U.S. regulator mulls BitCoin rules

Thats a good way to crash the Bitcoin market...

The same 'regulators' who arranged the carpet bombing of Wall Street with dollar bills?

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Since there are no physical "BitCoins", Chilton argues that people investing in the currency are not participating in the cash markets, and are then in the remit of the CFTC's regulatory mandate.

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I don't see how physical paper would make a difference...if they printed a handful of physical bitcoin certificates would that do anything? Since inception, but especially in the last few years, the fed has been making US dollars out of thin air and not bothering to print them. The problem was so bad that they had to stop exchanging gold for dollars because there simply wasn't enough gold to keep doing it...and that was decades ago; long before they started doing this on the scale they do it today. If bitcoin isn't a currency because it is just perceived value, then the US dollar isn't currency either.

Well, here is a hint to bitcoin...print a few dozen bitcoin certificates ASAP. Then, when this guy tries to destroy you, you have a moronic answer to his moronic standard.

Originally posted by KillerBug:

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Quote:

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Since there are no physical "BitCoins", Chilton argues that people investing in the currency are not participating in the cash markets, and are then in the remit of the CFTC's regulatory mandate.

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I don't see how physical paper would make a difference...if they printed a handful of physical bitcoin certificates would that do anything? Since inception, but especially in the last few years, the fed has been making US dollars out of thin air and not bothering to print them. The problem was so bad that they had to stop exchanging gold for dollars because there simply wasn't enough gold to keep doing it...and that was decades ago; long before they started doing this on the scale they do it today. If bitcoin isn't a currency because it is just perceived value, then the US dollar isn't currency either.

Well, here is a hint to bitcoin...print a few dozen bitcoin certificates ASAP. Then, when this guy tries to destroy you, you have a moronic answer to his moronic standard.

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That's not entirely accurate. It wouldn't matter if there wasn't "enough gold" because with a Gold Standard the government has to set the value of the gold per Oz. I can't remember how much it was when the Gold Standard was abandoned by the Nixon administration. The U.S. was actually quite late to drop the Gold Standard in global terms. IIRC, it was dropped temporarily between WWI and WWII because of the cost of the war effort, but it wasn't until the 1970's it was officially discarded by the U.S.

The only reason it was that way in the first place was out of tradition, a sort of a remnant from the days when Goldsmiths issues certificates based on their gold holdings. While you could theoretically fight currency inflation with a Gold Standard, you are guaranteeing that price stability goes out the window. That was the last straw for the U.S., consumers paid varying prices for food, fuel, housing etc. at different points over short spaces of time, it was major headache for the administration.

The problem is the limiting factor of the precious metal means that the economy can grow faster than the money supply. Population growth, productivity growth etc. but only a fraction (around 7% or so in modern times) of the world's total yearly gold mining output is down to the United States. With that kind of lag, you cannot stabilize a cost of living and without an adequate cost of living for the working and middle class, your economy is in big trouble.

As for making physical BitCoins, I'm no expert on U.S. law by any means but I'm sure that using a different currency is not entirely legal? I think the point of this regulator is people are speculating on the future value of BitCoin and in that way its an investment and not a currency, but I don't think the regulations fit, I don't think he realizes that BitCoin is actually a "digitally mined" resource, it takes quite a bit of processing to mine a single BitCoin. I don't think it can be regulated in any way to be honest.

The US dollar was 25% backed by gold, until Richard Nixon removed that requirement. There is not enough gold in the world to back every nation's fiat money.

We have the present financial melt-down from the Bush de-regulation mindset. The Great Depression, was made possible by lack of financial regulation. The small investor took a bath, the manipulators are called investment bankers.

The enslavement of people to the printed paper of any nation insures the permanence of the issuer.

The bit coin problem come from manipulation not intended by the creators.

Originally posted by ThePastor:

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Thats a good way to crash the Bitcoin market...

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That's the intent. The government doesn't want to loss of control over it's people that a competing currency would provide. And the banks don't want their loss on the monopoly of debt enslavement that a non arbitrarily inflatable currency would bring.