export_of_cryptography_from_th...
[2] https://security.stackexchange.com/questions/55023/what-was-...
[3] https://en.wikipedia.org/wiki/Central_bank_digital_currency
[4] https://empower1.fisglobal.com/rs/650-KGE-239/images/Report_...
What seems more likely is KYC regulation for transactions and SEC review for ICOs. If this happens, Bitcoin will skyrocket in value as it crosses into the mainstream.
(disclosure: minor HODLer since 2013)
That makes gold less useful as a currency than cocaine, ammunition or ram sticks.
Good luck fighters...
Yeah Janet Yellen the famous Marxist... wtf??
If you want to set up your own currency, you also need to set up a legal system to resolve disputes, a law enforcement system to enforce judgements, and a military to ultimately defend all these other systems.
Crypto seemed like it had to reinvent the wheel of the financial system, with all its pitfalls. Turns out the rabbit hole is much deeper than that.
I can see a strong argument for governments to be intrinsically against something that takes away their own power. On the other hand, if that thing takes away the power of their rivals more, there's no reason for them to see it as a net win and act accordingly.