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Hooah
10-06-2014, 03:15 PM
How can the United States attack or corrupt Bitcoin?

Most of these are pretty high on the 'tin-foil' paranoid spectrum but are possible, even though not probable. For purely hypothetical discussion from another thread, I am quickly brainstorming ways that the United States government could attempt to undermine bitcoin.

CRIMINALIZATION-The United States could criminalize the possession, exchange, or use of Bitcoins. Unless one wants to be a criminal, it would effectively delegitimize bitcoin. While this would have limited effect for our international members, it would kill it locally. I could also see international partners (EU, China) jumping on the bandwagon and also criminalizing it as it is not controlled by their powers either. Please note that I understand this would not close it down in the conventional sense, it would limit its economic vitality and value. While laws only work on the law-abiding, it would hamper the commercial aspect (most of its value) of it. It could go about this via different ways:

o War on Drugs. It could go after it for its history in the drug trade (Silk Road) and close it down for its money laundering aspects similar to eGold or Liberty Reserve. Even though it could not 'close it down' compared to these central exchanges, outlawing it would put a chilling effect on it. The FBI or IRS going after you is much different then RIAA/DCMA for BitTorrent.

o National Security. It could say that it is a risk to national security to our world reserve currency status and criminalize it similar to gold's prior ban.

o Terrorism. It could go after it by saying it is used for terrorism financing/money laundering.

o Counterfeit. It could see it as a competing currency and a violation of its Constitutional powers to coin money. It could consider it as a counterfeit currency similar to Liberty Dollar. The U.S./FED could even come out with its own form of digital currency (without the 21m cap) to make this case more believable.

o Securities Violations/Licensing Requirements. It could consider Bitcoins a security or a type of FOREX and requires a license to trade/broker them.


TECHNOLOGY-The other aspect is to seize your bitcoins, not by cracking the wallet's cryptography, but by cracking into your relatively unsecured computer.

o Think PRISM. The United States already has the capability and it is much easier for the government to use its corporate partners (Apple, Microsoft, Facebook, Intel, Nvidia) to secretly infect computers with loggers (for terrorism sake of course) and then unwittingly to you, simply transfer your bitcoins using your own key. This could be prevented by only storing it in cold storage but what good are they if you can't spend them. Also, if you created the wallet on a remote machine and then connect it to the internet at a later date, well it could now be compromised.

o National Level Filtering/Blocking/Censorship. Since they control the internetís backbone, they could also conceivably block all BTC traffic (this would also require the blockage of all encrypted traffic, or at least blocking unofficial encryption) as only terrorists would need to hide what they are doing. This is far more complicated as encryption does have legitimate commercial use. But they could publish government sponsored encryption for commercial means or only allow certain entities (banks, financial institutions, governments, etc.) from white-listed IPs to send encrypted traffic.

o Subterfuge. Another is to simply gain control of the bitcoin source (via developers), force an update of infected executables (they could even keep the source code clean as few actually compile their own source or even really audit the entire repository). They could undermine it by causing the a bitcoin fork similar to what happened a few years ago.

o Ownership. Through confiscation, the United States already owned a large hoard of coins. It could try to manipulate the price similar to the COMEX for Gold or Silver.

Most of these are way out there on the tin-foil spectrum, but they could be used to corrupt BTC. I think that with BTC only having a few billion in market cap, I do not even think the United States is worried about it as the technologies own (anarchist/libertarian) issues will limit its acceptance. While it might be fun to pay for a t-shirt or a cup of coffee, to think that it will be used at the same level as a government back currency is asinine. I view it as being along similar lines of gold or silver. You can buy stuff with it but the average person will be oblivious to it and compared to precious metals it will much harder for a random guy on the street to accept a bitcoin (they have to first set up a wallet). I am not saying bitcoin cannot be much bigger or smaller (it could conceivably be worth either $10 or $100,000 a bitcoin purely on the greater fool theory), I am only saying that it will never be on the same level as the U.S. Dollar (world reserve currency) or other BRIC-level national currency.

AnotherDave
10-06-2014, 04:23 PM
How can the United States attack or corrupt Bitcoin?

Most of these are pretty high on the 'tin-foil' paranoid spectrum but are possible, even though not probable. For purely hypothetical discussion from another thread, I am quickly brainstorming ways that the United States government could attempt to undermine bitcoin.

CRIMINALIZATION-The United States could criminalize the possession, exchange, or use of Bitcoins. Unless one wants to be a criminal, it would effectively delegitimize bitcoin. While this would have limited effect for our international members, it would kill it locally. I could also see international partners (EU, China) jumping on the bandwagon and also criminalizing it as it is not controlled by their powers either. Please note that I understand this would not close it down in the conventional sense, it would limit its economic vitality and value. While laws only work on the law-abiding, it would hamper the commercial aspect (most of its value) of it. It could go about this via different ways:

o War on Drugs. It could go after it for its history in the drug trade (Silk Road) and close it down for its money laundering aspects similar to eGold or Liberty Reserve. Even though it could not 'close it down' compared to these central exchanges, outlawing it would put a chilling effect on it. The FBI or IRS going after you is much different then RIAA/DCMA for BitTorrent.

o National Security. It could say that it is a risk to national security to our world reserve currency status and criminalize it similar to gold's prior ban.

o Terrorism. It could go after it by saying it is used for terrorism financing/money laundering.

o Counterfeit. It could see it as a competing currency and a violation of its Constitutional powers to coin money. It could consider it as a counterfeit currency similar to Liberty Dollar. The U.S./FED could even come out with its own form of digital currency (without the 21m cap) to make this case more believable.

o Securities Violations/Licensing Requirements. It could consider Bitcoins a security or a type of FOREX and requires a license to trade/broker them.


TECHNOLOGY-The other aspect is to seize your bitcoins, not by cracking the wallet's cryptography, but by cracking into your relatively unsecured computer.

o Think PRISM. The United States already has the capability and it is much easier for the government to use its corporate partners (Apple, Microsoft, Facebook, Intel, Nvidia) to secretly infect computers with loggers (for terrorism sake of course) and then unwittingly to you, simply transfer your bitcoins using your own key. This could be prevented by only storing it in cold storage but what good are they if you can't spend them. Also, if you created the wallet on a remote machine and then connect it to the internet at a later date, well it could now be compromised.

o National Level Filtering/Blocking/Censorship. Since they control the internetís backbone, they could also conceivably block all BTC traffic (this would also require the blockage of all encrypted traffic, or at least blocking unofficial encryption) as only terrorists would need to hide what they are doing. This is far more complicated as encryption does have legitimate commercial use. But they could publish government sponsored encryption for commercial means or only allow certain entities (banks, financial institutions, governments, etc.) from white-listed IPs to send encrypted traffic.

o Subterfuge. Another is to simply gain control of the bitcoin source (via developers), force an update of infected executables (they could even keep the source code clean as few actually compile their own source or even really audit the entire repository). They could undermine it by causing the a bitcoin fork similar to what happened a few years ago.

o Ownership. Through confiscation, the United States already owned a large hoard of coins. It could try to manipulate the price similar to the COMEX for Gold or Silver.

Most of these are way out there on the tin-foil spectrum, but they could be used to corrupt BTC. I think that with BTC only having a few billion in market cap, I do not even think the United States is worried about it as the technologies own (anarchist/libertarian) issues will limit its acceptance. While it might be fun to pay for a t-shirt or a cup of coffee, to think that it will be used at the same level as a government back currency is asinine. I view it as being along similar lines of gold or silver. You can buy stuff with it but the average person will be oblivious to it and compared to precious metals it will much harder for a random guy on the street to accept a bitcoin (they have to first set up a wallet). I am not saying bitcoin cannot be much bigger or smaller (it could conceivably be worth either $10 or $100,000 a bitcoin purely on the greater fool theory), I am only saying that it will never be on the same level as the U.S. Dollar (world reserve currency) or other BRIC-level national currency.

You raise some great points and I believe that all of the sanctions above are being used to some extent already.

But I disagree with your last paragraph on several points. First, the United States government is fairly agnostic on this subject. The opposition to any free currency comes from the special interests that use the federal government as a tool to wield power and control over the economy. The Federal Reserve is first on this list. The FRN has been leaking value at a constant 4-6% per year since it was "invented". More and more people are realizing that the Fed's currency is only good for paying the expenses that the Fed wishes to promote -- taxes, insurance, fines, fees, interest, assessments, licenses, etc. Joe Consumer is starting to notice.

"World reserve currency" is nothing more than a buzzword for monetary control. The bankers have absolutely no product other than control. A portion of the economy has now taken notice, and I think that is a good thing.

t00nces2
10-06-2014, 06:01 PM
The problem for the government would be that at this point, Bitcoin has too many sources. There is not a "Bitcoin server." Bitcoin is spread out all over the planet and is in too many computers. Of course, a pathogen like the Stuxnet virus, could be inserted into all computers surreptitiously. Of course, who knows they have not already done this. It would not surprise me if every computer connected to the internet has a clandestine snippet of code inserted as a back door, residing in some commonly installed program. Word? Internet Explorer? Thunderbird? Chrome? Just because it wasn't made with it doesn't mean someone hasn't been able to insert a Trojan that is not known because it has no impact on any function of a computer.

Hooah
10-07-2014, 10:01 AM
The problem for the government would be that at this point, Bitcoin has too many sources. There is not a "Bitcoin server." Bitcoin is spread out all over the planet and is in too many computers. Of course, a pathogen like the Stuxnet virus, could be inserted into all computers surreptitiously. Of course, who knows they have not already done this. It would not surprise me if every computer connected to the internet has a clandestine snippet of code inserted as a back door, residing in some commonly installed program. Word? Internet Explorer? Thunderbird? Chrome? Just because it wasn't made with it doesn't mean someone hasn't been able to insert a Trojan that is not known because it has no impact on any function of a computer.

Governments would only have to insert trojans via Microsoft Windows and Apple iOS (both American companies who proved they would follow Government orders in PRISM). I could also envision a scenario where all of our computers were compromised.

AnotherDave
10-07-2014, 10:16 AM
Governments would only have to insert trojans via Microsoft Windows and Apple iOS (both American companies who proved they would follow Government orders in PRISM). I could also envision a scenario where all of our computers were compromised.

What! And cheese off their own constituency? TPTB are using exploits in those two sellout operating systems for much more important things than Bitcoin! Smartphones too.

The major holders of Bitcoin don't use either of those operating systems anyway.

Freedompal
10-07-2014, 10:39 AM
Great, just when I thought about investing in Bitcoins!

robtmil
10-07-2014, 02:21 PM
Governments would only have to insert trojans via Microsoft Windows and Apple iOS (both American companies who proved they would follow Government orders in PRISM). I could also envision a scenario where all of our computers were compromised.

You're already there.

shades
10-07-2014, 08:33 PM
Apple already has massive infiltration going on through backdoor avenues. Just look at all the stories of malware able to use the apple products camera and mics to literally 24/7 record everything that goes on around it.

Does nobody ever wonder WHY apple thought it a "good idea" to have batteries that CANNOT be taken out, or the device rendered without power EVER, at your discretion????????

Remember in Minority Report, where Tom Cruise hides in a bathtub, to avoid the surveillance robot bugs? Well we are already past that, as everybody who owns an Iphone has given the NSA and a host of other agencies the ability to permanently track via gps everywhere you will go for the rest of your life, but the added bonus of being able to hear and permanently record via sound EVERYTHING you will ever say, or hear around you, and occasionally a bonus of SEEING all you see as well via the camera as you take the phone out of your pocket. Then the sheeple just making it all the easier by storing everything on the "cloud" which is hosted by whom??????????? and decrypted by whom?????????? just ask all those dumb celebrities who stored their naked pics on the "secure cloud" that got leaked.... you know there were hackers going through reams of data to isolate and download those pics from all the rest of the sheeples pics....

SnakeEater
10-23-2014, 02:05 AM
What they worry more is Gold economy.

Government create both side to support as well as reject so that they stand on both side to accept it when it become a success accepted by business and many. They will reject it when the other FIAT supporter gain their credit creations power.

FIAT now lies on faith and pure psychology. When BTC can be purchased by FIAT, FIAT values reside on confidence of BTC.

The worst outcome is when psychology credit become non values and cannot be used to buy anything in real world, that will be the real disaster for all similar to blood stop flowing in your body.

AnotherDave
10-23-2014, 09:04 AM
What they worry more is Gold economy.

Government create both side to support as well as reject so that they stand on both side to accept it when it become a success accepted by business and many. They will reject it when the other FIAT supporter gain their credit creations power.

FIAT now lies on faith and pure psychology. When BTC can be purchased by FIAT, FIAT values reside on confidence of BTC.

The worst outcome is when psychology credit become non values and cannot be used to buy anything in real world, that will be the real disaster for all similar to blood stop flowing in your body.

What we all fear is that others will recognize that our currencies are worthless, is that what you are trying to say?

The "value" of a fiat economy is always based upon faith, or maybe fear. Bitcoin's value is based on the faith that governments, or the institutions manipulating governments, cannot change mathematics.