Schumer Bashes BitCoin, Wants to Shut Down Silk Road Drug Site
betabeat.com
betabeat.com
(That's what the government hates the most: things that make it easy to subvert it. If you can subvert the government in some super difficult manner that requires a lot of effort, they don't care so much. If you can type in your paypal id and have anonymous money... that's too easy, and it makes them mad.)
You can't be forced: http://news.cnet.com/8301-13578_3-9834495-38.html
You can be forced: http://en.wikipedia.org/wiki/United_States_v._Boucher
Though, in the latter case he had previously given access to his system.
http://www.aclu.org/national-security_technology-and-liberty...
The authors of the Federalist Papers were against a specific enumeration of individual rights because they feared that those rights would become the only ones we had. They were prescient in some ways, but I doubt any of them foresaw the entire Constitution being suspended.
Another theory I do not recommend testing in court.
Bitcoin is designed to be subversive, and subversive means illegal as far as the government is concerned.
This is the main/only reason I'm not making any long term investment in Bitcoin.
I see government control over money as basically an immovable object - I don't think so-called constitutional protections mean anything when it comes to governments doing what they feel is necessary to maintain control. Internet freedom and encryption are not as much of an irresistible force as net-romantics would like to think.
If anything can force governments into legislating backdoors into all encryption systems and creating a clearly established set of "choke points" for control of data flows, it is the possibility of Bitcoin and other crypto-currencies to render basic imperatives of the modern nation state impossible to enforce.
It is more or less infinitely depressing to me, because as much as I would like to believe that the "good guys" are going to win, I doubt it. People generally don't realize how much we are already living in a dystopian panopticon, and Bitcoin is one of the rays of light shining through the cracks in the prison walls.
What is even more depressing to me is my own cowardice. I am too scared of the US government to even try to resist in any way, no matter how trivial. I would like to participate in Bitcoin and other projects, but I don't want to end up in a federal prison for conspiracy to assist in money laundering and tax evasion, as I imagine that any participation in Bitcoin will be interpreted by government prosecutors of the near-future.
Fyi, governments don't control money, the international reserve banking system does, centered on the Bank for International Settlements (BIS.org). Governments' enforcement arms are just their proxy. They'll be even less likely to tolerate an upstart competitor like bitcoin.
Another interesting tidbit. Imagine that bitcoin became the de-facto currency. Not only would the government be unable to tax, it would also be unable to control the financial systems it uses to affect markets. For example, the government can print a small amount of money for itself without causing hyper-inflation. This "inflation tax" would also be noncollectable. Further, the federal funds rate would be useless.
1) Modern workers are not owned from birth.
2) Debt is not forced upon you against your will, debt is a choice.
3) The alternative to choosing debt is not getting whipped nor killed.
4) Bankruptcy is neither getting whipped, nor killed.
Debt for an individual is a choice. However our monetary system mandates that some people or entities must always be in debt. If there were no debt there would be almost no money in circulation.
So while you say that debt is a choice, it is impossible for everyone to be debt-free. If everyone stopped borrowing (consumers, industry and government) in this country, we would have a complete economic breakdown.
This is like saying smoking is a choice: from the perspective of the single potential smoker, it is. From the perspective of the marketer this is unimportant as they don't need you to smoke, they just need some people to smoke.
Sure, you can use Tor, launder your bitcoins, and effectively become untraceable, but how many people actually do this, and do this correctly? Even Lulz Security, who presumably have a reasonable degree of technical expertise, didn't bother to use Tor when talking over IRC.
Also, Silk Road is kinda ridiculous anyway, because despite all that security and anonymising, in the end you have to give out a physical address that you'll visit in person.
I don't have to be routing packets for you to find all this out; every transaction goes to every node.
There are "laundering" services which try to play a shell game with addresses, but I think they're probably easy to reverse-engineer, at least probabilistically if not completely.
OTOH, unlike IPs, you can't pinpoint addresses to any location though or find out who owns what addresses for sure. I guess they're more pseudonymous than anonymous.
The wallet provider could, in principle, be subpoenaed / coerced /hacked / owned by the NSA. I imagine there will eventually be a Tor-like "onion" anonymization method, where bitcoins are routed through multiple such services, so that no single service need be trusted (except to not steal your money). The main challenge with these techniques is avoiding forms of traffic analysis, where I notice B$98.23 heading from A to B, and shortly thereafter, B$98.22 heading from C to D, and infer that these represent a single transaction chain despite being disconnected in the block chain record. Such attacks can be minimized by, e.g., settling on a fixed transaction amount for all transactions with a given service, and adding random delays commensurate with the transaction rate and degree of anonymity required.
Today's exchange rate range is 16.45 to 19.23. That's pretty typical, and some days are a lot worse. In the forums, the consensus seems to be that any attempt at economic analysis is largely a waste of time due to there being way too many unknowns. The Bitcoin "investors" and "speculators" just look like gamblers to me. That qualifies as "nuts" to this coward.
However, I do like insulting people.
Just because something is anonymous doesn't make it inherently bad. It's how you use it that can make it bad. If hackers can hack into sites anonymously, it doesn't mean we should ban all anonymity.
Even more amazing, said Schumer, is that users rate their delivery performance and the quality of the drug on the site.
Democracy should exist to create/manage public goods, not private ones. A drug or an electronic store of value that a group of adults voluntarily use isn't any of my business. Everything is Schumer's business, apparently.
Much better if the kids go to a real movie theater and pay $20 to eat artificial popcorn covered with artificial butter and wash it down with artificial sugar water.
http://ansuz.sooke.bc.ca/lawpoli/colour/2004061001.php
All money is not created equal - there are host of laws related to taxation, tracking, and legality that apply to real-world currencies. Bitcoins are great because they have none of this baggage, but bitcoins are also a political non-starter for the same reason.
I.E. it is already being actively used to launder money.
Laundering isn't particularly difficult anyway. You're probably still just better off buying a bar and pouring vodka down the drain.
#1 get the money into bitcoin. How did you get it there in substantial quantity to begin with? There may be $100m of it in supply but how many people have a hundred k bitcoins they will readily exchange for cash? It has to be cash, if you put the money in a bank it's easily traced and therefore pointless.
#2 get the money out of bitcoin in such a way that you can pay taxes on it. Since you presumably can't buy houses, cars, or jet skis with bitcoin it's not very useful there. Even if you could buy a house or car, you'd still need to file taxes since the government can easily see that you bought a $500k house while claiming 0 income. The whole point of laundering money is to pay taxes on illegally gained cash so you can spend it. (Tax evasion is its own separate crime and industry, and I suspect bitcoin isn't very useful there either.)
So now you have to start a shell business that you can claim made all of those proceeds in bitcoin. It has to be one that doesn't legally require you to KYC (banking industry slang, meaning gather relevant info about the people you do business with) and report to the IRS. Then you have to find people to buy the hundreds of thousands of bitcoins from you.
Far easier to start a bar, buy alcohol, pour it down the drain, and claim you sold it. If I were laundering a few hundred grand a year I wouldn't waste time on bitcoin.
You have to transfer them from a bank account, right?
Even if you got the money in without being traced and spent them that's not laundering, it's tax evasion.
Back to the article, like another poster said, how is a bitcoin-based drug site any different in terms of anonymity than a cash-based one if you have to give your address out at the end anyway?
The idea, in theory, is that the use of BitCoins cannot be tracked by a third party. That is to say, Silk Road, you and your dealer are the only ones who know about the purchase. In theory all three of you do not keep records of the sale, unlike credit card companies, which keep records of EVERYTHING.
> "It's an online form of money laundering used to disguise the source of money, and to disguise who's both selling and buying the drug"
From the article, it's not clear what the "it" refers to; while it's possible it refers to bitcoin in general, it sounds more to me like he's talking about the use of bitcoin on silkroad, in which case I believe his statement is completely factual.
There's really not much remarkable here about bitcoin other than its appearance in a statement by a prominent senator and mention in a mainstream news article. If you accept that the government should be able to regulate or outlaw the drug trade, there's nothing remarkable here at all. I recognize that there is a significant population here who might think that drug sales and use should not be regulated, but the majority of the American public does not agree with you.
Knowing what Bitcoin is and what money laundering is is enough to tell you that he's talking about Bitcoin, not Silk Road.
Legit business can and often are used to launder money, but a drug market cannot.
Nowadays the whole point of sovereignity is that you can issue your fiat currency. Allowing and thus defacto accepting this currency would mean that sovereignity has been granted. And this will not happen.
I mean, it will have to be problematic if they can't even get an IP, right?
And they obviously can't get Bitcoins directly...
Unless you think farmers in Colombia and electric companies in California are going to start accepting bitcoins directly?
When the governments decide to shut down Bitcoin, it will probably be in the "exchanging bitcoins for money" area, since that's relatively easy to regulate. But it's hard to convince Offshore Bank Of Unfriendly Country to not exchange Bitcoins for money in person, so big "dealers" will have no trouble making the trip and getting their cash. This will involve more effort, so prices for goods sold in Bitcoins will increase.
Similarly, if everyone could grow and sell their own pot, prices would come down. Make that illegal, and people want more money for their work. The same effect will occur if cashing out Bitcoins becomes difficult.