It won't happen IMO. Our legislators are capable of thinking critically (for the most part?) and realizing what went wrong. And they know this is going to help Bitcoin evolve. It's not a flaw in Bitcoin itself. They aren't calling it the "Wild Wild West" of Bitcoin for nothing! Things will get better.
Personally I'm just more nervous that they try to stalk it to an extreme level like the internet with PRISM only applied to Bitcoin
Aka trace every address without evidence of wrongdoing just because they can then if someone is arrested use that database to implicate you as well as the defendant even if the coins plausibly were mixed before you receive them (Aka tainted coins)
Since it may be a new concept to a few gives a bit of an overview of what I mean link and explanation
http://www.bitkoins.com/discussion/5327/tainted-coins-how-colored-coins-could-be-used-against-bitcoins-anonymity/p1http://bitcoin.stackexchange.com/questions/7966/what-are-tainted-coins-exactlyIn simple terms don't mess with Fungibility
That's interesting I actually haven't seen that yet. I understand the concept. However, I don't think it will become that extreme. Now of course anything can happen so I'm not being an asshole saying that won't happen, but I think a more realistic view would be to assume that this could be a acceptable way to regulate cryptos? As awesome as Bitcoin is regarding anomimity, I think realistically for bitcoin to become regulated we are going to have to surrender some qualities. The way I see it, if it becomes regulated to the point where we have to disclose all personal info like the article said, Bitcoin is still extremely valuable and it's utility holds. Transaction rates, and it's universal quality will still make it a go 2 currency.
nonetheless very interesting.