Crypto-anarchism to be exact. http://en.wikipedia.org/wiki/Crypto-anarchism
In high inflation economies like Argentina for example where foreign currency is strictly controlled, people are starting to save in bitcoin to preserve their wealth. I've heard that one can get a very good exchange rate for bitcoins in Argentina.
Example 1
"We're buying your house (whether you like it or not), how many Bitcoins do you want for it?"
"10,000"
"Great. By the way, we just made a new law that says we can pay you in peanut shells as a substitute for Bitcoin, at the same rate."
Example 2
"We're buying your house (whether you like it or not), how many Bitcoins do you want for it?"
"10,000"
"Ok here's your 10,000 Bitcoins"
(10 minutes later...)
"By the way, under the PATRIOT act, we're ordering you to hand over all your encryption keys. Including the private key of your Bitcoin wallet. If you don't make a fuss, we'll be nice and let you keep 1%, and not throw you in jail."
This doesn't mean that something like this will never happen, but I don't think anyone's expecting a perfect solution.
Of course, there are people who believe that the existence of legal-tender laws is equivalent to jackbooted thugs breaking down their doors and holding guns to their heads. But those people probably aren't worth paying much attention to.
I can't speak for others, but both of those (particularly the former) make /accepting/ BC interesting to me. Although, admittedly, not so interesting that I'm seriously pursuing it yet.
The more traction BC gets, the higher it goes on my priority list.
From my (admittedly naive) viewpoint, the elephant in the room is the anonymity. Governments won't like this because it makes it harder for them to monitor and catch bad people, and to ensure I'm paying my taxes. So when governments become aware of bitcoin there is going to be huge pressure to shut it down. And they could do it, no matter how decentralised and trans-national bitcoin is. Imagine MAFIAA tactics but ten times worse, with constant media reports of how bitcoin is the currency of the terrorists and child pornographers.
But that's where this announcement is exciting. By tying your bitcoin address to a bank account, you lose anonymity but gain legitimacy. And governments then have the option to selectively legislate, instead of simply killing bitcoin completely.
Interesting times...
I agree with you on simplifying payment processing, but what exactly is financial privacy good for except tax evasion? Is there an epidemic of Visa/Mastercard/AMEX selling purchase histories to advertisers or something? Isn't that illegal?
It helps protect the establishment and preserve the status quo. That's about it. It would be in most people's interest for these things to be public.
The main payment processors operate a mafia of sorts - it's a closed shop - tx fees are fixed and determined by them. One aspect of bitcoin is that is allows the person sending a payment & the person processing that payment (the mining pools) to negotiate the price. The theory being that transactions with a better tx fee will be included in blocks quicker than those that don't.
By freeing up these aspects of the systems we use to send & receive payment - you allow other forces to come into play.
Cash is anon as cryptocoins are.
If you could, I am sure few people would have bothered with crypto-currencies, or for that matter, paypal...
If you're sane and keep backups then your wallet is safe.. Your HD crashes and you don't have backup.. bye bye funds.
Bitcoin in many ways is equiv to cash - just electronic - it's an anon as cash is, as mutable as cash and prone to loss if you don't take care of it.
I like it - as a concept it has some nice attributes.
If you want to launder money, it's extremely stupid to use a form of digital cash in which all transactions are public and any amateur data miner can have a go at tracing the transactions.
By making a transaction with an address you're not just telling anybody who knows you own that address that you've made a transaction; you've allowed anyone who later discovers you owned that address to prove you made that transaction, for the rest of history.
But as someone pointed out in another HN thread, there is always a risk the tumbling service could be a legal risk if it's even taken over by a state entity, because they could technically know which wallets are being used.