Quote from: witchspace on May 16, 2011, 06:38:02 PM

Quote from: SgtSpike on May 16, 2011, 06:30:10 PM

- Current bitcoin-to-cash and cash-to-bitcoin services will be shut down. No one could continue to operate a decently large service like that and not be caught.

Only those in the US. I mean, the US has banned Internet poker as well, but half of the world is still doing it. I'm not sure how many of the services are actually based in the US.

Quote

- Bitcoin value would drop like a rock overnight. Without anyone being able to exchange bitcoins for USD, many investors/speculators would lose confidence and try to sell sell sell as quickly as possible to avoid being stuck with bitcoins they cannot use (read: cannot continue investing with). Investors/speculators don't want to buy stuff with bitcoins, they are only in it for what they can get out of it in USD.

Or the price might increase, because they have an illegality/danger-premium, like drugs.

It's hard to predict in advance.

I think your comparison of bitcoin exchangers to internet poker companies is pretty apt, but I think dangers still exist. Those processors not located in the US could continue to act, but not with total impunity. US-friendly payment processors would refuse to do business with them, freeze their funds, etc.

The problem with the drugs comparison is that drugs are a consumable good that get people high regardless of rarity. Bitcoins are just another medium of exchange. The more difficult they are to exchange, the less useful they are. The extent to which US can effectively disrupt the ability of individuals to exchange them is the extent to which bitcoins will lose value given a US ban.