[FellowTraveler]

> once it is perceived as more than just a nuisance by some major government it will be shut down in a heartbeat

Actually, the unique feature that makes Bitcoin special is specifically its censorship-resistance. That's why people value it -- because it cannot be shut down.

[learc83]

It can be pretty effectively shut down by devaluing it to the point of uselessness.

Governments could make it illegal to conduct trade using bit coins, and they could make it very difficult to convert by going after people doing the conversion. I think that would pretty effectively tank the value.

They could also buy or confiscate a large percentage of all existing bitcoin pretty easily, and then use that to manipulate the market.

[orblivion]

If it becomes enough of a hassle it probably could be shut down. It would have to cost the government so much that it's worth the political hit to them to alter the Internet. So, best that it remain not too high a nuisance for now.

[elif]

It is resistant to confiscation, but the IRS can still make you a fugitive in most of the developed world.

[stale2002]

Not if they don't know that you own an account.

[zaphar]

If you buy a bitcoin without using cash or cash out your bitcoin then they can trace your bitcoin wallet to you. It's not really anonymous unless you keep all the transactions inside of bitcoin and never leave it. Which isn't really at all practical right now and has a high likelihood of not being practical in the near to medium term either.

[ubernostrum]

The IRS got Switzerland to open up previously-confidential banking records.

You think they're not going to find a way to identify Bitcoin users? "It's on the internet, that makes it untraceable" is magical thinking that does not survive contact with sufficiently dedicated real-world agencies.

[stale2002]

The IRS got people to give up the identities of other people.

With bitcoin, if you take the right precautions, it is impossible for anyone to know which account is yours.

It is a TECHNICAL solution. It doesn't matter how many people the IRS threaten.

Can the US government tell everyone in the world to think of a random number, then these citizens don't tell anybody what number they chose, and then can the government arrest everyone who chooses the number 10? No, it cannot do this.

And if it can't do that, then it can't arrest all the bitcoin owners.

[ubernostrum]

OK. So buy something with Bitcoin without:

* Ever appearing at a retail establishment with security cameras

* Ever scheduling a product for delivery to any address, period

* Ever scheduling a service to be provided at any location, period

* Ever communicating with the other party via any means whatsoever, including placing an order online, not even via Tor behind seven proxies

And tell me how it goes. Because all of those things above are vectors for identifying you that big random numbers won't solve.

[catuscoti]

Ultimately, all of this assumes that the IRS are willing to prove that they will risk their lives and die for what they believe in. They will not, because they expect the police force to do that, who in turn will not, because they expect the army to do that. And that is how it all went wrong so often in the past.

[dragonwriter]

The thing is, unless you use bitcoin to buy goods similarly obscured digital goods (essentially things that exist themselves only as records on a blockhain), the other side of the transaction is traceable.