[cookiecaper]

I don't see much point in this kind of rationalization. We know that it's probably not technically illegal to run the bitcoin network. I'm sure they'll find some way to postulate that btc as a currency is technically illegal, but even if they didn't, you have to know that everything that is big in government and the power scene right now is going to collude to take btc out of the picture as far as possible. They are going to marginalize and destroy it as much as they can.

The government hates it because it's difficult to track the money; they'll claim it's used for terrorism, money laundering, and other forms of illegal funding, and as you know, once such a claim is solidified in the public psyche it doesn't really matter what statute the actual legal charge is based on. They'll also hate it because it makes taxation much more difficult. You may argue that cash does the same, but cash still originates and terminates in the government's officially sponsored banking system and it bears official government markings that are used to track its movement. Cash has also been (intentionally) corralled into disuse by the major financial players (governments, banks, huge businesses).

The banks will hate it because it cuts them out of their usual money-shifting shenanigans, which are both obscenely profitable and generally amoral, if not in principle, then in practice due to gouging and misrepresentation.

Bitcoin allows easy and practically free e-commerce. Bitcoin allows for extremely innovative new banking interfaces and practices. Bitcoin is at least practically if not technically unbound by the onerous regulations and rules that bankers have installed for themselves to help control which people are allowed to play with them. Banks aren't going to like that kind of competition at all.

Bitcoin is in for it as soon as any kind of normal usage begins to occur. It is silly to pretend otherwise. I have extremely high doubts that btc will be allowed to stand; the only way I can see that happening is intervention from US intelligence services, requesting that btc be allowed to continue to operate without molestation because of that agency's specific plans for the platform.

[weavejester]

I don't subscribe to the theory that the US government is a nigh-omnipotent entity that always gets its way. There are plenty of things the US government doesn't like that it has to live with, such as strong cryptography, pornography and P2P networks.

I also really dislike the fatalistic attitude that those in power will always get their way, and that we should never try to change the status quo because we will always fail.

[cookiecaper]

I don't think that the government gets whatever it wants and I don't think the people will always fail against the powers that be. However, I don't think there would be enough interest in bitcoin to make it outlast the interest the government would have in killing. The government and banks really hate this kind of stuff, it's not just a passing "that'd be nice to get rid of" thing.

[weavejester]

Perhaps, but that doesn't mean that we shouldn't try. I'm also unsure how much of an interest the government has in killing it.

Bitcoins are not inherently anonymous, and in some ways it makes things easier for law enforcement, because all transactions are public and accessible without the need for a warrant. The hard part would be matching a Bitcoin address to an individual or organization, but maintaining anonymity against a determined investigator is hard, and requires a high degree of technical expertise to pull off. I don't think Bitcoins actually make things any harder to find criminals.