Bitcoin Comes Under Senate Scrutiny | Hacker News Reader

Bitcoin Comes Under Senate Scrutiny

blogs.wsj.com

32 pointscdvonstinkpot50 comments

My favorite recent twist of events is that the US government now has the Bitcoin address with the largest balance: DPR's seized coins held by the FBI.

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4...

Largest known balance right? Satoshi might have some unknown amount stashed away...

The location of all Bitcoins, and therefore the address with the most Bitcoins, is public knowledge. This is an inherent property of the system. If anybody tells you Bitcoin is anonymous, they haven't the first clue how Bitcoin works. Run away as quickly as possible, for they are dangerously clueless.

While blanket statements like that sound true on their face, I think it's safe to say that an unknown person may have a large number of coins spread over a lot of wallets. Especially people trying to hide their total balances, including people using tumblers.

The original assertion was about a single address having the most coins, which is true.

His statement doesn't just "sound true on [it's] face"... It also happens to be completely true. He never made any assertion or even alluded to the idea that someone couldn't spread balances over multiple addresses...

You're statement is an unnecessary unveiling of a ridiculously obvious possibility which comes across as braggadocios and condescending.

It's a question of audiences.

To an expert on bitcoin, the description of "the address with the most Bitcoins" is self-explanatory and, yes, has one well-defined answer that it can be determined from the block-chain alone. If you're this person, I can understand why you think I'm being pedantic, and I'm sorry if I came off that way.

But someone who says "If anybody tells you Bitcoin is anonymous, they haven't the first clue how Bitcoin works" isn't talking to an expert on bitcoin. They're talking to someone that they fear may not know enough to avoid being easily swayed by the kind of inexact language that a non-expert doesn't even know that they're looking for. They're talking to the exact kind of audience that doesn't know that "person" and "address" are not interchangable

This person may then go on to claim, based on this evidence, that (1) no anonymity can ever be obtained by bitcoin (which isn't true in theory or in practise for the reasons I mention) and (2) that we know "who" (as in person, not address) has all of the bitcoins. But that's just not true, and it's a really, really important detail to someone that makes policy decisions, or that wants to decide if or how to use the technology.

It's the same problem with equating an IP address with a human. You may use exact language when you talk about these things, and you may understand that when someone offhandedly points at an IP address on a diagram and says "...but this guy over here..." that "guy" doesn't refer to an actual human being. But you aren't any of the grandparents to this conversation, nor are you the hypothetical uneducated observer (to whom I mean no ill will; we all are, given the right conversation). Most importantly, you're not ninetax, who is clearly referring to a person and not to an address, nor are you nknighthb, who is clearly referring to the notion of an address rather than a person.

Uh, oh. This will either be really good for Bitcoin or really bad. I am thinking the Government are going to try and clamp down on Bitcoin and do their best to get their share of the pie through taxes and whatnot. An unregulated currency has surely got a few Federal Reserve members and those with vested interests in currency on the edge of their seats and on the attack.

Government backing is the last hurdle for Bitcoin. If some rules are put into place that allow its use in the US alone, it'll set a precedent for other countries to follow-suit. It's apparent the Government don't care about how Bitcoin is being used, all they care about is getting their share of the money which at present is zero.

Sure and also money laundering and underground economy.

I'm pretty sure that's what the hearings are going to focus on. They may also throw in a little 'anyone can anonymously fund terrorists!' considering the sessions were called by the Committee on Homeland Security.

They may also throw in a little 'anyone can anonymously fund terrorists!'

"...just like Peter King."

Yeah. I also wonder if in the future people will use bitcoin to keep their cash since Swiss banks are not as independent as they used to be anymore.

You bitcoin guys think you can push buttons on your computer and code around the system. So naive.

Sorry to be a pessimist, but they can just say anyone transferring bitcoin to another party without going through a KYC compliant intermediary is money laundering and then send the swat team out to whatever ip they can track down via NSA whatever. Game. Set. Match. Banks win as usual, all done. They'll take it down just like Pirate Bay, etc.

Can someone tell me how people think the cryptonerds can win here? I'll be over here munching on my popcorn thank you.

Piratebay isn't down?

They'll take it down just like Pirate Bay, etc.

I think you have unintentionally predicted exactly what will happen.

Sure, you're not going to completely squash it but it will then be considered a "dirty" service and only be used for illegal activities. No U.S. business will ever touch it again.

The recent shutdown of Liberty Reserve, another digital currency favored by criminals, shows the extent to which the U.S authorities are willing to go in cases like this. Nowhere on earth is safe if you are running/facilitating a multi-billion dollar money laundering operation.

Unless your a large bank "too big to fail"... Or give any serious punishment to for money laundering.

Are you trolling? The Pirate Bay is doing better than ever.

But it's not a legitimate method of obtaining (a lot of) data. The only legitimate uses I for BT I've used are WOW updates and maybe getting Linux distros.

The Pirate Bay may still be up, but it's a shady corner of the internet.

If businesses can't legitimately use BC, it doesn't matter if I can still do shady things with it.

The world's black market is huge. The world is bigger than just U.S. If Bitcoin is banned from U.S., it won't be stopped anyway. Like war on drugs, war on Bitcoin will only raise its price.

At the same time, every person even in the government or banking sector, would love to keep his earnings and bribes in a secure highly-liquid asset Bitcoin is.

The war on Bitcoin won't be about forbidding usage, but about seizing bitcoins from mortals to rulers. And eventually it will displace fiat currencies and take out a lot of artificial power that is created via money printing. Then this war will be over and people can back to daily peaceful life and work. (Yes, wars will become completely unsustainable due to lack of debt-based funding.)

It's peer to peer, they'd have to take down the internet to stop it.

Bitcoin is only valuable because it can be converted into real tangible goods. If government makes it hard to impossible to convert bitcoins into goods, its value will plummet overnight.

>You book guys think you can just push levers on a printing press and write around the Vatican. So naive.

Article states, "The hearings will be held by the Senate Committee on Homeland Security and Government Affairs and by a subpart of the Senate Banking Committee, the aides said."

And then it continues, "As with all emerging technologies, the federal government must make sure that potential threats and risks are dealt with swiftly; however, we must also ensure that rash or uninformed actions don’t stifle a potentially valuable technology."

While I cannot say sooth how exactly this will end, but I have a feeling it will end in tears. And by tears, I mean primarily our tears.

I mockingly envision TSA agents shaking me down at an airport for undeclared bitcoins and then absconding with my hardware until they can determine that I'm not illegally transporting undeclared bitcoins across state borders.

I'd mock this notion, but at this point in time, I know better.

And apparently Obama has also been asking about Bitcoin recently.

> The president, whose most important job is surely to protect the integrity of the monetary system, smugly asked Schmidt if Bitcoin, one of many growing challenges to currency hegemony, was anything he had to worry about.

http://www.usatoday.com/story/money/columnist/wolff/2013/10/...

Interestingly, Eric Schmidt had no idea what Bitcoin was until Julian Assange first explained it to him in June 2011.

http://wikileaks.org/Transcript-Meeting-Assange-Schmidt?noca...

This is more about the government trying get its share of the pie and control and monitor bitcoin. Inherent in the philosophy of bitcoin is a society where no central authority can control the means of exchange. I think the more control the governments puts around bitcoin the more people will be driven to alternative crypto-currencies...

Why would government want a piece of the bitcoin pie? They already have the entire pie in terms of control of the money supply. If anything bitcoin is becoming an existential threat to one of the main pillars of government power. I predict terrible things for bitcoin going forward.

I welcome all the USA has to throw at btc. It will only make it stronger in the long run and further erode any credibility the us gov has.

Inversely, it will only weaken Bitcoin, and erode any credibility it has.

I would say it has stood the test of time for a few years now. Every attempt thus far (directly or otherwise) has strengthened it economically. The price is now around $250usd, doubled in the last month since silk road was closed down.

i don't think you can say the test if time when it had only been a few years.

Talk about underestimating.

If the USA wanted to, it could easily destroy bitcoin, they have more than enough computing power.

It might not be legal for them to do so, but that's their own self imposed limitation, not inability.

>they have more than enough computing power.

No, they don't. Not even close. What they do have is enough money to print more ASICs than the Bitcoin community has.

>they have more than enough computing power.

All the servers, personal computers AND super computers in the world COMBINED do not share enough computational power to put a dent in the Bitcoin network thanks to the widespread use of specialized Bitcoin mining hardware, i.e. ASIC Bitcoin miners.

This is missing the point. Bitcoin's value is completely derived from being able to convert it into tangible goods (well, basically cash at this point). They can easily make this conversion next to impossible for the majority of people. The fate of bitcoin rests completely in the hands of various governments, and I don't think its future is bright.

I love how there is no 'one' person in charge of bitcoin, who are they planning on summoning.

None or the developers are anonymous, so one imagines they will be summoned. At least some of them are US based. Even if they don't own or control anything, they'll still be blamed.

This is just a shakedown to get some dollars for the upcoming election season.

"we must also ensure that rash or uninformed actions don’t stifle a potentially valuable technology"

I love how they judge the utility of bitcoin based on monetary value.

"Value" alone doesn't necessarily imply "monetary value."

I'm excited to see the costly boondoggle that will come from this, because we all know how well the SEC is at regulating centrally controlled currencies.

Considering that the world economy did not completely implode in 2008, I think we could do far worse.

I wasn't really referring to the world economy. Whether it is from dealing legally in bitcoins or undergoing HFT transactions where exchanges can selectively declare self-help, or new financial tools/instruments, the people with the ability to leverage technology in ways where there will be little to no technical capabilities to enforce regulation (due to it's newness) will have more incentive to work outside of governments. By the time government has caught up to the problem, people would have innovated and pushing the bar higher.

But on the global economy, a lot of emerging economies have been hit hard, and the schizo of the market on taper/no-taper utterings tells me this book is still open.

Stupid question expecting stupid answers: Is there a reason why Bitcoin can't just be treated and regulated like any other foreign currency?

I think the anonymity of Bitcoin makes it tougher to regulate when compared to other currencies which generally pass through regulated intermediaries.

Honest question. Isn't giving someone a $20 bill for something more anonymous than BitCoin?

Yes, cash is more anonymous. Though, large deposits and withdrawals of cash receive more scrutiny.

Yes, but there are downsides to cash which Bitcoin solves.

For example, crossing country borders with more than $2k-$5k in cash is a felony many places. Bitcoin, however, is as blind to borders as TCP/IP.

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