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Bitcoin ban proposed by U.S. Senator Joe Manchin


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#1 Nicola Rebagliati

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Posted 26 February 2014 - 10:47 PM

http://www.businessi...coin-ban-2014-2

comments?

#2 Todd Erickson

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Posted 26 February 2014 - 10:53 PM

[mod edit: let's keep this right here; see my comment below]

Please repost in the General Tab.

This will most likely require a response from the Foundation.

#3 Marco Santori

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Posted 27 February 2014 - 01:01 AM

The Foundation has been working closely with senators, congressman and regulatory agencies on the Federal level for some time.  Most, like Senator Carper on the Hill, FinCen, HSGAAC, and GAO have worked hard to understand Bitcoin technology and its Industry.  These people have avoided knee-jerk responses and have instead taken the time to meet with the industry so they could Get It Right.  Whether it means more regulation or less regulation, true public servants like these have worked to balance protections for American innovators and American consumers. Their decisions to do so have not come without a price.

Senator Manchin's letter is a slap in the face to these people and their efforts.  It devalues the late nights and early mornings that they have spent picking up the telephone and calling industry leaders to understand esoteric technological points and opaque business relationships. It denigrates the battle that they have fought to take a sane, studied approach to a difficult problem.

Senator Manchin's comments themselves are shockingly uninformed.  His pseudo-arguments are, by and large, internally inconsistent and seem to demonstrate an embarrassing ignorance of the industry and the technology.  Anyone with even a cursory understanding of either would be able to give a point-by-point rebuttal, so I won't attempt that today.

Instead, I will say that Senator Manchin is, for now, in the minority.  He has not always been in the minority.  When the Foundation's membership first approached Washington, we were not met with uniform acceptance and have fought hard for the progress we've made.  Critically, though, he may not always be in the minority.  The best way to ensure that his comments don't sway others in power is to continue to engage policy makers and regulators.  This can only be accomplished effectively by presenting a united front.

Unfortunately, as someone once said, one of the challenges facing a decentralized industry is that is has no PR department.  If you are a Foundation member, reading this, then do your part to get involved on a committee and be that PR department.  If you are not a member, then stop reading, head to the homepage and join.  Put your hands to the wheels and the ropes of this organization and help us to steer this country in the right direction.

This letter should remind us all that this is a battle that can be lost.  The protocol will not save us.  Only our hard work will save us.  So let's get to it.

...You guys didn't think this would be easy, did you?

#4 Alex Morcos

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Posted 27 February 2014 - 01:30 AM

Thanks Marco.  Well said.

The Bitcoin community at large represents many different viewpoints.  And one common refrain is that the Foundation and the community shouldn't be engaging with regulators and lawmakers, we should be trying to win from outside the system with our technology.   Undoubtedly our greatest asset is technology and the abilities it provides us to do things in ways that were previously impossible.   But letters such as Senator Manchin's should serve to remind us of what we're up against.   If we're not trying to engage with the government, we run the very real risk that the view expressed in Senator Manchin's letter becomes the prevailing wisdom in DC and governments around the world.  And make no mistake, it may not be politically or technically feasible to completely eliminate Bitcoin, but it's certainly well within their powers to make it all but useless.   Too many people would miss out on the benefits if crypto-currencies were illegal and those that still used them would benefit far less because they won't reach anywhere near their true potential.

I don't view the Foundation's efforts as seeking to be regulated.  The efforts serve to push back against what might be a "natural" propensity to over regulate and circumscribe Bitcoin.

#5 Gerhard Petruschat

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Posted 27 February 2014 - 01:46 AM

quote of the day:

Quote

I am most concerned that as Bitcoin is inevitably banned in other countries, Americans will be left holding the bag on a valueless currency.

[...]

As of December 2013, the Consumer Price Index (CPI) shows 1.3% inflation, while a recent media report indicated Bitcoin CPI has 98% deflation. In other words, spending Bitcoin now will cost you many orders of wealth in the future.

So, american citizens should not have any bitcoins. Also, they should under no circumstances spend any bitcoins they have.
Solution: travel back in time, outlaw bitcoins before any american citizen could possibly aquire any.
Failing that, there is always the politicians solution: cognitive dissonance - combined with the profound belief that every single citizen is a complete and utter moron.

#6 Todd Erickson

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Posted 27 February 2014 - 02:25 AM

Marco - Thanks for the very insightful dialog.

History has been replete with fear and anger to anything that threatens the status quo. Whether it be a locomotive or minority rights to vote, people have always fought hard against things that they did not understand but knew would change the world around them.

I too was surprised at the comments that were made. Clearly the Senator did not hear any of the testimony from FINCEN, Dept of Treasury or the Secret Service, who unanimously agreed that the U.S. has all of the proper laws and resources it needs to manage this emerging technology. The Secret Service even testified that "we are not seeing criminals moving to utilize this new technology" - Perhaps because cash is still much easier and less traceable.

Hopefully there will be a strong response to the Senators sensational stunt. Time to start calling and emailing your representatives!

#7 Brian Goss

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Posted 27 February 2014 - 03:18 AM

You said it Marco!  This is _our_ Foundation. We are the PR department. I've been in my Congressman's office on a trip to DC (with great advice from Marco to boot! See https://bitcoinfound...sional-staffer/ )

If I, as a resident physician, can find a way into my congressman's office to educate them on Bitcoin, surely there are ten people who can right a letter for every person like me.

No one needs an invitation to join the fight or permission to work in the things that need doing, but rest assured you'll never get a better invitation or more lucid rationale than Marco's!

#8 Dan Plante

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Posted 27 February 2014 - 06:51 AM

View PostMarco Santori, on 27 February 2014 - 01:01 AM, said:

The Foundation has been working closely with senators, congressman and regulatory agencies on the Federal level for some time.  Most, like Senator Carper on the Hill, FinCen, HSGAAC, and GAO have worked hard to understand Bitcoin technology and its Industry.  These people have avoided knee-jerk responses and have instead taken the time to meet with the industry so they could Get It Right.  Whether it means more regulation or less regulation, true public servants like these have worked to balance protections for American innovators and American consumers. Their decisions to do so have not come without a price.

Senator Manchin's letter is a slap in the face to these people and their efforts.  It devalues the late nights and early mornings that they have spent picking up the telephone and calling industry leaders to understand esoteric technological points and opaque business relationships. It denigrates the battle that they have fought to take a sane, studied approach to a difficult problem.

Senator Manchin's comments themselves are shockingly uninformed.  His pseudo-arguments are, by and large, internally inconsistent and seem to demonstrate an embarrassing ignorance of the industry and the technology.  Anyone with even a cursory understanding of either would be able to give a point-by-point rebuttal, so I won't attempt that today.

Instead, I will say that Senator Manchin is, for now, in the minority.  He has not always been in the minority.  When the Foundation's membership first approached Washington, we were not met with uniform acceptance and have fought hard for the progress we've made.  Critically, though, he may not always be in the minority.  The best way to ensure that his comments don't sway others in power is to continue to engage policy makers and regulators.  This can only be accomplished effectively by presenting a united front.

Unfortunately, as someone once said, one of the challenges facing a decentralized industry is that is has no PR department.  If you are a Foundation member, reading this, then do your part to get involved on a committee and be that PR department.  If you are not a member, then stop reading, head to the homepage and join.  Put your hands to the wheels and the ropes of this organization and help us to steer this country in the right direction.

This letter should remind us all that this is a battle that can be lost.  The protocol will not save us.  Only our hard work will save us.  So let's get to it.

...You guys didn't think this would be easy, did you?

Carper and Manchin are two peas in a crowded pod. Avert your eyes and ears and do not subject yourself to the false reasonableness of charm.

Things had already been decided in back room deals, way before the Foundation was called to congress. Do you really believe they wouldn't have come to an agreement and have their ducks in a row, long before they summoned you? I wouldn't. These people make deals and then execute. It's what they do.

To assume that Bitcoin's fate wasn't argued and sealed in the back rooms of congress and the WH 2 years ago is akin to talking yourself out of the notion that Bitcoin is world changing. Do you think that the tech underlying Bitcoin is out of the bag, and world changing? I do.

They do too. They're not stupid. And their personal power rests on control of the monetary system - Bitcoin is an imminent existential threat to their hold on power. They also have experts in various fields at their disposal that can explain the basics to them.

If I was one of those experts, I would advise them that they have to play poker - slow play the nuts. You are being played. You are a frog and they are boiling you. Step back and look at the time line of significant events for Bitcoin. This approach is designed to draw out and appease the counter party while they cause them to expend their resources, ultimately leaving them with anger and hope and not much else.

It's what I would do. It's pretty simple.

#9 Gerhard Petruschat

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Posted 27 February 2014 - 07:23 AM

Dan, i think you give politician too much credit. Some are certainly very smart and if they play bullshit bingo it is mostly to decrease their attack surface. But others are only marginally more intelligent than their public statements indicate. Plus, a lot of them are pretty old and out of touch with new technologies. Vision and foresight regarding new technologies is something that outside counsel cannot always convey.

Besides, you don't slow play the nuts ;)

#10 Brian Goss

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Posted 27 February 2014 - 01:36 PM

Dan,

Thank you for sharing what you would do as a politician...what would you do if you were not?  I think your theory is interesting but it paints a sort of tautology and doesn't hint at a useful strategy.  While the theory may be true (honestly doubt it, but, who knows, right?), it's not very useful unless the intended use is to encourage folks to pack up and head home :)

#11 David R Allen

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Posted 27 February 2014 - 03:28 PM

Dan's assumptions may be correct.
We may be playing out a scenario that is a repeat of the classic power grab, leading to death and destruction.

But then maybe not...

This may be NEW ground, like circumnavigating the globe to put the flat world theorists to rest.
Remember Joseph McCarthy, seeing a communist under every bed, or Anita Bryant preaching that homosexuality will be the end of the family?  

We can continue to provide the facts, lead by example and let the global village decide.

Brian is correct.
Dan's "if I were a politician" scenario is not helpful, even if his devil's advocacy does stir thought in an already simmering pot.

In the end, it will not be the congressman's words that will be remembered...
It will be the global good achieved by the people who embrace this new way of identifying, securing and sharing value.

#12 Jinyoung Englund

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Posted 27 February 2014 - 03:32 PM

Hi everyone,

Wanted to share with you that the foundation sent a letter to Senator Manchin by way of his Chief of Staff, Hayden Rogers this morning.

Here is the link to the letter as well as the link to our blog post.

#13 Marco Santori

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Posted 27 February 2014 - 04:36 PM

So which one of us is the good cop, Patrick? ;)

#14 Pavel Chorbadzhiyski

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Posted 27 February 2014 - 07:37 PM

View PostAlex Morcos, on 27 February 2014 - 01:30 AM, said:

And make no mistake, it may not be politically or technically feasible to completely eliminate Bitcoin, but it's certainly well within their powers to make it all but useless.
Are you sure, Alex? Make no mistake, if governments can make Bitcoin useless if they want to then Bitcoin is indeed useless! Is it time we move our wealth into another coin?

#15 Dariy Margaritov

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Posted 27 February 2014 - 07:48 PM

This very much reminds me of the pre-UIGEA online gambling space in 2006. It ended pretty badly for the online gambling industry, which was pretty much destroyed in the States, and may never be repaired. It was mostly due to lobbying by the land based operators, who believed that the online gambling operators were eating their pie. We have a very similar situation here. Fortunately for us, the banks have not yet launched their squadrons of lobbyists, pouring money into legislation (since they are not viewing bitcoin as a real threat yet). Unfortunately for us, banks have a far greater lobbying power than the one gambling operators had when they passed the UIGEA. I agree with the comments above, laws are mostly arranged behind the curtains in the States, and afterwards introduced to the public. In my opinion the Foundation should keep as strong relationships with as many Senators and other Government representatives as possible, as you never know when, where and in what form an opportunity will surface for either regulating Bitcoin, or preventing a ban.

#16 David Strayhorn

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Posted 27 February 2014 - 07:50 PM

View PostJinyoung Englund, on 27 February 2014 - 03:32 PM, said:

Hi everyone,

Wanted to share with you that the foundation sent a letter to Senator Manchin by way of his Chief of Staff, Hayden Rogers this morning.

Here is the link to the letter as well as the link to our blog post.

Very well written letter by Patrick.

#17 David Strayhorn

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Posted 27 February 2014 - 08:00 PM

View PostDariy Margaritov, on 27 February 2014 - 07:48 PM, said:

Fortunately for us, the banks have not yet launched their squadrons of lobbyists, pouring money into legislation (since they are not viewing bitcoin as a real threat yet). Unfortunately for us, banks have a far greater lobbying power than the one gambling operators had when they passed the UIGEA.
What are the efforts by the Foundation to educate leaders in the banking sector about bitcoin? Obviously, it is good for bitcoin for them to realize it is in their financial interest to adopt bitcoin rather than kill it. I know that Wells Fargo and BoA have at least shown an interest in following the space, but credit card companies have been relatively derisive.

Question: How much effort does (and how much should) the Foundation invest in education of financial leaders on the benefit of bitcoin, relative to the amount of effort invested in education of political leaders?

#18 Marco Santori

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Posted 27 February 2014 - 08:46 PM

We meet regularly with those and other large banks.  We invest significant time in doing so.

There is a tremendous amount of effort going into our outreach programs.  Unfortunately, much of it is behind the scenes by necessity.  

I wish that it did not occur behind the scenes. I wish we could be as transparent as possible about it, but it unfortunately requires discretion.  If we reported every federal agency, bank and state regulator that reached out to us, or that accepted our offers to meet, well, we would be quite lonely.

Still, I think that transparency - at some level - is critical.  I'm still thinking about how best to achieve it.

#19 Mark Damstra

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Posted 27 February 2014 - 11:19 PM

LIke anything else, there are good politicians and not so good politicians. Good professors and not so good professor. Good dentists and not so good dentists.

Here, it seems like there is some classic,  reactionary, grandstanding.  Let me get some publicity while the iron is hot and the flashbulbs are popping.   How does this guy judge the whole currency and movement by a pathetically run exchange that has been faltering for months? I think future of bitcoin speaks for itself. A brief reactionary drop and a strong, solid recovery.  And the recovery shows no sign of abating.

I love the responses from the Foundation members. Simply brilliant.

#20 Sebastian Jurk

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Posted 27 February 2014 - 11:24 PM

I fear it might be a simple marketing move of a politician. Bitcoins appear very often in the media connected to illegal activities and when a politician claims we have to protect the people from bitcoins he can be sure that a not small amount of people will say "thank you" and "Yes" because they dont know anything but bad rumours. They wont miss it so its easy to forbid a thing a politician claims is dangerous.


Might be that he wants to get in the media to get votes as "the protector of the people and america". At least that was the thought i had when reading it.

@Marco Santori... what do i have to do to get in contact with you? I tried since weeks... emails, pm's at bitcointalk and so on. Regarding the issue with WeexChange and the owner ukyo that dont want to explain "for legal reasons" what happened with the coins. Instead he claims he works on getting it back and threats that sueing him might mean no one can get anything back. I would like to hear your advice and maybe you can get some infos for me and others that have bitcoins held back.