As China Looms, the U.S. Ponders Ways Not to Destroy Bitcoin | Wired Enterprise
Geege Schuman stashed this in Bitcoin
The U.S. government believes that some scary people are using bitcoin. But here’s another scary prospect: If the government goes overboard with a hard-line approach on bitcoin and other emerging digital currencies, it may merely push them overseas, where they will surely flourish outside of its control.
The government is also careful to distinguish between the various types of digital currency. Bitcoins were the default currency of the Silk Road — the online drug-and-mayhem marketplace that federal agents shut down last month — and this is partly what sparked today’s hearings. But bitcoin itself has not been the preferred currency of cyber criminals, according to law enforcement’s top digital currency investigator, the Secret Service’s Edward W. Lowery III.
i am not sure if the article is out yet, but there is someone writing about how Silk Road lowered crime in America. ring a bell Geege?
Silk Road is a peaceful place because it lives online. That alone makes it harder physically to hurt people. Indeed, thanks to technology, Silk Road solved most of the problems that lead to violence, which are a natural consequence of black markets. It’s difficult to rob anyone on Silk Road. You can’t easily commit fraud or reduce the quality of a product. Buyers can’t easily get ripped off, either, as sellers don’t get paid until product arrives. Quality issues are solved by the eBay-like ratings system. And the site replaced the deadly turf wars endemic to meatspace black markets with a mechanism by which sellers compete to deliver the best quality product more quickly and at the lowest price. As Harvard University economics professor Jeff Miron put it to The Daily Beast, Silk Road is “a Consumer Reports for drugs.”
Carnegie Mellon economics professor Nicolas Christin described it thus:
Silk Road doesn’t really sell drugs. It sells insurance and financial products. It doesn’t really matter whether you’re selling T-shirts or cocaine. The business model is to commoditize security.
The most violent thing ever to happen on Silk Road was a cyber attack that put it offline for a week.
So what do we learn from this?
1. Reducing black markets reduces crime.
2. Online black markets are less violent.
3. If the marketplace is transparent, it forces people to be more fair.
More news today, re the senate hearings, re bitcoin:
"I was expecting a good positive response from the law enforcement community ," Murck said. "It was just very heartening to hear it spoken aloud and acknowledged that there are really positive legitimate uses for the currency and that they have the tools in place to interdict illicit activity and keep the bad actors out of the system."
Just yesterday, Andy Greenberg at Forbes reported on the newest - and possibly scariest - use of Bitcoins: crowdfunding murder. "The Assassination Market" as it is known allows user to anonymously pledge money in the form of Bitcoins as a bounty towards the killing of major political actors and has a system in place so that the would-be killer can prove himself and receive the reward.
"When I say that Bitcoin is an experimental system right now, criminals are experimenting too," Murck said of the market. "I think what they'll find as they do very provocative things like that they might be in for a rude surprise down the road, because it seems like law enforcement has the ability to catch up to them."
This was the overwhelming theme of the hearing. All the witnesses understood the potential for virtual currencies such as Bitcoins to attract criminals, but all had confidence that law enforcement had the ability and tools to prevent that from happening.
Crowdfunding murder is fascinating and horrifying. Would make a good movie.