Quote from: philipp on June 18, 2011, 06:38:05 PM

Quote from: iamzill on June 18, 2011, 06:11:54 PM

Quote from: philipp on June 18, 2011, 05:49:35 PM

What we see now is two senators discovering something that can be connected to drugs, noticing that no one else tried to turn it into political profit yet; they just grab the opportunity to appear "tough on crime".

You answered your own question right there. It takes almost 0 effort for someone high up in the executive branch to kill off the American portion of bitcoin. FBI has jurisdiction on interstate commerce and the Secret Service has jurisdiction on counterfeiting (I am not saying bitcoin is counterfeiting, I'm saying they can successfully sell it to the media as an anti-counterfeiting operation). There are dozen of bureaucrats in DC with this much power, and all they have to do is sent out a memo to their underlings. A simple email.

If they succeed, they gain political prestige. Tough on crime, war on drugs, et cetera.

If they fail, they can claim it's just part of their job. In the very worst case they are still protected by the Executive privilege.

So far, two Senators have cashed in on this free "political profit". I expect many more to follow suit. This is how ugly our democracy has become.

There are other senators pushing other issues the think they can get politiccal profit from. Only some of these pet issues will amke it into legislation; we, the Bitcoin community, notice these two senators, since their issue is Bitcoin. All politicions are pushing for or against some issue. I do not see why Bitcoin should be among the few issues that make it into legislation. Then I don't know that much about your democracy.
I have seen the call for internet censorship to fight CP in Germany, it became a big political issue, made it into yellow press and legislation, and nevertheless in the end it failed, with the law now revoced. Bitcoin might be in for a similar treatment, but it might take a few years.

Philipp

I emphasized "executive" twice in my post because I expect only politicians in the Executive branch can damage the bitcoin economy.

Politicians in the legislative branch are not a real threat to bitcoin because exactly like you said, legislative issues could take years to become laws and they cannot prosecute people retroactively. That means even in the worst case scenario American bitcoin users could have months to gradually leave the market, thereby minimizing their losses and with no legal precautions to worry about.

Politicians in the executive branch, on the other hand, has the ability to freeze Mt Gox's funds within a day and subpeaona the withdrawl records of all American users. Like I said before, this can be branded as "war on drugs" operation, or "anti-money laundering" operation, or "anti-tax evasion" operation. Many law enforcement agencies, such as FBI, Secret Service, and even the IRS has enough authority and manpower to accomplish this. These types of politicians are the ones I'm worried about the most.

The victory condition for them is trivially low. They do not a need a successful conviction. They do not need a successful arrest. They do not even need to press any charges against anyone. They only need a subpoena from a Federal judge to crush Mt. Gox's reputation and destroy people's trust in bitcoins. Big media will spin it into "underground currency under investigation by XXXX", then critics of bitcoins will then spin that into "bitcoins declared illegal".

Sorry if I sound like a troll, but I'm just voicing my personal fears. If anyone can point out any errors in my arguments then I would love to hear them, since it would make me sleep much better at night.