Not everyone agrees with the moronic march toward regulation. For example, consider Michael Jackson of Skype. As the former chief operating officer, he presumably has some sense of what they were doing as they began their product launch. And as a venture capital investor at Mangrove Capital he clearly has a sense of what money is and what it does.
At Coindesk, he writes, in part, "We, the bitcoin community, need to make these arguments better. The default position of the products and services derived from bitcoin must be that they are not to be regulated. They need not be, and the existing rules need not apply. They may apply in intent, but often the wording is poor, unsuitable and can be argued to be irrelevant.
"To put it bluntly - every bitcoin actor should be reading the law very carefully and finding the loopholes. You should all invest a great deal of time in this - it is hugely important. For example, are you really moving 'currency' or are you simply exchanging some sort of token?"
You can read the rest of the essay here: http://www.coindesk.com/bitcoin-regulation-lessons-early-days-skype/
Now, I certainly don't qualify as a fan of Skype. Proprietary encryption isn't sensible. You aren't protected by proprietary encryption. For all any of us know, every Skype conversation ever made has been recorded and submitted to half a dozen (or more) government agencies. Open source crypto, and open source software, are vitally important.
If you want to have your privacy, you have to look at the source code, or at least rely upon persons who have looked at published source code.
Closed source, proprietary operating systems (such as Windoze and Mac OS) and closed source, proprietary software, can, and probably do, things you don't know, wouldn't like, and can't stop. Open source operating systems and software do things that you can know about. You can either learn to read the code, or hire
people who can. And you don't actually need to do either of those things, since the open source community constantly publishes info about open source operating systems and software. It is very hard for an open source programme to do anything without you being able to learn about it, because so many people look very closely at all open source stuff.
The lesson Jackson is attempting to impart, however, remains valid. He wrote, "We could have decided to apply for telecoms licences all around the world and customize the product to both match and support the vagaries of different rules and directives. It would have been the logical thing to do and it is similar to the route many bitcoin actors are taking today. However, if Skype had done so, it would have been the worst strategic mistake it ever made."
Based on the various comments I've seen from members of congress, it seems clear that what is going to be done to bitcoin in the name of regulatory compliance is extremely undesirable. Or, to again quote Jackson, "Had we tried to establish Skype as a telco, rules and perversity would have appeared, driven by a dangerous combination of lack of knowledge, good intentions and political pressure."
People in the government don't know anything, and rarely care about anything but their own power, salary, and pension. They will see bitcoin as a threat to those things, and act accordingly.
Consider another industry that has seen endless, meaningless, and tedious delays. Space tourism. Back in 2004, after winning the X Prize, Richard Branson declared his intention of flying tourists by 2007. Every year since 2007 there have been plenty of reasons for the date to be further in the future. It is now 2014. Even if Virgin Galactic were to start flying tourists tomorrow, the delays have been costly.
The people in the bitcoin industry who want to pretend that they are going to comply with regulations are fools. They are asking to have the entire industry destroyed. They want to have a government regulator examining every link on the blockchain. Perhaps the regulators would be satisfied if everyone who ever makes a bitcoin spend had to pee in a cup and wait for a drug lab to analyse the contents. But the whole point of making economic privacy available to the public would be lost.
I strongly suspect that the reality is different. The people who are clamouring loudest for regulation expect to be able to buy their way into the small cartel of companies that are going to get favoured treatment from regulators. The rest of us are going to have to look forward to being screwed.
The automobile industry is heavily regulated. There are only three giant car companies in the USA, plus Tesla. Now, every single stock car racing enthusiast in the country, and there are millions to tens of millions of those, knows how to make a car run. Thousands of them know how to make cars run better. There ought to be dozens of car companies, but there are not. The regulators in Washington, DC, make sure of it.
That system won't last forever. Open source has been applies to hardware, too, for more than a decade.
The system of burdensome regulation that benefits a few in industry and many in government is broken. It is psychotic in its implementation. It has utterly failed to prevent the financial meltdown, the Madoff scam, or any other major calamity going back to the Great Depression of the 1930s. No one in government cares one whit about cartels operating in restraint of trade. So big businesses acquire big businesses, consumers are increasingly screwed, and the only people doing anything about it are developing work-arounds without considering which regulations they are violating.
You don't have to like it. I don't like the regulatory environment, and I don't pretend that I can do anything about it. You also don't have to operate your business in the United States and be subject to USA regulations. And neither do I.