The article is interesting in that it quotes Dutch Finance Minister Jeroen Dijsselbloem saying:
"Bitcoin is not electronic money… At present its eventual impact on the real economy seems negligible…Bitcoin is not a financial product as defined by law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply."
Then the article goes on to say:
ingredients are in place to make Amsterdam a city with a lot of Bitcoin in its future.
And the article then lists a lot of the benefits of having Bitcoin as an unregulated 'local currency', aka a commodity. This is a dangerous place for Bitcoin. If it grows too much, it will be recognized as a currency and regulated. If it grows only slightly, then it will not see any real use outside of the small group that already uses it. In the latter case, people like the author of the article stand to benefit a fair amount. In the former case, people like the author of the article stand be driven out of business, or have their business model impaired, by regulation.
If the point of the article was to convey that this is a golden age for Bitcoin in Holland, then it has achieved its purpose. If the point of the article was to make it seem that significant adoption of Bitcoin in Holland lay ahead, or that it would be a good thing, then it has not done so. In fact, that would be an entirely different article that would have to include more factual and historical analysis than this article even bats an eye at.
Today there are far more people who would be very interested in risking investing in Bitcoin and accepting Bitcoin for their service, than there are people who have heard of it. Every attack on any Bitcoin business brings in more people and their capital from around the world than the wealth it destroys. If Netherlands one day starts hurting Bitcoin business on big scale, it will create a resonance that will increase Bitcoin awareness and utility 10x the same year.
Also, the first country that will allow Bitcoin flourish will attract such an enormous amount of capital, it will make news everywhere and it won't be that easy to shut down business anymore.
it will be recognized as a currency and regulated.
I'm still wondering how any government would plan to "regulate" it. In the same way a lot of contractors want to pay by cash so they can go under the table on their annual income for tax purposes, if you don't publish a link between your bitcoin address and yourself then it would be impossible for a government to oversee your bitcoin activity until you somehow tied a transaction back to your real identity.
The world black market is estimated to be 2 trillion dollars (http://en.wikipedia.org/wiki/Black_market). It will only be bigger, but governments will still be able to tax land, real estate and big companies.
However, without inflation, QE and ad-hoc confiscations, no government will be able to have "budget deficit". That is, no government would be able to "borrow" money from nothing to build stuff for "free" for their electorate.
Since no politician will be able to do "free" stuff without raising taxes, no one would elect any government at all. This all brutal nonsense will simply fall out.
Comments
The article is interesting in that it quotes Dutch Finance Minister Jeroen Dijsselbloem saying:
"Bitcoin is not electronic money… At present its eventual impact on the real economy seems negligible…Bitcoin is not a financial product as defined by law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply."
Then the article goes on to say:
And the article then lists a lot of the benefits of having Bitcoin as an unregulated 'local currency', aka a commodity. This is a dangerous place for Bitcoin. If it grows too much, it will be recognized as a currency and regulated. If it grows only slightly, then it will not see any real use outside of the small group that already uses it. In the latter case, people like the author of the article stand to benefit a fair amount. In the former case, people like the author of the article stand be driven out of business, or have their business model impaired, by regulation.
If the point of the article was to convey that this is a golden age for Bitcoin in Holland, then it has achieved its purpose. If the point of the article was to make it seem that significant adoption of Bitcoin in Holland lay ahead, or that it would be a good thing, then it has not done so. In fact, that would be an entirely different article that would have to include more factual and historical analysis than this article even bats an eye at.
Today there are far more people who would be very interested in risking investing in Bitcoin and accepting Bitcoin for their service, than there are people who have heard of it. Every attack on any Bitcoin business brings in more people and their capital from around the world than the wealth it destroys. If Netherlands one day starts hurting Bitcoin business on big scale, it will create a resonance that will increase Bitcoin awareness and utility 10x the same year.
Also, the first country that will allow Bitcoin flourish will attract such an enormous amount of capital, it will make news everywhere and it won't be that easy to shut down business anymore.
Honest, non-rhetorical question: How? (In the sense of both the goals of the regulation and the means of enforcement.)
See my answer below in sibling comment thread.
I'm still wondering how any government would plan to "regulate" it. In the same way a lot of contractors want to pay by cash so they can go under the table on their annual income for tax purposes, if you don't publish a link between your bitcoin address and yourself then it would be impossible for a government to oversee your bitcoin activity until you somehow tied a transaction back to your real identity.
The world black market is estimated to be 2 trillion dollars (http://en.wikipedia.org/wiki/Black_market). It will only be bigger, but governments will still be able to tax land, real estate and big companies.
However, without inflation, QE and ad-hoc confiscations, no government will be able to have "budget deficit". That is, no government would be able to "borrow" money from nothing to build stuff for "free" for their electorate.
Since no politician will be able to do "free" stuff without raising taxes, no one would elect any government at all. This all brutal nonsense will simply fall out.