CB5000 wrote:You can start trading bitcoins however, play it like a higher risk stock market. I don't think the exchanges will be shutdown anytime soon as most of them follow government regulations.
I'm not sure that's even true, but it also doesn't particularly matter.
Read the first paragraph of Satoshi's paper. He's explicitly talking about using bitcoin as "electronic cash" that circumvents "financial institutions."
What I am saying is that the USG doesn't like that. At all
. Just carrying large amounts of physical US currency is already seen as de facto money laundering, so why would be bitcoin be treated any differently? Bitcoin evades any real notice and interest by the USG only because it remains a curio for libertarians, hackers and math nerds. If that changes, so will the USG. Likely overnight.
And should that happen, the exchanges are the obvious target. As the intersection with reality, they're unprotected by any of the whiz-bang cryptography. It's great to securely prove that party A really does own the BTC that was securely transacted to party B, but unless you are trading something equally as virtual, none of that helps you, does it? Without a ready exchange, BTC becomes extremely illiquid, and a "currency" that isn't current in the marketplace is no currency at all.
My problem is that bitcoin proponents naively presume that the USG's toleration of BTC is based on anything other than its financial irrelevance. Clap-trap about Constitutional/human rights or "They just wouldn't do that" is silly. Of course they'll do that.
Read some justice.gov press releases for heaven's sake, people are routinely going to jail over secret bank accounts. Bitcoin apologists are utterly relying on what can only be categorized as willful disbelief.
And BTC is irrelevant. http://eprint.iacr.org/2012/584.pdf
Most BTC doesn't circulate. Of the minority that does, most of the transactions are very small. When it comes to the very, very few large transactions, virtually all of them
stem from one big parent transaction of 90,000 BTC back in 2010. And, even stranger, there have been attempts to obfuscate the origin.
*Real* currencies don't look like that. Should bitcoin ever look any different, so will the USG look differently upon it.