This is incredibly easy to do, when 99.9% of the world relies on above-the-board banking to get shit done. My landlord doesn't accept rent payments in bitcoin, just like he doesn't accept payments in hooch, heroin, or pirate treasure - especially if it were illegal.
At some point, your internet crime ring will have to procure goods from the rest of the world. If the government wanted to crack down on it, they very easily could.
The underground drug markets only work because illegal drugs enjoy enormous profit margins (And because they are incredibly easy to conceal), due to lack of legal competition... And because, unlike crypto-currencies, cash transactions are common and untraceable (Which makes money laundering possible.) How is your illegal self-driving car company going to make those margins? How are they going to be able to afford to pay off all their suppliers (Who will charge a premium due to the legal risk), to keep your operations under wraps? How are you going to get customer to pay you, when it's illegal to drive your cars round town?
During prohibition, Al Capone was running moonshine, not beer. There weren't enough margins in beer, to risk federal prison. There aren't enough margins in <Whatever illegal bitcoin business you want to run, that doesn't involve a meth lab, or burning people alive in oil drums>, either.
You're saying that there cannot possibly be large enough margins in anything to risk federal prison, which is self-evidently false. Your whole argument relies on declaring crypto currency as contraband, but contraband items are popular because they have inherent value to the consumers rather than simply being a medium of exchange.
It's much easier to proscribe the possession of child porn, hand grenades, or heroin because it's easy to demonstrate the harm of allowing free traffic in such items. Prohibiting voluntary arrangements that don't inherently have first-order harm effects is more difficult. Thus there isn't much opposition to heroin remaining a controlled substance - junkie life sucks - but prohibitions on cannabis use are collapsing left and right because people can see that smoking weed is unlikely to wreck your life.
Of course I don't expect you to get familiar with my comment history, but I'm heard all these basic roadblocks to crypto currencies because I've made many of these same arguments myself in the past. The existence of unsolved problems does not mean that the problems are insoluble.
> You're saying that there cannot possibly be large enough margins in anything to risk federal prison, which is self-evidently false.
No, I'm saying that outside of drugs, assassinations, and moonshine in countries following Sharia law, there aren't large enough margins in anything to risk federal prison.
> Your whole argument relies on declaring crypto currency as contraband, but contraband items are popular because they have inherent value to the consumers rather than simply being a medium of exchange.
Crypto currency is not contraband - but if you are using crypto currency to run a contraband business, you can be shut down by applying pressure on the parties you transact with. The easiest way to do this is by going after the exchanges.
For example, if the feds really wanted to take away all of Ross Ulbricht's money, they could make it illegal for a BTC exchange to accept in payment a bitcoin that, after a particular point in time, ever touched the Silk Road wallet. This would have made his coins de-facto unspendable - and the feds have the ability to do that, given that the exchanges interface with the USD economy.
> It's much easier to proscribe the possession of child porn, hand grenades, or heroin because it's easy to demonstrate the harm of allowing free traffic in such items. Prohibiting voluntary arrangements that don't inherently have first-order harm effects is more difficult.
That's correct. However, we are discussing using a blockchain to run a company that 'can't be shut down'. What exactly would you be selling, that makes it worth the trouble?
I don't want to sound like a smartass but you need to get out more. There aren't large enough margins for you to imagine risking federal prison. Read enough criminal cases and you'll be astonished at what people get up to and the risks they're willing to accept.
There was a guy in my neighborhood who was a politician - first on the school board, then a city supervisor, then a state legislator. A real American success story - straight As in school, first from his community to succeed in getting elective office and worked very hard for his constituents, a guy who'd be outside the subway station at 6am during election season on his own to shake your hand and ask for your vote (which was the last time I met him in fact).
Anyway, he's currently sitting in federal prison for arms trading in automatic weapons and rocket-launchers which he bought from Islamic rebels in the Philippines and attempted to resell to the FBI. Why? Because under his pillar-of-the-community exterior, he secretly longed to live the life of a gangster/warlord and had dreams of disappearing off to the jungle to do it full time. I swear to you that I'm not exaggerating even a little bit.
Now for general adoption of a crypto currency you're right, most people don't want to deal with anything riskier than buying weed or driving on an expired license. But consider that it may only need a small number of people with a very different risk calculus to create a viable marketplace.
When I say crypto isn't contraband, I mean that people's attitude toward it is different. If you are caught with contraband lots of people will say 'tough, that contraband is illegal to possess for good reasons you bad person.' But if you are caught with illegal cryptocurrency that you acquired in some otherwise legal business activity (just getting paid in coin rather than $), that won't seem like that big of a moral issue to most people. That creates a problem for prosecutors, since jurors might choose not to convict.
That's correct. However, we are discussing using a blockchain to run a company that 'can't be shut down'. What exactly would you be selling, that makes it worth the trouble?
Nothing, necessarily. Suppose that rather than trafficking in goods my intention were to undermine existing currencies through legal competition. In a way the high utility of cryptocurrency for black-market transactions is a drawback because it delays popular adoption due to guilt by association. Then again, that's probably just as well while the technical and philosophical wrinkles are ironed out.
At some point, your internet crime ring will have to procure goods from the rest of the world. If the government wanted to crack down on it, they very easily could.
The underground drug markets only work because illegal drugs enjoy enormous profit margins (And because they are incredibly easy to conceal), due to lack of legal competition... And because, unlike crypto-currencies, cash transactions are common and untraceable (Which makes money laundering possible.) How is your illegal self-driving car company going to make those margins? How are they going to be able to afford to pay off all their suppliers (Who will charge a premium due to the legal risk), to keep your operations under wraps? How are you going to get customer to pay you, when it's illegal to drive your cars round town?
During prohibition, Al Capone was running moonshine, not beer. There weren't enough margins in beer, to risk federal prison. There aren't enough margins in <Whatever illegal bitcoin business you want to run, that doesn't involve a meth lab, or burning people alive in oil drums>, either.