U.S. Agencies to say Bitcoins Offer Legitimate Benefits | Hacker News Reader

U.S. Agencies to say Bitcoins Offer Legitimate Benefits

bloomberg.com

116 pointsa3voices38 comments

Isn't "we have no plans to regulate bitcoin" just the least embarrassing thing they can say between that and "it is not actually possible for us to regulate bitcoin"?

They can regulate the hell out of merchants and exchanges, if they want. (And there's a lot of restrictions already: http://www.forbes.com/sites/kashmirhill/2013/11/15/bitcoin-c...)

But I guess there's already a critical mass of very motivated and interested people on Wall st. who send a signal to legislators (whom they own) about importance of Bitcoin. If U.S. tries to shut down Bitcoin activity, it won't affect Asia, and Wall St. will have hard time going to that market. Instead, it's better if they can reap the benefits where they own infrastructure already.

No. Of course it can be regulated. Indeed it could be flat out made illegal. Just because you can't physically stop people from doing stuff doesn't mean a law can't (or shouldn't) be enacted.

Having a "no murder" law in no ways stops people from comitting murder.

As pointed out in the comment below you can certainly make it difficult to participate in the market - e.g making it illegal for companies to provide clearing into fiat currency. E.g in the UK right now altho there isn't currently a law no UK banks will provide deposit or clearing facilities for exchanges or market places for fear of reputational damage, e.g being at risk of accusuations of faciliating crime or terrorism financing. (Barclays have recently ended banking facilities with several hundred regular currency exchanges for exactly this reason - including a Somalian remittance service which has been in the news a bit [1])

1. http://www.bbc.co.uk/news/business-24553148

I would assert that there has been at least one murder prevented by the law against murder.

which one?

and having a no bitcoins law would prevent at least one person from making a bitcoin transaction

The Internet itself is pretty regulated and monitored already.

What's the best and easiest exchange to get into? Lets just say to start buying bitcoins?

also, what's the best API to use to start charging my customers with bitcoins?

both serious questions.

Easiest, coinbase. Best, maybe bitstamp.

There's Bitpay, too.

> What's the best and easiest exchange to get into? Lets just say to start buying bitcoins?

I recommend Coinbase. It's what I use personally. Bitstamp is also good I heard, and has the most volume for people in the U.S. Btc-e.com has a really good community, but it seems more difficult to transfer money into.

> also, what's the best API to use to start charging my customers with bitcoins?

Bitpay is the best, I believe, although I have no experience with it. It's also received VC from Peter Thiel.

I'd recommend "Bitfinex" https://bitfinex.com/?refcode=kwr9f922HS, as they offer both sides of the market (Long and short) as well as margin / leveraged trading and routing to BitStamp (probably the most liquid at this time). Full disclosure, I'm an active trader and market-maker there. I believe their fees are amongst the best in the industry for active traders and they are accessible via USD Wire-transfers in the SWIFT network.

>?refcode=kwr9f922HS

Quite tasteful good sir.

What can I say? Shameless self-promotion. Although the ref code does offer a 10% discount off trading fees for the first 30 days. So it's comes with that as a benefit. The company doesn't advertise either and uses word-of-mouth and promotion from customers.

Coinbase.com is by far the easiest in my opinion (and is a YC company). Unlike MtGox.com (originally the most popular) the site is fast, stable, well designed, and can connect directly with your US bank account. They've also got a set of merchant tools and APIs.

Since we're throwing out referral links here apparently, this link will give you and I both $5 in BTC:

https://coinbase.com/?r=4fedfb2d6cbd3b0003000845&utm_campaig...

> this link will give you and I both $5 in BTC

If you buy or sell at least 1BTC on their platform. Since that sets the mark at, oh about $500 now, ... ;)

Edit: ...or $600.

I'll second Coinbase as the hands down best choice for US merchants looking to sell (you get your first million in sales transaction fee free) and US citizens looking to buy coins (dead simple instant identity verification and linked directly to your bank account no shady third party money transmitters or wire transfers required).

There is one caveat. Coinbase isn't a real exchange in the sense that you can't buy and sell in real time. If you are looking to day trade and make money off short term price fluctuations you should use something like bitstamp.net which will execute your trades in real time instead of having to wait 3-5 days for them to settle.

Unfortunately coinbase is US-only.

https://coinvoice.com promises you can invoice in USD and receive BTC. Reverse of bitpay. Have registered, have not used.

Localbitcoins.com (cash transfer) can be less complicated than many alternatives

I'll second this. I bought some BitCoin on Coinbase and the coins didn't show up until 7 days later. While I was waiting for them to arrive, I used LocalBitcoins to drop off $100 at a bank one block away and the coins were in my wallet 10 minutes later. LocalBitcoins was definitely much easier to use for me.

A friend of mine setup a bitstamp.net account last week and it was fairly quick and easy. Took just under 3 days from clicking signup and sending over ID docs to being able to trade.

One more thing to add in: If you're in Germany (and are not an American citizen), I highly recommend bitcoin.de for buying/selling bitcoins. Super smooth, very legit, plus they are working with a real bank. https://www.bitcoin.de/de/r/wttmmm (disclosure: referral URL)

Did I miss something? Bernanke's comment basically boils down to "no comment", phrased in the polite speech Senate committee hearings. What's the news here?

The news is that the government isn't likely going to throw a shitfit and freak out over bitcoin. Because it's money related, and they can tax and regulate some piece of the transaction.

Doesn't really need to be said that Wall Street, Washington, and Lobbyists are all in bed together. Wall Street types and some Valley people have clearly told influential politicians in this that they should be cool.

Bitcoin gets another serious mark in the de-risk column

The Fed is not the government (its a private bank btw), and Bernanke's comments do not apply to agencies for which virtual currencies are their jurisdiction.

>its a private bank

Yeah, a "private" bank whose executive officers are appointed by the President and whose authority was enacted by Congress.

Precisely! Which is exactly what enrages so many people :)

(I must assume you haven't watched Sony Pictures' ca. 2010 documentary Inside Job yet?)

> Bernanke's comment basically boils down to "no comment", phrased in the polite speech Senate committee hearings

Genuinely wondering.. isn't that always the case no matter the question?

I'm saddened that legislation in the UK is so awful that it's virtually impossible to run a legitimate bit-coin business.

This is going to come back to hurt the UK economy in the end.

There seems to be a common fallacy that is propagated by media that bitcoin is untraceable. A visit to blockchain.info pretty easily dispels this myth. Bitcoin is anonymous (in the same way that cash is) but it is not untraceable. If money being exchanged to/from bitcoin is coupled with the same money transfer regulations as standard currency it ends up being more traceable than standard currency because there is a log of all transactions. This is likely why there won't be much resistance to bitcoin from regulators as long as they can control the endpoints.

Yes, the opportunities for forensic analysis on BitCoin are much greater than in a traditional currency where money can disappear into the void and re-enter the economy somewhere else without any word on what happened in between. In some ways I wonder if criminals of the future won't prefer the dollar to conduct their illegal activity.

Physically moving dollars is the hard part of conducting black market business in dollars.

Obscuring a wallet address is far easier than physically smuggling cash.

Has there been any clarification on the tax treatment of gains from trading Bitcoins? If I bought at $100 and sold at $300 is the $200 gain treated as income or capital gains?

Well, the SEC said that bitcoins "likely would be securities and therefore subject to our regulation", which would seem to indicate that it would be considered capital gains, rather than income. It's too early to know for sure, though.

Is BitCoin as secure as conventional currencies?

I've seen a good number of articles about wallets being stolen or exchanges being compromised but I don't know enough to tell if it's negligent behavior by the user/owner.

Negligent behavior. Bitcoin implement bank-level security, so anything stolen is negligent behavior. The vast majority of articles about wallets being stolen is when bitcoins were held in a third party online wallet, which was hacked. Keeping bitcoins in someone else's wallet defeats the idea of decentralization and owning your own money.

As for whether it's as secure as conventional currency, even more so: no one else has access to your money, unlike a bank account. In other words, no one can withdraw your bitcoins without you explicitly sending them.

Would it pass the Grandma test?

What would it take to trick Grandma into giving a person/program access to her Bitcoin wallet?

I assume she would just need to reveal her password to a program and from there it could steal her wallet?

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