What is the 'real value' of any currency? By unofficial estimates, black and grey market trades in various nations actually absorb a good 10 % of their GDP. Not to mention the old joke:

A chinese college student majoring in economics, a rising star in the department widely acknowledged to be on track to a lucrative work in the government, is sitting with his friend and makes a bet: I bet you 100,000 dollars you won't eat this bucket of shit. His friend does. Now the friend makes the bet that the econ major won't eat the same shit for 100,000 dollars. Econ major does this. Now they are both sitting with their mouths fully of shit and nothing gained, and econ major turns to his friend and utters the immortal line:

Don't worry friend. We did our patriotic duty. Our country's GDP just increased b 200,000 dollars!


Just a tip of the iceburg. Reportedly, the 'black money' in india accounts for nearly 100 billiion that leaks out of the country. Per year.

People think the GDP figures by the 'evil' US government is 'embellished'. They have no idea what it actually means to lie about a nation's economic figures.

This is a fundamental fallacy shared by many bitcoiners. Governments can easily 'not allow' bitcoin (for all intents and purposes) by simply passing a new law saying any ISP relaying bitcoin related traffic will be shut down.

That move alone vastly reduces the number of miners and nodes probably to the point where a 51% attack becomes easy, and the currency crumbles.

Don't get me wrong, I'm extremely positive about bitcoin but you have to understand how vunerable it is.

Cheers, Paul.

Oh, no. An attack for which we couldn't possibly deploy any countermeasures. I'm scared now.

More people than you think.

Controlled opposition?

it's trivially easy to route bitcoin and mining through a proxy.  the reduction would be from the people who don't want to "risk" disobeying the government-- it would NOT be a technological barrier.  of course that reduction would reduce the network hashrate, and probably a price crash, but given that bitcoiners are by and large a freedom loving ideologically driven group, i dont think the reduction would be as great as i think you think it would be.

Governments can go to extreme lengths to stifle innovation. Copyright was invented to restrict the free flow of information after the invention of the printing press. The industrial revolution still happened within 300 years.

Bitcoin proves that financial restrictions are also simply restrictions on the free flow of information. The powers that be will probably try to stop it, but the computer revolution will also happen within 300 years (if we don't kill ourselves first).

The computer revolution has not happened yet. Today's computer systems barley scratch the surface of what computers can do. It is slowly changing, but for the most part, computers emulate the technologies from the last century.

The Government isn't some omnipotent god-like overlord of the people. The Government is limited to work with certain enumerated powers. Destroying Bitcoin is not one of the powers they possess...

Cryptography isn't new and it's already withstood the government's attempt to destroy it. The government attempted to regulate cryptography as "munitions" in 1993. They lost... The Judicial Branch of the US Government has already safeguarded cryptography. Combine Bitcoin with the Fifth Amendment against self-incrimination and Bitcoin is pretty much secured. You cannot be compelled to reveal your private key if you choose not to... DPR was facing a laundry list of charges; no doubt he was compensated in some way for that private key, he agreed to the deal; whatever it was...

"Two federal appeals courts have established the rule that cryptographic software source code is speech protected by the First Amendment (the Ninth Circuit Court of Appeals in the Bernstein case and the Sixth Circuit Court of Appeals in the Junger case)."

Bitcoin regulation is not possible; USD regulation pertaining to Bitcoin transactions is within the regulatory authority of the Government but it's thin ice because it's illegal to restrict USD transactions for political protest. Bitcoin by nature is a protest against the current financial system. Choosing to use Bitcoin is political protest as protected by the First Amendment; using a competing product is protest be it subtle or not...

The Government destroying Bitcoin is equally as likely as the Government declaring Martial Law and throwing political protesters in FEMA camps... It's just not a fight they're in a position to win and it's not within the scope of power that they possess.

They would need to change several previously existing laws, the Judicial branch would need to reverse its stance on the First Amendment, and then to make matters more complicated, any laws that restrict Bitcoin would also restrict other digital tokens of common use, the digital marketplace would essentially collapse and that's a huge financial sector in itself.

"In the abstract, spending money can be considered a form of speech in the same way that throwing a brick through a window can be considered a form of speech. The issue is a question of balance. Nobody believes in protecting the right of the brick thrower to “speak” by committing an act of violence over the right of the window owner to be secure from destructive acts." --http://www.amendmentgazette.com/how-spending-money-became-a-form-of-speech/

Yeah, prohibition without justification has always worked.