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Can Government Intervention 'kill' off btc (and crypto's generally)?

  • 23-01-2018 5:58pm
    #1
    Registered Users Posts: 4,655 ✭✭✭ makeorbrake


    As per the subject line, what are peoples thoughts on this? It's been suggested many times before. However, given the recent surge in value and interest in crypto's generally over the past couple of months, is it likely that action will now be taken by governments whereas it wasn't all that significant before?

    - South Korea seem to be taking action - regulating out the libertarian nature of bitcoin - by insisting that the associated bitcoin addresses must be registered against the crypto exchange account.

    - India just locked out most crypto exchanges by shutting down access to their bank accounts.

    - The Europeans have suggested that there needs to be a worldwide agreed approach to regulating cryptos.


    Anyone any thoughts on whether a crypto can overcome harsh regulation? Will it force it back underground?


Comments

  • Registered Users Posts: 6,026 ✭✭✭ grindle


    It could hamper it, but they'd only have wanted to do that in relation to the currency aspect of the asset - the cat's out of the bag thanks to Ethereum and utilities can be dreamt up and provided as needs fit.

    It's a much more secure foundation for the whole market to build off of so I can't see them wanting to flatten a potentially lucrative golden goose, like some demented fintech recreation of Silicon Valley but globalised.


  • Closed Accounts Posts: 2,021 lifeandtimes


    As per the subject line, what are peoples thoughts on this? It's been suggested many times before. However, given the recent surge in value and interest in crypto's generally over the past couple of months, is it likely that action will now be taken by governments whereas it wasn't all that significant before?

    - South Korea seem to be taking action - regulating out the libertarian nature of bitcoin - by insisting that the associated bitcoin addresses must be registered against the crypto exchange account.

    - India just locked out most crypto exchanges by shutting down access to their bank accounts.

    - The Europeans have suggested that there needs to be a worldwide agreed approach to regulating cryptos.


    Anyone any thoughts on whether a crypto can overcome harsh regulation? Will it force it back underground?

    If there'smoney to be made in it by tax etc no sensisible western government will outlaw it.

    It will be regulated and really it should be to stop the pump and dumps costing people dearly


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake


    If there's money to be made in it by tax etc no sensisible western government will outlaw it.
    Ok, but isn't one of the factors of it that it makes it quite difficult to track due taxes? i.e. perhaps there's not money in it from the point of view of the old/establishment guard....??
    It will be regulated and really it should be to stop the pump and dumps costing people dearly
    No problem with the whole pump n' dump thing but to what extent should they take regulation? Will they take regulation to a point whereby it makes it impotent. Stiglitz was making the point in the last 24 hours that if its regulated, the reason why people want to use it will disappear. All very well paying taxes but do we want EVERY single payment we make to be tracked? Are there things for which we'd like a payment to work like cash - albeit electronically? Remember, pretty soon, there will be no cash whatsoever (Sweden have almost reached that point).
    grindle wrote: »
    It could hamper it, but they'd only have wanted to do that in relation to the currency aspect of the asset - the cat's out of the bag thanks to Ethereum and utilities can be dreamt up and provided as needs fit.
    I accept there are a multitude of potential uses for this technology generally. However, in it's present state, surely the currency OR store of value aspect of it - and in the case of BTC, more or less completely so - is of major relevance?

    I think it's inevitable that it will be regulated harshly. The question then is - can it find a way to flourish in spite of the powers that be??


  • Registered Users Posts: 6,026 ✭✭✭ grindle


    I accept there are a multitude of potential uses for this technology generally. However, in it's present state, surely the currency OR store of value aspect of it - and in the case of BTC, more or less completely so - is of major relevance?

    I think it's inevitable that it will be regulated harshly. The question then is - can it find a way to flourish in spite of the powers that be??

    I'd suppose an inept and thoughtless government would regulate it harshly. Our government can well fill that role. But they're also self-serving twats who can be easily lead by members of special interest groups/lobbyists or friends in the know at the slightest hint of money, so it really could go either way.

    If they had half a brain they'd take a panoramic view of how each country is reacting and see whether they want to take their seat closer to Venezuela ("BAN IT ALL! STEAL MINER EQUIPMENT!") or to Switzerland ("We want to foster growth and drain the brains of other countries & become crypto Silicon Valley!").

    Shouldn't take a genius to know which country will be better off in a few years if they stay on course.


  • Moderators, Society & Culture Moderators Posts: 15,420 Mod ✭✭✭✭ smacl


    grindle wrote: »
    Our government can well fill that role. But they're also self-serving twats who can be easily lead by members of special interest groups/lobbyists or friends in the know at the slightest hint of money, so it really could go either way.

    We'd actually need a new coin, thinking BPE*, to keep our government on side with this. I suspect if the banks and other financial institutions see crypto as a substantial threat, they'll no doubt lobby the government of the day to do their bidding.

    *BPE, a fork of ZCash, the Brown Paper Envelope is long overdue cryptofication. Some would say that Bitcoin is actually the original automation of the brown paper envelope, which makes you wonder why governments haven't already embraced it.


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  • Registered Users Posts: 2,388 ✭✭✭ Nermal


    I think the answer is no, but better we find out sooner rather than later.


  • Registered Users Posts: 6,026 ✭✭✭ grindle


    smacl wrote: »
    *BPE, a fork of ZCash, the Brown Paper Envelope is long overdue cryptofication. Some would say that Bitcoin is actually the original automation of the brown paper envelope, which makes you wonder why governments haven't already embraced it.

    Monero is BPE's natural pair.
    Bitcoin has been a bad pair for BPE since tumbling got too costly/traceable.

    They certainly have interesting problems on their hands anyway.
    Monero is a threat. Any P2P gambling site is a threat as you can bet against yourself.


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake


    All the 'noise' right now is about regulation. You mentioned Switzerland. Someone from the Swiss National Bank came out the other day and said that cryptos/bitcoin should be strictly regulated. Other commentators stating that they will be regulated out of existence.


    Now these guys are afraid that their lunch is going to be eaten - no doubt. However, they are not going to go willingly - we can expect the old guard to circle the wagons. I know that the point is made that crypto can be driven underground and still work in that way. However, how is it supposed to reach the masses in that way?

    In terms of the price of btc, I'm concerned that these guys will move to crush it (in collaboration with national governments) and destroy the current value proposition by way of inducing a collapse of the current price. I don't want this to be the case - but I'm not sure if I share the same enthusiasm as others here in that respect.


  • Registered Users Posts: 27,467 ✭✭✭✭ drunkmonkey


    No but I do think traceable Virgin coins will become a thing, Hive CEO Frank Holmes said their getting a premium for their coins due to that fact.
    The Etherum Alliance are most likely to go to Hive rather than purchase dirty coins. Fidelity are also paying staff in coins again these would be virgin and traceable. Abagail Johnson supposedly has her own mining rig set up in her office but doubt it can make enough to pay staff.

    So no I don't think crypto is going anywhere but some of it maybe.


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake


    So no I don't think crypto is going anywhere but some of it maybe.

    I agree that it's not going anywhere - they can't put it back in the box. However, my fear is that they can damage it and set its potential for mass usage back by many years if they go for crude/harsh regulation....not to mention destroy the current price of btc (and other altcoins).


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  • Registered Users Posts: 27,467 ✭✭✭✭ drunkmonkey


    I agree that it's not going anywhere - they can't put it back in the box. However, my fear is that they can damage it and set its potential for mass usage back by many years if they go for crude/harsh regulation....not to mention destroy the current price of btc (and other altcoins).

    What will need to happen is the coins don't fall foul of anti money laundering regulations. At the moment nearly all would bar ones coming from legitimate companies which there are very few of, If the financial institutions are willing to pay a premium at the moment for those coins they must be anticipating a crackdown yet keep their bought coins safe.

    Bitcoin itself may plummet or become redundant in the blockchain sphere but ETH looks like it's here to stay as it's been adopted by some very big names in technology. Just look at the names on the Etherum Alliance list.


  • Registered Users Posts: 6,026 ✭✭✭ grindle


    All the 'noise' right now is about regulation. You mentioned Switzerland. Someone from the Swiss National Bank came out the other day and said that cryptos/bitcoin should be strictly regulated. Other commentators stating that they will be regulated out of existence.

    There's a good chance they'll be regulated, yeah.

    But anti-crypto bankers and lobbyists don't seem to have this man's ear:
    The Canton of Zug, the Cryptovalley, has come a long way. There we can gain experience. If the experiences in Zug are positive, we can extend that to the nation. Therefore the statement: It does not need to stay with Cryptovalley, it should become the crypto-nation

    I'd almost say he sounds bullish.


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake


    It seems like every one of the Davos crowd are coming out and kicking BTC in the b^%"s. Regulation this and that. I fear these people are too powerful not to screw with it. They all go with the 'we like 'blockchain' but btc/etc is not ok. The only form of 'blockchain' they're going to like is one that is centralised and controlled by them.


    It's sickening but I cant see this going well.
    Bitcoin itself may plummet or become redundant in the blockchain sphere but ETH looks like it's here to stay as it's been adopted by some very big names in technology. Just look at the names on the Etherum Alliance list.
    I thought that BTC and ETH simply didn't compete with each other? i.e. btc - as a store of value/potential reserve currency & eth to be put to work in the smart contracting sphere. What have these big names done with ETH in practical terms?


  • Registered Users Posts: 6,026 ✭✭✭ grindle


    I thought that BTC and ETH simply didn't compete with each other? i.e. btc - as a store of value/potential reserve currency & eth to be put to work in the smart contracting sphere. What have these big names done with ETH in practical terms?

    They've only been testing it - it's not as scalable as it needs to be for it's intended purposes yet so the disruption of VC/IPO funding is about the best use for it so far.

    As for BTC and ETH not competing with eachother - that depends on your perspective.
    BTC Core's main aim is (meant to be) building the most secure, decentralised network, then tackle scaling whilst maintaining security. Presuming that happens sidechains can take care of the rest in their eyes, with or without their contributions.

    ETH's main aim is to become the most useful - probably the best thing it's done has been to prove there's a valid use for the tech beyond BTC's traditional anarcho-capitalist leanings or it's get-rich-quick hoarding mechanism (biggest name->dominant on-ramp to other cryptos->so few to buy->so few selling->price go up).


  • Registered Users Posts: 2,388 ✭✭✭ Nermal


    It's sickening but I cant see this going well.

    Why is it sickening? Centralised, regulated cryptocurrencies are worthless. The whole point of this was to create a currency outside of government control. If governments attempt to squash BTC and it survives, it will be incredibly valuable. If they manage to squash it, it was never worth anything anyway.


  • Registered Users Posts: 15,112 ✭✭✭✭ Dohnjoe


    Regarding crypto, governments are primarily concerned about the following

    1. Protecting the public from potential scams, pump and dump schemes, shady ICO's, a volatile market and severe losses
    2. Preventing too much money from disappearing into an uncontrolled unregulated black hole (not so much an issue right now)
    3. The use of "dark" currencies for money laundering, corruption, fraud, ransoms and so on

    So far, the response is mixed, some government agencies appear to want to regulate Against crypto, and others For crypto

    To explain the difference between the two. An example of "against" would be shutting down exchanges, whereas "for" would be to give exchanges official guidelines and regulation to maintain a higher standard and protect users

    As for point 3. I've given this example before, but imagine if you will a "dark Euro", completely private, untraceable. It wouldn't last long. Coins that provide significant advantages to laundering, evasion and so on will have big challenges in the long run if they don't adapt to curb illegal use

    So to answer the original question of the thread, yes, if governments work together they can seriously affect the secondary market value of crypto (not crypto's themselves, they can go on forever, regardless of if they are worth something or not)

    My opinion and reading into it is that various levels of regulation is absolutely going to happen, albeit slowly. Seems to lean more towards the "For" camp, which is a good thing. The overwhelmingly advantages of blockchain technology also works in favors of crypto. Again the reactions to crypto are notoriously hard to predict, but am less worried about it than I used to be


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake


    Nermal wrote: »
    Why is it sickening? Centralised, regulated cryptocurrencies are worthless. The whole point of this was to create a currency outside of government control.
    You've made my point for me.
    Nermal wrote: »
    If governments attempt to squash BTC and it survives, it will be incredibly valuable. If they manage to squash it, it was never worth anything anyway.
    It's still sickening because they have the infrastructure and framework in place to mobilise and squash it.


  • Registered Users Posts: 5,192 ✭✭✭ pg633


    Desire to control currency by centralised power is as old as the hills - it's why kings stamped their face on coins and why debasing it was so desirable to those powers.

    There is an element of not wanting competition but a lot of it is conservatism (not liking change) and an attempt to protect people from collapses, scams, incompetence.

    An example of a bank collapse from Galway two hundred years ago when banks issued their own notes in this country: http://places.galwaylibrary.ie/history/chapter305.html


  • Registered Users Posts: 15,112 ✭✭✭✭ Dohnjoe


    pg633 wrote: »
    Desire to control currency by centralised power is as old as the hills - it's why kings stamped their face on coins and why debasing it was so desirable to those powers.

    It's for practical and common sense reasons, e.g. controlling inflation, mitigating crashes, creating stability


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake


    Dohnjoe wrote: »
    It's for practical and common sense reasons, e.g. controlling inflation, mitigating crashes, creating stability
    True but those powers can and are being abused. eg. QE, fractional reserve banking, etc.


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  • Registered Users Posts: 15,112 ✭✭✭✭ Dohnjoe


    True but those powers can and are being abused. eg. QE, fractional reserve banking, etc.


    QE is a bit controversial, even among economists - it has benefits and drawbacks. Consensus is that post systemic crisis it generally worked and produced tangible benefits. Most studies from 2000 onwards have shown the same.

    Fractional reserve banking has been around for centuries. No one has come up with a viable workable alternative. Yeah the idea of full reserve banking floated about for a bit, but it wouldn't really produce the benefits that FRB does


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