Let's say that bitcoin becomes really useful for transferring money without the government being able to monitor it. What does the government do?
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Replying to @asymmetricinfo @mjpesquire
Say "Oh, gee whiz, I guess we can't monitor financial transactions any more?" Or do they make bitcoin illegal?
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Replying to @asymmetricinfo @mjpesquire
So you're sitting on $10 million worth of your private bitcoin, and you have 90 days to exchange it for whatever it will bring on the open market. (Sorry, the price just crashed, hard luck)
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Replying to @asymmetricinfo @mjpesquire
Or say you keep it. You can't use it at any retailer that wants to maintain a physical nexus in the country without a visit from the Feds. What do you do with it?
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Replying to @asymmetricinfo @mjpesquire
Turn it into cash? Great. What do you do with $10 million in cash? Because the government is going to come knocking if you try to put it in the bank, or buy a car, or do anything else in a large cash deal.
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Replying to @asymmetricinfo @mjpesquire
Also, you have $10 mm of eminently stealable cash sitting somewhere.
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Replying to @asymmetricinfo @mjpesquire
You can still transact on the black market. But is a currency only good for buying drugs and child porn very valuable to you?
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Replying to @asymmetricinfo @mjpesquire
Black market currency is very valuable to the people who use black markets. Conversion to real currency ("money laundering") is a thing. It's criminal and risky, but so is every other part of the black market production chain. People take risks, and they'll take Bitcoin.
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Also, *enough* of Bitcoin is legitimate that there is sufficient political will to keep it legal. It provides enough cover that the illicit parts will have the breathing room they need to continue. This has always been the way.
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Replying to @random_eddie @mjpesquire
So how come it's so hard to launder cash, and getting harder every year?
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Laundering cash has two tricky components: * moving it back and forth between "illegal / without valid papertrail" and "on the books" * moving it physically across borders BTC solves #2 inherently. ...and it does nothing re #1.
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BTC may make money laundering EASIER, because it lets anyone get into the business. Every waitress, every pizza joint, every convenience store clerk, everyone who sells artwork at the annual county arts and crafts fair can now find a way to swap a few BTC for $ under the table.
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Replying to @random_eddie @MorlockP and
... which is more or less how drugs get sold today, at least at the end-user level.
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