Sunday, November 9, 2014

Regulators Want to Kill Bitcoin, One ATM at a Time

Giulio Prisco gets it. In an op-ed at CryptoCoin News, he writes:
As Bitcoin businesses are forced to become compliant with financial regulations, they’re giving up anonymity, Venture Beat reports, and the Bitcoin community is not happy.

Bitcoin ATM manufacturer Robocoin announced that all of its ATM operators would have to enable anti-privacy software and hardware as part of a new effort toward compliance with the Financial Crimes Enforcement Network (FinCEN).

“We hoped operators would always get to choose  KYC [(Know Your Customer)] vs Non-KYC, but legal requirements have emerged that do not allow the choice. It has become clear that as a registered money service business (MSB), Robocoin cannot support non-KYC machines anywhere in the market. Under our lawyers’ advice, we cannot process anonymous financial transactions.  [F]or operators unwilling to sacrifice anonymity in favor of compliance, we’re offering to resell their machines. Our legal compliance is paramount to our continued legal operation, and we cannot risk the future of the company to allow anonymity.”

If you are thinking that’s like having to show your id to buy a beer, well, you are totally right, and that’s precisely what I think will happen.

I think it’s quite obvious that the regulators will never allow the real Bitcoin to exist, but only compliant sanitized versions. Compliance with all financial regulations, even stupid ones, is the price that Bitcoin businesses have to pay to become mainstream. In particular, privacy and anonymity, which are really the heart and soul of Bitcoin as it was initially conceived, must go.
It is time for libertarians who promoted the idea that Bitcoin was going to be some new way around government regulation of everyday transactions to admit that they completely miscalculated how government would come after Bitcoin and regulate it: Never allowing it to become a mainstream anonymous method of exchange.

The government is not emerging from the shadows and it is clear that Bitcoin will never be a general alternative to government money. In fact. it is very trackable and thus a very dangerous form of exchange for those who seek privacy.


  1. You seem to enjoy attacking bitcoin more than fiat.

    you should be celebrating proof of work and overcoming double spending and the opportunities that will allow for us in the future, not attacking every little shortcoming with the current version of the code you can.

    The idea and the technology is the important part, everything else can be changed or fixed with more developed code.

  2. regulators can care less....

    ‪#‎RaceToYes‬ ‪#‎FDA‬ Action item

    The Race to Yes
    Have you emailed Commissioner Hamburg yet? Take 30 seconds and send her this email:

    Dr. Hamburg: No more excuses. No more delays. Accept a New Drug Application for eteplirsen, and use all the tools Congress gave you in FDASIA to speed approval of this drug and those that will follow.

    everyone should help them...

  3. You are looking far too much at the American economy as the engine that will push Bitcoin to the mainstream. The true market that it will first takeover is 2nd-3rd world economies. Venezuelans are already turning to Bitcoin as an alternative currency, despite rampant currency controls. Argentina is headed that way.

    As technology matures in the Bitcoin sector, we'll see cryptocurrency's ability to provide cheap banking possibly bring billions of people into the world economy.

    Considering that 1/3 of the citizens in America are on the federal dole, when the government debt bubble explodes, I don't think America's lack of participation in Bitcoin will matter much.

    Beyond that, though, there are initiatives working hard to bring anonymity to Bitcoin regardless of the regulatory regime, so that America could have access to an advanced black market