Ripple fined for acting as a money services business without registration

What could possibly go wrong.

--- AirBnB, Uber, Ripple, etc....

There's a transitivity aspect to it. Ultimately taxes need to be paid in fiat, and large organisations will eventually get stomped on for accepting crypto if it subverts government control.

On the second trip through the loop, you have crypto which can be used for small (in a sense, black market) transactions and fiat which can be used to pay things like utility bills or buy stuff from companies which must accept fiat. Individuals will provide exchange services (buy iphones with crypto!) at their own risk, basically by subverting KYC with small transactions. [We are already here].

What's the nth trip through the loop? I'm personally not sure, but interested in your views.

Because "fleeing to the virtual currency and staying there" has very small value and utility, unless you can at some point channel those money to regulated business and tangible goods...

Only if they can actually do stuff with that virtual currency in the real world, like pay rent and buy food. Otherwise, not so much.

"Given 2 options, one with a lot of friction and one without, no matter the "marketshare" of the first, the latter one will eventually win."

This isn't always true.

"The only way fiat can prevent this is to stop punishing good actors with AML/KYC compliance."

As has been posted, it's not that hard to comply. And if they want to act like a real currency, then they should be following the same regulations as real currency.

I might be nitpicking, but people don't like to "stay in cash". They just like tax evasion. It's not about staying in cash or not, it's about the ability to underreport revenue without an auditable paper trail.

You know, if a contractor gives you an invoice, and you pay in cash, nothing actually prevents them from burning their copy of the invoice and saying it never happened if the IRS asks.

Source: I'm from a country where the grey market is very alive and very flourishing.

And government regulators will be quite happy to make life more difficult for vendors as well as money transmission businesses if they start to worry that criminals are finding it too easy to spend their Bitcoins.

Organised criminals staying in BTC is not going to make the average person want to flee to it, it's going to increase their suspicion that Bitcoin's days of being a surprisingly friction free way of buying goods and services in their own country are numbered.

Which means he's probably not paying tax on that himself. Which is tax evasion, pure and simple. Which is illegal for good reasons.

I know that's a little facetious but "value" is almost entirely based in what a human can get out of it - and that is almost entirely in the real world.

Um... Just because they're virtual doesn't mean there's not a banking system and aren't subject to banking laws. Virtual currencies are well on the radar and being regulated just like non-virtual currencies.

In a lot of cases it's really unclear what intent of the law would be, or the intent is contradictory.

1) Bitcoin is claimed as a legitimate alternative to cash money insofar as: Bitcoin proponents believe that, if the world valued Bitcoin, it would function superbly as a money. So "legitimacy" here means "workable" or "beneficial" - it has nothing to do with legitimation by governments.

2) Many Bitcoin proponents are of the opinion that governments destroy wealth and hamper economic progress by trying to restrict and control the actions of people, in so doing preventing more organic and consensus-based mechanisms of social organisation emerging. Thus the argument that Bitcoin should not be subjected to existing cash laws is a) an attempt to prevent Bitcoin from early smothering by suspicious governmental authorities and b) an early-game strategy, the end game of which would be the significant or total disempowerment and/or disestablishment of government.

Ah, but think of the fun case. What if I offer you the gold coin? Let's say you think it's illegal compensation, too far from market rate, and don't want to take it. You don't want any part in this mess. Does the law force you into it anyway? Are you obligated to take a $50 coin that costs thousands of dollars in taxes?

See Facebook versus Teachbook cough I mean Teachquest.

Or Microsoft versus Lindows cough I mean Linspire.

Put another way, your minimum viable product requires some legal infrastructure, otherwise you'll probably discover the hard way that it is not viable after all.

Among an extremely narrow, elite class perhaps. Jeffersons & Adams & Paine * Adam Smith are disproportionately represented among the people of that time that we remember now, but weren't exactly the norm.

> Probably literacy reached a local maximum, or a higher level than in generations prior.

Well, the latter but not the former -- just as has been the case since. [0]

> To take this out of the broad country level perspective, where technological and other advancements and history could be argued to be the cause-- we could look at the second and third generation immigrants to the USA. I suspect, and I hear this anecdotally, but I don't have data-- that the first generation kids are more industrious than the third or fourth

The common thing I've heard from people in fairly-recent-immigrant-descended-communities is that first-generation Americans (children of immigrants) are less industrious than immigrants or later generations. This is not to endorse the idea that any of these generational generalizations are accurate, just that, well, there's lots of different generalized anecdotes out there.

> In fact, I would argue that it was the presumption that prosperity (Which we've had) would result in ever higher levels of literacy (Which we've experienced) and thus higher levels of enlightenment and philosophical perspective due to ever better education and schools -- which we have not had.

I don't think that's true. I just think that due to selective preservation of history, we tend to only see the top end of the bell curve from 1776, and a lot more of the current distribution.

> Schools have slowly declined to the point where I suspect most schools don't even teach classical literature, let alone philosophy.

Certainly, the fetishization of the ancients Greece and Rome has waned and there is a lot more literature written since the fall of Rome that is taught in schools. I'mnot sure that this is a problem. And the definition of "philosophy" has narrowed since the 18th Century -- much of what is currently taught in school would have been within the scope of "philosophy" were that term as broad as it was in the 18th Century.

And perhaps a smaller percentage of schools teach philosophy than did in the 18th Century, but I suspect at least as great a share of people attend schools in which philosophy is taught; that would have been mainly the elites in the 18th Century, after all, not everyone. [0] http://ourworldindata.org/data/education-knowledge/literacy/

There existed societies without slaves, and multi-cultural cities were everybody got along, milenia before the "Atlantic slave trade".

So it's not a great example of something that "got better as things progressed".

>Western civilization isn't on any trend to disintegration

That's like, em, your opinion man. Lots of people think otherwise -- so it's not that clear cut.

> Um, no. Just no.

It was the Englightenment that made the end of slavery inevitable. For instance, it is written into the US Declaration of Independence that all men are created equal and have rights. That made it inevitable that the US would eventually outlaw slavery in its territory (i.e., as soon as it would be possible for the majority of the country to force the minority---and they did, at massive expensive of lives and material).

And it's not like the idea that all men are created equal was originated by the US Founding Fathers---it wasn't. It was part of the cultural mileiu at the time. It was a recent discovery. The United States was not responsible for the Enlightenment; it was a product of the Enlightenment.

So, your comment is incredibly ignorant and couldn't be more wrong. You are trashing the very time period that ended slavery.

Ignore history and you will be doomed to repeat it. (The Germans and the Russians did just that---creating new forms of slavery.)

I'm not interested in arguing the rest of your points. The evidence is out there if you care to look and think.

edit: So, I think I was too harsh on you, dragonwriter. I don't want you to think I'm a giant dickbag. Going to Hitler AND Stalin that quick is kind of crazy. I still think what I said, I just think I was being too aggressive.

Also, if people in Plato's time thought every subsequent generation was worse, they were probably right---at some point, the populace was so degraded that they actually would listen and seriously consider that old bastard (Plato). I'm half-joking here, of course. He did delimit all the important philosophical questions---he just got them all wrong.

But it was broadly understood that states wouldn't allow black people to vote, and the constitution at the time didn't prohibit that.