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Bitcoin Is an Existential Threat to the Modern Liberal State

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Re: Bitcoin Is an Existential Threat to the Modern Liberal State

#21

Post by guard-of-terra »

rayiner wrote: post #14
guard-of-terra wrote: post #11

Earlier quoted context omitted.

Why should we ever care about money laundering when they didn't punish HSBC? They aren't serious about this issue, why should we care?

Because HSBC wasn't doing the money laundering. The charge was a failing to exercise the controls required by banking laws. See: http://www.usatoday.com/story/money/business/2012/12/11/hsbc...

"for years deliberately channeled hundreds of millions of dollars of the prohibited transactions"

If that isn't money laundering then what is?

The charge means nothing. Show me one person behind bars; until then the charge means nothing.

Re: Bitcoin Is an Existential Threat to the Modern Liberal State

#22

Post by jessriedel »

mrb wrote: post #20
Guvante wrote: post #7

Earlier quoted context omitted.

> there are many more Bitcoin-accepting vendors who make sales without using BitPay Who have independent increases. If I accept bitcoins and I didn't see an increase in transactions, that decreases the total transaction volume change. You can't just look at one particular vendor and apply their results to the aggregate. And BitPay's numbers are odd, they reported an average transaction size of 10 bitcoins, that seems…

The datapoint I cited was the most concrete irrefutable one. Firstly, BitPay is a big enough payment processor that their growth generally reflects accurately enough the growth of Bitcoin (their market share is actually slighly decreasing over time, as other payment processors sprang up in the recent past). Secondly, all other datapoints show as well that the volume of transactions increases: - Estimated volume of US…

Worry less about beating the author and more about editing your top-level comment to be correct. Guvante is right.

Re: Bitcoin Is an Existential Threat to the Modern Liberal State

#23

Post by readme »

itistoday2 wrote: post #4

What a gigantic piece of FUD. > How do governments collect taxes on transactions in Bitcoin? The answer is they don't, and they can't. Crypto-currency's strong protections on anonymity make it impossible for any state to know who is buying what, who is paying whom, who earns what, and who has what in savings. BS! The state seems to be surviving just fine with its "inability" to track who is buying what with cash, and…

"Bitcoin is interfering with the ability of the government to stop consensual transactions between adults."

UH OH

Re: Bitcoin Is an Existential Threat to the Modern Liberal State

#24

Post by rayiner »

guard-of-terra wrote: post #21
rayiner wrote: post #14

Earlier quoted context omitted.

Because HSBC wasn't doing the money laundering. The charge was a failing to exercise the controls required by banking laws. See: http://www.usatoday.com/story/money/business/2012/12/11/hsbc...

"for years deliberately channeled hundreds of millions of dollars of the prohibited transactions" If that isn't money laundering then what is? The charge means nothing. Show me one person behind bars; until then the charge means nothing.

Your ISP "deliberately" routes child pornography over their networks all the time--that doesn't make them distributors of child pornography.

HSBC provides a banking service. Unlike with ISPs, they are responsible for overseeing how their service is used, to prevent money laundering. Failing to oversee the employees who failed to follow the regulations designed to prevent HSBC's service being used for money laundering is not the same thing as actually money laundering (juicy reporting aside).

Re: Bitcoin Is an Existential Threat to the Modern Liberal State

#25

Post by gojomo »

FTA: Taxation: How do governments collect taxes on transactions in Bitcoin? The answer is they don't, and they can't.

Though many Bitcoin fans don't quite realize it, Bitcoin's radical transparency could in fact be a tax-collector's wet dream. Every public-key, balance, and transaction is public.

A government that wants to coopt and efficiently tax Bitcoin could announce the following policy, based on the idea of 'tainted' or 'clean' balances:

"You can make your Bitcoin legal inside our jurisdiction by registering your public keys. (No, we don't need your private keys.) All transactions between registered keys are great, just make sure they match up with your tax filings, because we can see the endpoints.

"You should not receive money to your registered address(es) from an unregistered address. If you do, you can file a disclosure with 30 days, identifying the origin and nature of the transaction, paying all applicable taxes, and then the balance is yours to keep."

"If you do not, the entire amount that's mixed with the unregistered-origin balance is subject to forfeit. Your registered keys with any such balance will be blacklisted, making your previously-registered balances unspendable until you come back into compliance."

Any above-ground business would then stick with clean balances. Both clean and tainted coins could circulate in the same blockchain, but rarely mix... and would have different de facto values. (Would a clean or dirty satoshi be worth more? I'm not sure!) Trying to buy above-ground things with dirty money would face the same 'laundering challenge' as today: making it look like legitimate income via front operations.

Except, the blockchain would be a perfect record of earlier related transactions. That means big-data traffic analysis, and occasional meatspace busts discovering the identities of unregistered keys, would create a very strong map of unsanctioned economic activity -- much better than is possible with physical cash.

Re: Bitcoin Is an Existential Threat to the Modern Liberal State

#26

Post by guard-of-terra »

rayiner wrote: post #24
guard-of-terra wrote: post #21

Earlier quoted context omitted.

"for years deliberately channeled hundreds of millions of dollars of the prohibited transactions" If that isn't money laundering then what is? The charge means nothing. Show me one person behind bars; until then the charge means nothing.

Your ISP "deliberately" routes child pornography over their networks all the time--that doesn't make them distributors of child pornography. HSBC provides a banking service. Unlike with ISPs, they are responsible for overseeing how their service is used, to prevent money laundering. Failing to oversee the employees who failed to follow the regulations designed to prevent HSBC's service being used for money laundering…

HSBC knew what they were doing, that is things were explicitly illegal, and profited from that.

Who actually launders money then? Hint: it's not mobsters since their craft is illegal by itself and therefore no separate law for laundering would be needed.

Re: Bitcoin Is an Existential Threat to the Modern Liberal State

#27

Post by mrb »

kiba wrote: post #18
mrb wrote: post #2

"The volume of transactions in Bitcoin is growing only slowly, relative to the massive increase in demand for the currency" The author states this without presenting data. He is wrong. In fact, data shows the opposite: - The exchange rate increase by 5x between February (low of $20) and March (high of $100) - BitPay alone recorded a merchant transaction volume increasing by 7.6x between February ($687k) and March ($5…

The # of translations is linked in the article but not the actual USD volume of the graph. Also, the blockchain data doesn't tell us much because for all we know it might be that somebody is merely moving coins from one wallet to another.

"Also, the blockchain data doesn't tell us much"

This is precisely why I give numbers from BitPay, SR, casinos, etc, to show that these transactions are associated to actual spendings on goods and services.

Re: Bitcoin Is an Existential Threat to the Modern Liberal State

#29

Post by koenigdavidmj »

gojomo wrote: post #25

FTA: Taxation: How do governments collect taxes on transactions in Bitcoin? The answer is they don't, and they can't. Though many Bitcoin fans don't quite realize it, Bitcoin's radical transparency could in fact be a tax-collector's wet dream. Every public-key, balance, and transaction is public. A government that wants to coopt and efficiently tax Bitcoin could announce the following policy, based on the idea of 'ta…

> If you do, you can file a disclosure with 30 days, identifying the origin and nature of the transaction

I smell a Fifth Amendment issue with doing this in the US.

Re: Bitcoin Is an Existential Threat to the Modern Liberal State

#30

Post by johnvschmitt »

gojomo wrote: post #25

FTA: Taxation: How do governments collect taxes on transactions in Bitcoin? The answer is they don't, and they can't. Though many Bitcoin fans don't quite realize it, Bitcoin's radical transparency could in fact be a tax-collector's wet dream. Every public-key, balance, and transaction is public. A government that wants to coopt and efficiently tax Bitcoin could announce the following policy, based on the idea of 'ta…

Excellent points.

This would, of course, lead to any individual, or entity, simply keeping 2 sets of keys. One legit, taxed, & one gray/untracked. That way, they could play either the clean or dirty markets.

But, they still couldn't launder, or cross between dirty & clean easily. They'd still need a collaborative cleaner in between... Such cleaners are easily built in the model you mention. (Out of country, with hands in both clean/dirty channels.)

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