Quote from: michellj on May 15, 2013, 07:26:00 AM

The basic problem which the BTC community needs to resolve is how to set up a clean, legal, trustworthy system of moving fiat into and out of BTC quickly and easily.

Such a system, if existing, would enable the price of BTC against fiat to be truly responsive to the closest we can get to a frictionless free market.

Certainly, the US is a big player and needs to be taken into account, but its powers are not unlimited and as with all bureaucracies - there are huge inefficiencies and delays in governments attempting to exercise power - particularly in any morally suspect manner.

Ideally a number of distributed p2p exchanges would be the best solution - but we are still quite far from seeing that - as the interface between fiat and BTC always needs access to the worlds banking systems.

Perhaps the only option at present is to place one's trust in the only country which can and does stand up to the US - Russia - welcome BTC-E!

I have no problem with governments and prefer a world with them rather than without - its just that there needs to be a balance of powers to limit the excesses and abuse of powers which governments in history have been prone to.

This is what Ripple/OpenCoin is trying to do, AFAICT. The fiat/virtual exchange use case is built in, as opposed to BTC where these third party exchanges try to build on top of a closed financial system (and end up being incredibly vulnerable targets for hackers and regulators).