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Every important person in BitCoin just got subpoenaed by NY financial regulators

forbes.com

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Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#31

Post by jonknee »

A1kmm wrote: post #20
pkinsky wrote: post #9

Earlier quoted context omitted.

As I understand it, if you want to receive bitcoins with wallet A and send those same bitcoins with wallet B, you would need to transfer said bitcoins from wallet A to B. And each transfer is recorded in the blockchain.

This is correct. However, it is difficult to prove that A and B (or perhaps every wallet in some long chain) are owned by the same person, especially if everyone has a large number of wallets and doesn't reuse them when they are empty. Let's say the blockcoin shows a transfer of 1 BTC to a new wallet A, and then to a new wallet B, and then from B to a wallet owned by a registered BTC-USD exchange C; to comply with go…

> but they cannot automatically infer the identity of A.

They can certainly walk up the tree though, which is impossible with cash but extraordinarily easy with BTC. In this case B could have a tax bill to pay unless they can prove otherwise.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#32

Post by baddox »

marcell wrote: post #21
Thiz wrote: post #18

Earlier quoted context omitted.

Great explanation. Ignore my ignorance in crypto stuff, so, what's stopping us from creating a hundred accounts in one computer and having a couple of bitcoins in each one of them? Or even spread in one hundred shared peer-to-peer bank services?

Nothing stops you from create hundreds or even millions of bitcoin addresses, which can act as "accounts." Edit: A bitcoin address is a 160-bit number. That number is associated with a public and private key. The only way you can spend bitcoins stored in an address is if you know the private key of that address. For more information, this video gives a fairly in depth explanation: http://www.youtube.com/watch?v=Lx9zg…

Not only does nothing stop you, it's fairly trivially automatable.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#33

Post by coinman »

pnathan wrote: post #6

Unpopular opinion of the day: bitcoin is real money, and the government will regulate it and control it as such. In my opinion, the end-game is this: bitcoin addresses are taxable, with occasional tax agents spot-checking large accumulations of bitcoin to determine if said addresses fall within their jurisdiction. Bitcoin has the unusual ability to have a very tight trace on where a given virtual coin goes: that just…

In a way, bitcoin itself is not really a currency, or money, it's more like an idea for exchanging messages. Bitcoin is really a decentralized messaging system which relies on cryptography and proof-of-work to maintain integrity. Should exchanging messages in the form of "I owe you x amount" over a p2p network be regulated or be made illegal?

However, The fact that it's used as a form of currency is just an interpretation of what Bitcoin is. There can be other interpretations for what bitcoin-type system can be used for, for example Namecoin is used for name registrations. The judge declared that bitcoin is money by making an interpretation.

If anything, Bitcoin is just software. It will be very difficult to regulate.

1. Software using encryption is protected speech (http://en.wikipedia.org/wiki/Bernstein_v._United_States). Regulating bitcoin as in bitcoin the software would be a form of censorship.

2. Bitcoin uses many of the standard principles of cryptography we already use in e-commerce. Banning cryptography would have enormous consequences for the economy of the internet in general.

3. Banning or regulating p2p would cause an uproar.

4. If buying bitcoins in exchange for dollars is really exchanging a string of bits for money, then if this is banned or regulated, would it also ban buying software or other digital goods for money?

5. The regulations can't be too broad, but can't be too narrow. Would the laws restrict only bitcoin as a currency or other applications of bitcoin as well? If too broad, then they will unintentionally restrict other uses of bitcoin too. If too narrow, a new system will pop up again.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#34

Post by drcode »

runarb wrote: post #5

Looks like the price of Bitcoins just made a good jump at https://www.mtgox.com/ . Are speculants thinking that if the us government are geting involved it validates Bitcoin further? Edit: Screenshot of the jump: http://i.imgur.com/G5Dk7Nh.png

All publicity is good publicity.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#35

Post by _delirium »

rayiner wrote: post #16
antitrust wrote: post #14

Earlier quoted context omitted.

> the Internet as a new Wild West I thought that idea died, was buried, exhumed, and reburied back in 1996.

I don't think it's dead. I think a lot of people romanticize things like Bitcoin as being part of a world that's lawless relative to the real one. And as hackers, it's one where the lack of order favors them, just as the lack of order in the Wild West favored those with the most horses and guns.

I'm not sure that analogy plays out well for hackers in the long term. Ultimately, the wild west was not won by cowboys with some horses and guns, but large-scale ranchers with title to hundreds of thousands of acres. The cowboys may still have movies made about them, but the likes of King Ranch came out on top economically.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#37

Post by pkulak »

marcell wrote: post #21
Thiz wrote: post #18

Earlier quoted context omitted.

Great explanation. Ignore my ignorance in crypto stuff, so, what's stopping us from creating a hundred accounts in one computer and having a couple of bitcoins in each one of them? Or even spread in one hundred shared peer-to-peer bank services?

Nothing stops you from create hundreds or even millions of bitcoin addresses, which can act as "accounts." Edit: A bitcoin address is a 160-bit number. That number is associated with a public and private key. The only way you can spend bitcoins stored in an address is if you know the private key of that address. For more information, this video gives a fairly in depth explanation: http://www.youtube.com/watch?v=Lx9zg…

I just wondered to myself how long it would take you to use up all the addresses if you created a trillion per second.

3.6e+17 times the current age of the universe. So, it looks like there are enough addresses for you to really go nuts, if you like. Block chain might get a bit bloated though.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#38

Post by stfu »

Finally - New York is going after financial criminals! Oh wait a minute...

In related news last Friday the Justice Department had to admit that the success numbers Eric Holder trumpeted on mortgage fraud were massive overstated - by 80 percent. The government restated the statistics because it got caught red-handed by a couple of nosy reporters. Priorities...

[1] http://www.bloomberg.com/news/2013-08-11/eric-holder-owes-th...

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#39

Post by wmf »

_delirium wrote: post #35
rayiner wrote: post #16

Earlier quoted context omitted.

I don't think it's dead. I think a lot of people romanticize things like Bitcoin as being part of a world that's lawless relative to the real one. And as hackers, it's one where the lack of order favors them, just as the lack of order in the Wild West favored those with the most horses and guns.

I'm not sure that analogy plays out well for hackers in the long term. Ultimately, the wild west was not won by cowboys with some horses and guns, but large-scale ranchers with title to hundreds of thousands of acres. The cowboys may still have movies made about them, but the likes of King Ranch came out on top economically.

Yeah, there are some fairly lawless places on Earth today and you don't see many people (other than rdl) moving there to make their fortune. People subconsciously prefer the rule of law but it's cool to romanticize Bitcoin data havens and whatnot.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#40

Post by lutusp »

coinman wrote: post #33
pnathan wrote: post #6

Unpopular opinion of the day: bitcoin is real money, and the government will regulate it and control it as such. In my opinion, the end-game is this: bitcoin addresses are taxable, with occasional tax agents spot-checking large accumulations of bitcoin to determine if said addresses fall within their jurisdiction. Bitcoin has the unusual ability to have a very tight trace on where a given virtual coin goes: that just…

In a way, bitcoin itself is not really a currency, or money, it's more like an idea for exchanging messages. Bitcoin is really a decentralized messaging system which relies on cryptography and proof-of-work to maintain integrity. Should exchanging messages in the form of "I owe you x amount" over a p2p network be regulated or be made illegal? However, The fact that it's used as a form of currency is just an interpret…

> In a way, bitcoin itself is not really a currency, or money, it's more like an idea for exchanging messages.

It's a way to convey messages, but the messages represent value in the same way that paper money does. If bitcoins can be exchanged for goods and services, then they represent the value of those goods and services, just like paper money.

An electronic message describing a transaction involving dollars, or euros, or some other wealth representation, is just a message about a transaction. But a bitcoin is the wealth representation -- it doesn't require, or refer to, another medium of exchange.

Your argument tries to deny the identity of bitcoins as currency, but that isn't so -- they're currency.

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