That hasn't happened with cash [yet]. Humorously, if the idea of cash was new today like digital currencies are it would be outlawed for our "safety".
This is not a crackdown on virtual currencies--it's a crackdown on unlicensed money transmitters. If they follow the law, they can trade bitcoin without issue.
The only problem I can imagine having with this is if you don't believe in anti-money laundering legislation, which is one of the best weapons governments have against organized crime, human traffickers and terrorist groups.
Police regularly abuse forfeiture. It's a horrible and very un-American thing they have going on. Yet because the money ends up in the police pockets, there's little incentive to fix the law.
http://reason.com/archives/2012/08/10/why-asset-forfeiture-a...
It also needs to be shown that such weapons are not unduly harmful to law-abiding citizens.
Honestly, it's not something I'd thought about much before all the recent government crackdowns on money transmitters. But when I stop to take a look at it, it seems to me that the freedom to exchange money without government interference is close to a fundamental human right.
When I look at it carefully, it seems very very strange that we've accepted that governments have the right to minutely examine what we do with the fruits of our labors.
I get that it's a good tool to stop crime, but so is listening to every phone call. So is recording every move every person makes in public. We're starting to see resistance to movement in those directions, why should our economic actions be subject to the same level of scrutiny?
I'm not ready to throw out the whole shebang, but I've started to think there should be some firm limits.
This should be a simple A/B test in my opinion.
Inspect every single monetary transaction. Measure the results.
Do not inspect every monetary transaction. Measure the results.
Has money laundering and crime increase or decreased? If it has increased, inspect every monetary transaction, assuming all other variables stay constant.
If criminals do know know whether they are A or B, then the existence of the A group can deter crime in the B group. Given the increased scrutiny on A, you're likely to catch more crimes there. That doesn't mean that B doesn't have uncaught crimes though.
Thus your test is fundamentally messed up both coming and going.
This is where you fail.
Let's suppose that monitoring all monetary transactions actually does reduce crime.
But the apparatus for doing so legitimizes similar actions by oppressive governments, which use it to suppress democracy activists rather than terrorists, and in so doing use the tools we built which they would not have had the funds or local knowledge to build themselves. And if you don't care about those people, imagine what happens if our own government should ever turn malicious, or fall under foreign control, and have this ability to prevent our citizens from funding a resistance.
Then there is the danger of all this data falling into the wrong hands. Requiring it to be collected creates a secret which in the aggregate amounts to a national security threat. If you know who is paying whom for what and in what amount, you can commit industrial espionage on a massive scale. You know where strategic weaknesses are because you know which company doesn't purchase reinforcing materials for its products, you know how much capital an important defense contractor has in reserve before it goes into financial straits that impair its ability to operate effectively, you know who isn't insured against specific risks and could be bankrupted if they were contrived to occur, etc.
This is effectively the same trouble as mandating lawful intercept backdoors. The damage you cause by creating immensely powerful surveillance tools that inevitably fall into the wrong hands by far outweighs the cost of requiring law enforcement to use the more traditional methods of catching criminals.
Neither money nor property exist without government. Sure, you can say that bottle caps and a fence might do the trick, but those don't have the same force.
The only time they actually interfere is when they believe crime is going on, which is how things always go.
Are you saying they should be blinded so that they don't accidentally accost people who are not engaged in crime?
> should [they] be blinded so that they don't accidentally accost people who are not engaged in crime?
Given the law above, yes. So they don't intentionally accost people to get their cash.
And, just like Bitcoin, you have alternative illegal ways to obtain cash without going through these AML hassles: trade goods with a individual on the black market.
The point is, cash is comparable to Bitcoin in terms of enabling anonymous transactions. And there are legal as well as illegal ways to obtain both.
The key word here is "proportion." Cash is used in a lot of illegal stuff, but its used legally far more than the illegal. I don't know what the proportion is for Bitcoin, but this answer doesn't that fact. Its a rather poor rebuttal to the issue of Bitcoin being used for illegal activity.
http://www.usatoday.com/story/money/business/2013/05/12/2-tr...