coinman

For anyone who's directing their rage at MtGox for this, that should not be the target.

We should be outraged at the banking system and the lawmakers instead. They are the ones who are putting roadblocks on to MtGox, as these documents prove.

MtGox does not operate a MSB according to the laws in Japan, so if it has a bank account in the US, how does it make it a MSB?

Besides, the FinCEN guidelines are not clear for Bitcoin. For example, there's no clear definition for what is a "User" and what is an "Administrator".

Being P2P, users are administrators at the same time. (You don't necessarily need to mine bitcoins to be an administrator, if you're a user, then your client still needs to do administrative tasks such as relay transactions across the network)

Besides, bitcoins should be considered as virtual messaging service, rather than a currency as in the traditional sense of the word. In essence, Bitcoin is a distributed messaging network. (When bitcoins are bought, the buyer is actually paying the seller to send a message to the network).

We need better, clearer guidelines on this.

A good comparison:

Current estimated power consumption of the Bitcoin network: 1.67 Mega watts. (6,028.57 megawatt hours http://blockchain.info/stats).

Typical power generated by a single Boeing 747: 140 Mega Watts. There's hundreds of these flying right now, yet no-one is appalled about the carbon footprint. http://en.wikipedia.org/wiki/Orders_of_magnitude_(power)

At present we're in a 'gold rush' phase, and the rewards from mining result with a large amount of resources being spent on it.

Mining rewards will diminish over time so it will no longer be feasible to mine as much as in the 'gold rush' phase. So the carbon footprint will not be growing all the time.

In fact, there's a race to make the current hardware to become more power efficient. If you live in a sunny place, you could probably pick up 240 Watt solar panels for around $300, a connect a Raspberry pi @ 3.5 watts, then a 10 GH/s Erupter blade @ 75 watts.

In a way, bitcoin itself is not really a currency, or money, it's more like an idea for exchanging messages. Bitcoin is really a decentralized messaging system which relies on cryptography and proof-of-work to maintain integrity. Should exchanging messages in the form of "I owe you x amount" over a p2p network be regulated or be made illegal?

However, The fact that it's used as a form of currency is just an interpretation of what Bitcoin is. There can be other interpretations for what bitcoin-type system can be used for, for example Namecoin is used for name registrations. The judge declared that bitcoin is money by making an interpretation.

If anything, Bitcoin is just software. It will be very difficult to regulate.

1. Software using encryption is protected speech (http://en.wikipedia.org/wiki/Bernstein_v._United_States). Regulating bitcoin as in bitcoin the software would be a form of censorship.

2. Bitcoin uses many of the standard principles of cryptography we already use in e-commerce. Banning cryptography would have enormous consequences for the economy of the internet in general.

3. Banning or regulating p2p would cause an uproar.

4. If buying bitcoins in exchange for dollars is really exchanging a string of bits for money, then if this is banned or regulated, would it also ban buying software or other digital goods for money?

5. The regulations can't be too broad, but can't be too narrow. Would the laws restrict only bitcoin as a currency or other applications of bitcoin as well? If too broad, then they will unintentionally restrict other uses of bitcoin too. If too narrow, a new system will pop up again.