Watching US Senators grapple with Bitcoin’s existence is disturbing.
There’s a legitimate discussion to be had, of course, with regard to regulation and how to find ways to keep watch over transactions that use it. Since Bitcoin is a currency – a means of transferring things and wealth in a symbolic way – it’s absolutely natural to expect that both honorable and criminal enterprises should find it useful. Regulation and oversight are reasonable to deploy as a way to hopefully slow the criminal side of things, or at the very least to catch criminals and make them pay a lot of fines. And it’s far better to regulate it than to stick our collective heads in the sand, ban it and then pretend that proxy servers and international banking don’t exist.
This isn’t unique to Bitcoin, of course. We’re supposed to watch over transactions that use the US dollar, too; otherwise, people might use dollars for the drug trade, or manipulate foreign exchange rates for their own benefit. Er… well, I guess we shouldn’t expect a miracle from Bitcoin regulation then, either. But if it is to be officially recognized as a currency, it’s going to need to shift over and wear Big Boy Pants and bow to regulation here and there.
It’s mildly disappointing to see so many people miss the reality that regulation doesn’t eliminate criminal activity, and that people will use EVERY currency, virtual or otherwise, for nefarious doings. But that’s not disturbing to me. What’s disturbing to me is how much trouble the Senate Banking Committee seems to be having with something they’re supposed to already know about.
From the WSJ’s article, “Senators Grapple With ‘That Bitcoin’ In Second Hearing“:
“I have been worried about that bitcoin some,” said Sen. Mark Kirk (R., Ill.)
Sen. Mark Warner (D., Va.), noted that “I’ve been following the development of bitcoins for the last two months and I think I’m only starting to wrap my head around the potential upside [and] downside.”
“Are bitcoin wallets … going to replace the Swiss bank account?” asked Sen. Jeff Merkley (D., Ore.), referring to possible tax evasion.
It’s like watching a bunch of people stand around two buckets and a hose, and the whole crowd is slapping their foreheads in amazement and yelling at each other, “Oh well my gracious, that water’s moving all by itself! Why, it’s almost alive! I ain’t never SEEN something so impossible.” Geez, people, it’s just a siphon. Yeah, it’s neat and interesting and fun, but five minutes of explaining and five minutes of just thinking about it should lock the physics in place for most people.
Bitcoin’s the same thing. Geez, people, it’s just a currency. Sales tax and exchange rates and secret bank accounts? Don’t we regulate that already? It’s not that hard to adapt a system and put it into place for Bitcoin, too. It’s not going to work all that well — our national currency regulation doesn’t, so why expect Bitcoin regulation to be any better? — so just make a reasonable adjustment, put it in motion and move on. And please stop slapping your foreheads in amazement.