Hacker News Reader

Comment by jdmitch | Hacker News Reader

When researchers and policymakers begin to have even an inkling of Bitcoin’s deeper significance – more than “anonymous digicash created by evil hackers to buy contraband from drug dealers” – there’s a better chance that banks and governments of the world will start to get serious about cleaning up the global mess they’ve created.

Can bitcoin's unregulatable nature really provide an example for how establishment financial systems should be better regulated? Bitcoin can be an alternative, it seems, but not a "city on a hill" to fiat currencies, and their financial systems.

View on HN

How do you think Bitcoin's unregulatable nature differs from the unregulatable nature of physical cash?

1. Your cash can be devalued by printing more cash: http://en.wikipedia.org/wiki/Quantitative_easing

2. If you move or store cash, it can be confiscated by the police: http://www.pbs.org/newshour/bb/nation/july-dec13/assets_08-1...

Bitcoin is impossible to "print" more than scheduled and it's much easier to transport and store safely than cash or gold.

1) What about gold then?

2) The Silk Road bitcoins were confiscated by police just fine. In fact Bitcoin is in some ways easier to trace and therefore confiscate. If the cops can trace a transaction to you they just apply some rubber hose cryptography.

>1) What about gold then?

It is more easily dividable than gold.

More than 90% of gold value is speculative. This all will move to Bitcoin as it's superior by all measures. Storing and transporting gold is just way too expensive. The universe wants one money: http://blog.oleganza.com/post/54121516413/the-universe-wants...

Rubber hose is more expensive than QE. You can steal one person's stash, but cannot steal from millions at once (well, you can, but it'll be too obvious and very expensive). Just watch zebras crossing the river infested with crocodiles. The fiat currency is when all zebras find themselves in the slaughterhouse.

What makes you think Bitcoin is unregulatable?

1. Politicians can't change the rules of the protocol.

2. Politicians can't print more bitcoin as they like. Only according to the protocol and in competition with others.

3. It's virtually impossible to censor Bitcoin transactions (unless you shut down the whole internet in the country).

1. So what? Politicians also cannot change the laws of physics that govern paper money transactions, yet paper money is regulated.

2. That is not an issue of regulation.

3. The same applies to paper money, and again, paper money is regulated.

I was just listing aspects of Bitcoin that are "unregulatable".

Regulation = laws = rules = instructions to cops when to apply rubber hose.

1. Cash transactions require meeting in person. This makes people more vulnerable to meeting with rubber hose.

2. The value of your paper cash is diluted when owners of rubber hose print more of it.

Bitcoin reduces these threats by more than 90%.

I am sorry to break it to you, but:

1. Politicians make the rules, and the rules can dictate the seizure of the places that offer the government-free version of Bitcoin. (Well, for now the governments may not agree to cooperate on this, but the scenario has realistic prospects.) In this way the governments gets access to Bitcoin's evolution. After this, they can in time change it in wherever way they want and make it at some point incompatible with government-free versions. Mind you, that the bulk of the Bitcoin users will update their version from the most seemingly trusting source, which may be government's.

2. Don't underestimate people in this overly-motivating subject. And the motivated people can become very ingenious.

3. I am not sure if there can be a reason for censorship (a powerful actor can act in other ways against the undesired Bitcoin users), but what it is possible is to learn to filter out Bitcoin activity in particular or everything unknown in general. What is this binary stream? Encryption? Want privacy? Here's the government-provided solution that assures you (government-surveyed) privacy! ;)

Reply on news.ycombinator.com