"What is called the dark web, also known as the deep web... (was) deliberately built to be untraceable, to protect the anonymity of the user." Sen. Tom Carper, Nov. 18, 2013 on CSPAN3, during the introduction to today's hearing on decentralized virtual currency.
As was to be expected, the panel's regulators in government focused on the worst possible imaginable crimes that they could dig up, attempting to connect them to bitcoin and other virtual currencies, in order to try to portray virtual currencies in an unfavorable light. Interestingly, at no point during the hearing did any of the regulators who gave testimony make reference to decentralized virtual currency - in fact, their testimony completely failed to truly mention it or attempt to put it in a coherent sentence - nor did they acknowledge that such decentralized currencies are already beyond the control of governments.
Time and time again, courts in the United States have ruled to protect the right to anonymity. One such case, in 1995, cited by Electronic Frontier Foundation
in its defense of anonymity, included a decision by the US Supreme Court that "protections for anonymous speech are vital to democratic discourse," asserting that anonymous speech "exemplifies the purpose behind the Bill of Rights, and of the First Amendment in particular: to protect unpopular individuals from retaliation... at the hand of an intolerant society." In point of fact, today, Monday Nov. 18, 2013, the Electronic Frontier Foundation scored a significant victory that is now resulting
in the release of hundreds of pages of documents from the government about the use of the unconstitutional Patriot Act, the use of which by government is currently being challenged in the courts.
Faced with this fact - and beyond any law on the books or interpretation of any law by the US Supreme Court, the fact that the strongest of decentralized currencies
today is now immune to government attack -- the only thing that regulators in the hearing could do was to ignore and evade discussion of the most meaningful financial development to arrive on the scene in the United States since the production of the first US dollar. Even a strong equilibrium attack run cheaply by governments against the bitcoin network
would ultimately fail to do anything other than delay transactions for a day or two -- it would not be able to shut down the distributed, decentralized bitcoin network. And so, with grim faces, the regulators on today's panel did the only thing they could: ignore the decentralized virtual currency issue entirely. The discussion was not a total loss, though: the second group of panelists (notably, none of whom were regulators) did not fail to take the opportunity to discuss decentralized virtual currency.
Here follow the most notable quotes from first the regulator panel, with the rest of the panelists' remarks shown in the order of the time they appeared:
Jennifer Shasky Calvery, Director of US Treasury's FinCEN:
"We work to achieve (our) mission by implementing the Bank Secrecy Act... Illicit actors might decide to use virtual currency... (it's) relatively anonymous.... does not typically have transaction limits.... may have been created to facilitate money laundering..."
"(This) is not nearly theoretical..." (References Liberty Reserve, Silk Road)
"It is also important to put virtual currency in perspective... Approximately 8 billion dollars in transactions (in virtual currency) over the past year."
"It is in the best interest of virtual currency users to comply with (our) regulations..."
Of course, anyone who is serious about their bottom line will not comply with additional burdensome regulations. People are at this moment pursuing development of bitcoin anonymity solutions, including but not limited to,
CoinJoin and
DarkWallet (the latter of which has already exceeded its funding goal). In a day's time, the CoinJoin fund to support the development of strong cryptographic anonymity solutions has jumped from
16 BTC to over 31 BTC - a growth in value, at present prices, roughly equivalent to a collective donation by multiple individuals over a day's time of $10,000 USD (approximately doubling the amount the account already had). Exchanges that might face additional burdensome regulation will simply jump outside of USA borders, or locate on newly developing "
offshore business platforms" which are maintained out at sea. If exchanges find that the regulatory environment makes it too tough for them to operate through websites, they can now
fully distribute their bitcoin exchanges and related markets, so that no matter where they are in the world, they will never be able to be shut down due to the nature of decentralization. Thus, it is
not in the best interest of virtual currency users to, in the words of Jennifer Shasky Calvery, "comply."
It is in our interest to do what we please, either as individuals or associations, inside or outside the confines of today's 'nation-state of antiquity.'