Bitcoin

Bitcoin "Lobbyists" and D.C.'s Attempt to Contain the Uncontainable [UPDATED]

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Chris Moody at Yahoo! News reports on Bitcoin "lobbyists" or advocates, or as his headline (don't always blame journalists for headlines) puts it, "the people trying to make Bitcoin happen in Washington."

Of course, any true Bitcoin mavens first reaction to that is going to be: Bitcoin doesn't have to happen in Washington. It only has to happen on the blockchain and in individual owners/users (hopefully secure and possibly secret) wallets.

That is the important point about Bitcoin and should be front and centered in any discussion about the politics that haunt and hound the protocol and the cryptocurrency. Still, as I wrote last May, while government can neither make Bitcoin happen nor stop it from happening, it can try to make life difficult and annoying for its users, whether that comes in taxing your profits or arresting you for allegedly using Bitcoin to "launder money."

The piece discusses the Bitcoin Foundation and Jerry Brito, who has written early and often for Reason on Bitcoin issues—see his groundbreaking December 2013 feature on all the ways Bitcoin will likely change the world beyond being an awesome currency.

It also limns a split in the ideological and practical world of Bitcoin I've written about before. As I put it back in April:

between the crypto-anarchists from whom Bitcoin arose and who were its first adopters, and the big-time legitimate businesses stepping in to normalize the market, who would just as soon lose the stink of weirdo anarchism surrounding Bitcoin that can scare off big money. 

Moody's story talks of:

an independent San Diego, California-based entrepreneur named Brett Stapper, the founder of Falcon Global Capital, [who in late May] filed paperwork to lobby Congress on cryptocurrency issues. In an interview with Yahoo News, Stapper said he's in the process of coordinating with a law firm—he won't say which—to organize lobby days and post a "practical guide" to Bitcoin online.

"We want to work with regulators. We want to work with governments," Stapper said. "We're not libertarians who see this as a thing that is possible on a massive scale without the help of these organizations."

All the people already using Bitcoin on scales small or massive would choke at hearing this.

[UPDATE: Stapper writes me this morning to say he considers himself to have been misquoted by Moody. He tells me, rather, "I said I am not a radical libertarian who wants to burn government buildings and bring down the banks. Bitcoin will of course operate without the support of government or regulators however, I feel that if we can properly educate them, it will be in the best interest of Bitcoin."]

[Back to original post] 

 Moody does a good idea getting across exactly how weird and inexplicable Bitcoin likely seems to most old congressfolk—though his lead does a good job pointing out as recently as 40 years ago the way we now use credit cards might have seemed equally far-out—and then hits the reader with a series of questions that might seem very important in Washington but not at all to most Bitcoin users:

For policy and regulatory purposes, Bitcoin's transformative technology blows open a hive of questions. Is it currency? Is it a commodity? Is it property? Will it threaten the almighty dollar? Which agency should regulate it? How should it be taxed? Should vendors that trade bitcoins be treated like banks? Can I accept bitcoins as campaign donations? Is it dangerous? Should we ban it?

Well, it is what it is, to the first three questions. Probably, none, ideally not at all but the community seems able to live with it being taxed as property (as I reported in April), no, yes, no, and no.

Moody closes with a useful summation of some ways the state is recognizing or normalizing Bitcoin:

In May, the Federal Election Commission announced new rules allowing candidates to accept Bitcoin donations. Since then, Texas Republican Rep. Steve Stockman and Colorado Democratic Rep. Jared Polis set up accounts to take donations on their websites. Carl DeMaio, a Republican challenging Democratic incumbent Rep. Scott Peters in California, has directed his campaign to establish a Bitcoin page as well. The Libertarian Party (of course) was the earliest political party to accept such donations.

A month before the FEC announcement, a company that specializes in "Bitcoin ATMs" set up one of its machines in a congressional office building and Polis used it to buy $10 worth of bitcoins as a curious Virginia Republican Rep. Bob Goodlatte, the chairman of the House Judiciary Committee, looked on.

Moody also wraps up with some of the things that are at stake in trying to stymie Bitcoin, in a way that any human of good will should be able to grok:

Washington's Bitcoiners go to great lengths to point to its potential, especially for poor and oppressed people. Bitcoin, they say, has vast potential to revolutionize the way we transfer money and purchase goods and services. In impoverished, rural areas where people lack access to banking institutions, Bitcoin users can send and receive money wherever they can access the Internet on a computer or a phone. (Bitcoiners use the term to describe these people—"the unbanked"—with the same concern a Southern Baptist might have referring to "the unchurched.") For immigrants who need to send money to families in their home countries, Bitcoin would make it easy and relatively cheap.

Bitcoin could also be useful to those living under oppressive government regimes, advocates say, allowing them to support illegal speech or causes without fear of censorship. 

And of course it promises to be the Internet's latest way to make us all richer by wiping out middlemen who skim off of transactions, the need for whom the technology obviates:

The growth of Bitcoin could, of course, undermine and disrupt fee-charging money-transferring services such as MoneyGram and Western Union; both are now considering adding a Bitcoin option.

"If I were a company like [that], I would be very afraid," [lobbyist Mary Beth] Stanton, who has advised the Bitcoin Foundation, said.

A worldwide embrace of the Bitcoin protocol could pose serious risk to the remittance and banking industries, which has prompted them to keep a close eye on its development. Last month, a federal lobbyist filing disclosure for MasterCard listed "Bitcoin" as an industry it would focus on.

Bitcoin's famously up and down dollar prices seem to be above $650 again on most exchanges today.

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  1. Article was so good it was worth posting twice!

  2. Clean up on H&R aisle; spilled articles!
    “Bitcoin “Lobbyists” and D.C.’s Attempt to Contain the Uncontainable”
    “Bitcoin “Lobbyists” and the Attempt to Contain the Uncontainable”

  3. Mistakes were made, corrected, leading to bigger mistakes, which might now be corrected.

    1. My comment!!! My beautiful wonderful comment lost forever!!

      1. My reply to your wonderful comment!

    2. Brian Doherty|6.2.14 @ 9:54PM|#
      “Mistakes were made, corrected, leading to bigger mistakes, which might now be corrected.”

      Brian, I seem to recall traveling that path from time-to-time, occasionally *REALLY* screwing up before finally fixing it.

      1. Sounds like a character arc.

        Tell me, Sevo, do you often feel as though you’re being watched? Guided, even? Perhaps narrated?

  4. It’s interesting to me, on the Bitcoin as a threat to the dollar idea, it really isn’t (as Corning said in his beautiful wonderful comment).

    BTC Isn’t a threat to the dollar. The planners that run the dollar (and the ones that did so for the last 30 or 40 years) are the threat to the dollar. BTC *may* be there to serve as a safety valve.

    It’s interesting, though. The Fed really doesn’t have any control over the dollar anymore. QE was a desperate attempt to get something going. It’s not like they can lower interest rates.

    Which is a fun realization — I’d been assuming the manipulation was huge. Now I’m thinking there really isn’t much ability to manipulate.

    1. as Corning said in his beautiful wonderful comment

      I will assume that Corning’s comment contained within it the keys to the meaning of life of a wisdom once thought unachievable by all but an omniscient God.

      But because of Brian’s error, it was forever lost into the ether and man will continue squeaking out a meager existence, rudderless and wholly without joy nor salvation.

      1. It just said what you think it would say from me:

        “The big bang is bullshit.”

    2. It’s interesting, though. The Fed really doesn’t have any control over the dollar anymore. QE was a desperate attempt to get something going. It’s not like they can lower interest rates.

      How did the FED use to give out money that they printed from nothing before they had QE?

      They could do that in vast quantities.

      It is the only play they have in terms of control…to inflate the crap out of it….and being the only lever they can pull i suspect they will pull it.

      There is already talk about using inflation to “fix” the “problems”.

      One thing that is interesting is Bitcoin although not inflationary does have a shit load of alt-coins competing against it. In essence crypto currency can be printed like fiat is…yet when you combine the market cap of all the alt-coins up it is still a small fraction compared to the market cap of Bitcoin.

      The market is free to inflate yet it chooses not to.

      1. Isn’t the point of bitcoin that it’s algorithmically capped at a steady, minor rate of inflation?

        1. Yes, however you can use the open source architecture that bitcoin is based on and set the inflation rate to whatever you desire. Some of the alt-coins have set it reeeeally high. I feel like in a lot of ways Bitcoin is going to give birth to Friedman’s dream of a currency with mechanized inflation rates.

          1. Even if all the alt coins had a small limited run like bitcoin they could always make a new coin…

            This is what i was referring to.

            Cryto-currencies including bitcoin and all alts could be inflationary simply because the market could print a whole new coin…yet the small market cap of the alt coins compared to bitcoin’s market cap suggests that the market likes the deflationary nature of bitcoin.

        2. well its growth slows pretty quickly and their is a theoretical cap of about 21 million.

          I think there are 12 million coins right now which took 5 years to mine…the rest will come slower and slower with time pretty much finishing by 2050 or something.

          There will be no more doubling of the number of coins ever….in contrast I can see the US government doubling the amount of fiat in 5 easy.

          But yeah there was an initial phase of inflation of bitcoin which is was intended to encourage the build out of its torrent like network and through mining distribute it somewhat broadly.

          Also i think any inflation has been swamped by growing adoption (demand). Its price rise over the past 5 years is evidence of that.

  5. “We want to work with regulators. We want to work with governments,” Stapper said. “We’re not libertarians who see this as a thing that is possible on a massive scale without the help of these organizations.”

    Fuuuuuuck you.

    1. We’re not libertarians

      I think he is either lying or just does not understand it.

      Hard to imagine a private currency that is controlled by math as not fundamentally libertarian.

      Maybe he thinks Bitcoin is full on capital “A” Anarchy.

      There was an opinion piece a few months ago by a Reddit founder talking shit about Bitcoin and all the libertarians that orbit it then went on to brag about how awesome Dogge is and how it is being used on reddit.

      Made me chuckle. As if Dogge isn’t a private currency that directly competes with government controlled Fiat and central banks just like Bitcoin is.

    2. Don’t get angry. He is serving our cause whether he means to or not.

  6. Is it currency? Is it a commodity? Is it property? Will it threaten the almighty dollar? Which agency should regulate it? How should it be taxed?

    It is income, just like anything else that comes into your hands in big enough quantities of which the government takes notice.

    Win a car on Oprah: income. Find out your family is the ‘owner’ of a priceless painting recovered from the Nazis? Income.

    1. Keep it secret.

      1. Is it secret? Is it safe?
        One Coin to rule them all.

  7. Politically diverse Seattle City Council unanimously passes $15 minimum wage.

    Seattle City Council gives final OK to historic $15 minimum wage
    Seattle City Council approves a $15 minimum wage, creating a path over the next seven years to provide the highest minimum wage in the country.

    http://seattletimes.com/html/l…..texml.html

    1. I went to your Seattle Times link and found only one columnist with even the slightest doubt that this might not work out. But even he piled on the progressive derp, essentially saying that if only CEOs took smaller salaries, there’d be enough to double everyone else’s wages. Also, a guy who owns a Burger King franchise will “still be able to own his yacht.”

      I’m not sure any of these guys know how to do math or even have met someone who owns a small business:
      ____________________________________

      Don’t get me wrong. The crusade for $15 led by Councilwoman Kshama Sawant is an entirely rational reaction to the hollowing out of the middle class, the superrich taking a record amount of national income, major companies mooching off public subsidies for their low-wage workforce and the lower four quintiles of household income being virtually stagnant since the mid-1970s.

      Unfortunately, the causes of the collapse of the middle class are national and international in scope. They have been decades in the making.

      Among them: destruction of strong unions, undermining of progressive taxation, deregulation, mergers and the rise of highly concentrated industries and monopolies, ill-advised trade agreements and increasingly sophisticated technology.

      All this has not only caused the wage crisis, it has killed jobs by the millions. Today, we have a surplus of workers, nearly three seeking every opening.”
      _______________________________

      Solution: double the minimum wage!

      1. The thing I just never can see in all this — how does raising the minimum wage help the “middle class”? It will help some in the working poor temporarily (unless they get laid off, and until inflation catches up with them). And the superrich that they keep claiming are the targets of all this aren’t going to be affected in the slightest. In fact, the people I think will be hurt the most by this will be the middle class. The inflation this will cause will damage their savings, suddenly their hard-fought level of income won’t be much higher than a high-school dropout’s, and those who make a living by running a small business will likely have to lay off some people and do twice as much work themselves just to maintain the status quo.

        But the only people they ever interview in these stories are 19-year-olds who work at Subway, who themselves certainly don’t believe that will be the pinnacle of their careers. How about a legitimate interview with the guy who runs the car wash?

    2. Ok. So the reality is that they passed an $11 minimum wage for April 1 2015 with promises to eventually get it to $15…

      That’s a bummer, cause I really wanted it to be sudden and jarring. I gotta start making plans to move to Seatown though. $15/hr. in fast food? Not bad work…if you can get it..

  8. Reposted from independents thread in case it is dead.

    Question for any manly-man libertarians who know how to build stuff:

    I’m getting a new washer and dryer soon (front load for energy efficiency) and am concerned about the noise and vibration throughout the house, especially since I have a baby coming soon.

    What is the best way to isolate/mitigate the sound and vibrations? False floor/stand filled with sand? Rubber sheeting under or over the plywood? Build a cabinet around the back and sides of it and foam seal the corners?

    Thanks
    P.S. Please assume I know nothing and keep it simple. Pretend you’re explaining to your wife.

    1. Two pieces of advice…

      This is clearly the first baby. You’d be surprised as to what won’t wake up a baby. The drone of a washer and dryer really aren’t the kind of things that put a baby to sleep.

      In fact, I like a noisy dishwasher because the white noise is very relaxing.

      But enough about me.

      You could simply put them on some hefty plywood, no less than 3/4″, probably 1″, and place some really thick and as soft as possible rubber feet on the four corners.

      Here’s an example of a heat pump with thick rubber pad for isolation:

      http://www.soundproofcow.com/i…..400-01.jpg

      1. aren’t the kind of things that put a baby to sleep.

        Should be ‘aren’t the kinds of things that keep a baby awake’

      2. Third baby. The washer always wakes the kids up.

        Thanks for the link.

        My little brother is a sound control engineer, but he doesn’t want to help me out. Just got a new girlfriend, and he’s being selfish…

        1. Third baby. The washer always wakes the kids up

          Third baby?!

          So… I have to ask… is your washer/dryer set up in an upstairs attic with thin or no subflooring?

          What part wakes them up? If it’s that godawful BZZZZZZT that the newer washer/dryers do, not much will isolate that beyond turning the whole room into a recording studio.

          I’ve seen some serious sound isolation stuff done for industrial machines, but that required cutting a channel on the concrete floor and placing the machine on a pad physically separated from the rest of the concrete with rubber dampening etc.

          Good luck.

          What’s the date for #4?

          1. I’m cutting my balls off. No #4.

      1. Thanks.

    2. Pl?ya Manhattan.|6.2.14 @ 11:43PM|#
      “Reposted from independents thread in case it is dead.”
      You got an answer over there.

      1. Thanks. Are yours front loading?

        1. Huh, video suggests 3/4″. I’d place the rubber feet underneath– which the video doesn’t mention.

  9. OT: Derp of the day:

    I have a lot of friends who grew up in the USSR, or Yugoslavia, who describe what it was like. You get up. You buy the paper. You go to work. You read the paper. Then maybe a little work, and a long lunch, including a visit to the public bath? If you think about it in that light, it makes the achievements of the socialist bloc seem pretty impressive: a country like Russia managed to go from a backwater to a major world power with everyone working maybe on average four or five hours a day. But the problem is they couldn’t take credit for it. They had to pretend it was a problem, “the problem of absenteeism,” or whatever, because of course work was considered the ultimate moral virtue.

    1. Someone’s conflating military power with economic power. Russia was never the latter.

      Based on this logic North Korea is even MORE impressive since they’ve been doing it longer.

    2. Most of my clients are F100 corps, and I am pretty sure that 95% of their employees work maybe 3 hours a day. And they don’t have to wait in line for bread, so there’s that.

  10. A few questions for anyone who is a true BTC nerd here. Would the widespread adoption of BitCoin result in a calming effect on worldwide currencies? As BTC is essentially fiat currency, would the mass transfer of national currencies into the BitCoin system essentially pull excess currency out of circulation, and help lower the inflationary pressures of their overprinting? On a related note, if a BitCoin exchange collapses, doesn’t that prop-up the currencies that were used to purchase BitCoin in the first place? I don’t see BitCoin as solving worldwide inflation, but its possible role as a “relief valve” is an interesting aspect of the currency I hadn’t pondered before.

  11. Bitcoin offers no shield against force even if it does provide the wielders of force and growers of force impetus for wielding and growing force more vigorously.

    Forfeiture laws already exist. If you, the individual cannot PROVE to the state that your property was obtained through legitimate, as they define it, means, then you lose it.

    Enforcing such laws pervasively may require individuals to provide an exhaustive inventory of possessions along with their income tax returns. Force don’t care about the burden on the individual or about their strong feelings regarding the consequences of their rub-your-head-and-pat-your-belly strategy for “defense” of liberty against oppression.

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