Should Bitcoin users be demanding regulations on it? Please leave a comment at the end of the article and let us know your thoughts!
I don’t watch CNBC very much these days. While I am an investor and do still have a tiny portion of my net worth in stocks, the bobbleheads that spit out economic news on TV have little to offer those seeking true economic freedom.
I did, however, recently see an interview CNBC Asia did with Peter Vessenes, head of the Bitcoin Foundation. What many viewers may not understand is that, as a peer-to-peer cryptocurrency, Bitcoin does not have an official “foundation”, and no one can speak for the whole movement. The beauty of Bitcoin is that it’s a disorganized group of people. The Bitcoin Foundation doesn’t speak for all – or even most – of them.
What disturbed me was that Peter said that he believed more regulation will be good for Bitcoin. He suggested it will root out “bad actors”. He’s worried about services like Silk Road where users have swapped Bitcoins for drugs or other “contraband”, saying such services hurt Bitcoin’s image.
Likewise, Cameron Winklevoss (you may remember him as an enemy of Mark Zuckerberg in the Facebook-inspired movie “The Social Network”) said at a conference last week in which he also said more regulation would be good for Bitcoin. His venture capital firm only invests in Bitcoin startups who are in bed with Big Government. I guess he figures once the sheep warm up to the “newly improved”, government-approved Bitcoin, his Bitcoin investments will be worth a lot more.
These guys are making the argument that nobody will respect Bitcoin if it’s some nebulous cryptocurrency they don’t understand. Or even worse, if a slanted media in the pocket of Big Finance and Big Government plays up the ridiculous idea that it’s nothing but a haven for criminals. Sure, government agents have opened called anyone who uses alternative currency a “domestic terrorist“, but that doesn’t mean they’re all REAL criminals.
Winklevoss went so far as to even say Bitcoin-ers “love regulation”. Huh?
His desperate need for love from low-information citizens and greedy government officials is terribly misguided. The world got along just fine many centuries ago bartering in any number of different currencies. In the early days of the United States, colonists used Spanish dollars, British pounds, various colonial currencies, gold and silver, and even animal skins as currency.
Then, the government got big enough to come in and shut all of the other exchange methods down in order to take control of the entire financial system. With modern technology, they now have a spy-state utopia where they can track your every dime.
Fiat currency has a virtual 100% adoption rate despite being a flawed means of exchange. If the logic is that the best, most transparent currency will win, then someone ought to tell the billions of people trading paper money with no intrinsic value.
People use fiat currency because governments told them it was the latest and greatest step in becoming “more civilized” (right after higher taxes). Then they put a gun to everyone’s head and forced them to use it. Kind of like in the movies where James Bond walks up behind the bad guy, smiling and chatty, while simultaneously digging a pistol into the guy’s back.
The idea that Bitcoin would be so much better if only it were regulated by a bunch of government thugs who care only about tracking your every move is ridiculous. The big boys and girls using Bitcoin know the risks and are willing to take them. The government’s lovely system of regulations, on the other hand, has brought us Too Big to Fail, massive corporate welfare, a currency declining by the minute, and a bunch of monkeys at the Federal Reserve who answer to Wall Street’s demand for cheap, easy money.
Oh, and they can electronically seize every penny you own whenever the mood strikes.
At the same time, these guys figure that if only we trust the government with all of our financial data, they’ll never do wrong by us. They’ll only look out for our best interest and never abuse their power.
They’re only forgetting one thing.
Legendary essayist H.L. Mencken got it right when he said “When a new source of taxation is found it never means, in practice, that the old source is abandoned. It merely means that the politicians have two ways of milking the taxpayer where they had one before.”
To think that once you bow before government and beg for their approval that they’ll treat you well is a misnomer. In fact, it just so happens that the state of California has issued a nasty-gram threatening fines and criminal charges to the very Bitcoin Foundation welcoming more government oversight. The ironic part is, the Bitcoin Foundation just held a conference in San Jose, and it generated a bunch of revenue for… California.
No capitulation to Big Government is ever rewarded.
Bureaucrats can’t wait to get their hands on Bitcoin so they can continue to control every aspect of the financial industry. They can’t afford to have any leaks in their data-collection boat. They’ve already got banks, credit card companies, Western Union, and everyone else working as their unpaid spy. Now, just like they’ve been working to ban cash, they’re chomping at the bit to exact their will on Bitcoin.
Only, they say they aren’t. In a recent report put out by FinCEN, the government said it doesn’t want to regulate the cryptocurrency. Then they went on to list a bunch of caveats and talk in vague terms about exceptions. Knowing the track record of government overreach, I’d say their denial is about as compelling as the publicist who says his celebrity client wasn’t driving drunk last night and isn’t an alcoholic… 24 hours before said client checks into rehab to “find himself”.
Sure, regulation has attracted the masses to faulty fiat currencies, over-leveraged banks, and slave-like credit indebtedness. The average person sees a sign that says “FDIC Insured” and never thinks about how the government would pay depositors in the event of a total financial collapse. The average person wants to FEEL safe, not actually BE safe.
To them, watching the Kardashians is more important than keeping tabs on their money or questioning the system. If they’re ever in a bind, they’ll just demand the next greedy politician in line takes your money to give to them.
That’s where Bitcoin comes in. It was created for people who don’t trust the system. People who are tired of bozos in Washington or Brussels devaluing everything they own.
So what if some people are buying drugs with it? Assuming that I even believe the government has nothing better to do than hunt down guys smoking a joint in their backyard, you’re merely treating the symptoms, not the causes. Government is great at that. It creates one BS law, then finds it can’t enforce it or gets lazy, and enacts another law to do its dirty work in enforcing the first one.
For the same reason I don’t want to hand out traffic tickets to drivers going 42 in a 35 because they MAY have caused an accident, I don’t want government to get its paws on Bitcoin because somebody MAY be breaking one of their silly drug laws.
Once you give them the power, it will come back to haunt you. If some guy too busy dribbling hot sauce on his beer belly during NFL Sunday won’t use Bitcoin because he wants the government to have too much power, then let him use Federal Reserve Notes. Sometimes you just have to leave some people behind.
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