Quote from: SlimNm on June 26, 2011, 04:22:36 PM

So what if the government bans bitcoins? It isn't like they can actually enforce it.

Well, to me it isn't that clear. Let's say the government (defined as the first government to ban Bitcoin) bans bitcoin. Such a ban probably would take the form of not allowing exchanging that country's fiat currency for bitcoin. It is likely to come under the guise of consumer protection and accompagnied by denouncing of bitcoin as a pyramid scheme, money landering system or whatever.
Let's assume that other governments follow. Sure they can't ban some geeks from exchanging some , $ or whatever bills for bitcoins in unviersity hallways, they can't stop currency trades via Silkroad or BlackMarket. But they can shut down the major exchanges like MtGox or TradeHill and the OTC markets like bitmarket.eu and destroy any alternative coming up.
The bitcoin system will still be operating, but it would just be some niche thing. It won't gain mainstream adoption.

Yes, the governments have failed against P2P filesharing. But that was not only a new thread, they were also unprepared for any attack on IP in general (and governments had to be convinced first to fight P2P at all).

With bitcoin the situation is a bit different: Governments are used to defending their currencies. The defenses are in place just waiting to become active, they are tried and well-trained. There's efficeint international cooperation of lw enforcement in such areas, and they're not afraid to put political pressure on countries for being too lax when in comes to money laundering or tax evasion.

The war machine is there, and at least somewhat ready. I'm sure some governments will decide to put it in motion against bitcoins some day. I hope it is too late by then.

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