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Comment by moldbug | Hacker News Reader

The agencies fighting against online poker are much weaker; also, poker is a profitable business that can defend itself.

The US dollar is a centralized system. US financial regulation is in effect worldwide (except now Iran, I guess). If you have a decentralized system dependent on a centralized one, it's a centralized system.

Bitcoin is not dependent on the USD for its operations, just for its value. The day after MtGox (for instance) is indicted, everyone will be selling and no one will be buying. Also, all payment processors everywhere will cut off all Bitcoin exchanges everywhere.

(Everywhere excluding Iran, I guess. Is Bitcoin big in Iran?)

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Let's imagine that the entire staff of MtGox were to be arrested tomorrow. Their homes burned, the earth salted, etc. So no more Bitcoin to USD trades at MtGox.

But what about your neighbor Bob's place? You buy him dinner, and the next day a string of bits comes your way via Tor (or somesuch.) There is no need to utter the word "Bitcoin" during said dinner. A wink, a nudge, etc. will suffice. The next day, Bob does the same with his neighbor Charlie. And so on.

And, naturally, if Bob were a traitor, he could rat you out to the Gestapo. But he could just as easily rat you out for [insert extremely popular but highly-illegal-in-the-USA activity here.] No digital cocaine required - the analog kind will do. And if you haven't any under your bed, Bob will helpfully leave a kilo in your toilet tank.

Most people have already had plenty of practice exchanging highly-illegal strings of bits. Now they will just need to learn to give each other "free" stuff as well.

Bitcoin hasn't reached the critical mass needed for this kind of thing, but there is no reason why it could not.

Consider hawala (http://en.wikipedia.org/wiki/Hawala) which is doing quite well despite draconian bans. On which currencies do hawala transactions depend? All of them and none of them.

> (Everywhere excluding Iran, I guess. Is Bitcoin big in Iran?)

I wouldn't say 'big' exactly, but the participation is non-zero: http://blockchain.info/nodes-globe?series=48hrs

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