That countries should not seek to regulate digital currencies like the Bitcoin
Debate Rounds (3)
First of all, why is it unjust? We think buying and keeping bitcoins are just like buying and keeping jewelries, properties that are valuable and that can be traded. We should be entitled to possess bitcoins and freely trade with others who"s willing to exchange things with it. Unless government may somehow also regulate properties of small sizes that are monetarily valuable, we don"t see why it is justified to regulate bitcoins.
Transaction of bitcoins over internet is also similar to people physically exchanging stuff of similar values. We don"t see how government is justified to regulate personally exchanging a ring with a necklace of similar worth, and we don"t see it here as well.
Now government may conveniently try to speak of the potential of bitcoins in fostering illegal activities as a reason to justify regulations. We still don"t see why is it just since firstly, even US government admitted to public that there"s no evidence of widespread use of it for illegal ends. Secondly, if majority of transactions conducted using bitcoins are of lawful purposes, we don"t see how simply more risk justifies regulations of entire system. In its nature, bitcoin is just like money, a tool that is neutral in itself. When people uses it for illegal means, you should condemn these people, not the system.
In addition, the reason why virtual currencies like bitcoins appears, is because many people aren"t satisfied with current financial system. When government fails to address problems susceptible in centralized currencies, like proneness to wild inflations, or corruption due to financial institutions, we think failure of government does not justify its intervention to stop a potentially promising alternative from blossoming.
Therefore, regulating bitcoins is fundamentally an unjust act to begin with. As government, we should simply inform market of risks associating with bitcoins, and allow them to make informed choices on themselves.
Secondly, let us talk about why even if we try to regulate, it won"t be effective and may bring more harms.
Virtual currencies like bitcoin, are decentralized currency specifically designed to avoid regulation of government. Bitcoins, for example, can be placed on any compatible electronic devices, and it may be very difficult to track details of transaction over huge internet sphere. And as everyone knows, internet is far from a place that can be easily regulated. This means it"s very hard to keep it under proper control, and it"s likely any regulation will be very expensive. Not worth it.
Moreover, due to its decentralized characteristic, this means bitcoin businesses may operate at anywhere on the planet as long as there"s internet access. If for example, US government regulates bitcoins, then businesses can simply move to other places of world where there"s lesser restrictions, especially into more dodgy countries. Individuals may perhaps easily circumvent monitoring by using VPN or other technologies, and transactions may still occur regardless. Therefore even if regulations are in place, it won"t likely to be effective.
Because of it, we don"t see how criminals who already use bitcoins for illegal purposes will be much deterred, if at all. Even if such regulations work, which is highly unlikely, as long as criminals are still alive and evil, we believe they can still find alternatives to carry out illegal transactions. Also, we think there"s costs associated.
1.As mentioned, it"ll likely be very expensive to maintain the regulatory system that"s likely to be ineffective. Does it really worth so? We don"t think so.
2.Drives innovation of such financial means away from countries that regulates it, and which means benefiting other countries that are free about it. This is because the main reason why people uses bitcoins is due to its freedom from regulations and control from banks and governments, as well as privacy concerns. Once you regulate it, less people uses it within your country. We don"t think that"s particularly an interest of a state.
Thirdly, now let"s talk about why bitcoins are so beneficial and necessary for staying
1.Bitcoin can be an effective means for people to increase their wealth, just like stock market. We think it"s beneficial if part of a country"s people can increase their purchasing power in local economy through means of bitcoins. At the end of day, most of them are likely to consume it in local economy. Moreover, when people see bitcoins as a better way to trade, it"s likely that they"ll engage in trading more, which we believe it may boost profits to some extent.
2.Due to its attractiveness as an alternative currency, when more and more people opts in to it, we can see banks becoming more motivated to provide services and financial system of better quality. Bankers" capacity to prioritize their own financial interests are reduced, when banks are no longer monopolizing people"s way of transacting money. Therefore, we believe through competition, traditional financial sector may become better. Additionally, in SQ corruption can be a problem in some countries" financial industries. Appearance of bitcoins may help changing the situation when corrupted banks are forced to change.
Lastly, let"s address one further concern about Bitcoin - Whether leaving it unregulated would devastate national currency. The supposed logic goes like this: when more and more people opt in bitcoins, values of national currency might deflate massively. This is not so true. We think it is based on a shaky premise that leaving unregulated will lead to everyone suddenly opting in bitcoin system. We disagree. We think even though there"s a growing trend for use of bitcoin, we don"t see how its current volatility and concerns with security may incentivize everyone to use it. We think for some time until future, only a minority of people may use bitcoin as primary way of transactions. More people are likely to see it as investments. For companies, it"s way to increase profit margin.
To conclude, full implications of digital currencies are still not so clear in reality. On one hand, there"s much potential benefits of an unregulated digital currency. On another hand, feasibility and effectiveness of regulations is strongly worthy to be doubted, while more harms may easily appear with it. Furthermore, it isn"t principally just for government to regulate it. We propose.
Your second point mainly focuses on the fact that the government can't do anything about the way that the criminals trade. This is false, given that by regulating the trade of Bitcoins, you can also catch a few criminals in the act, and prosecute them, thus, decreasing the overall amount of criminals. (This still holds true, even if we only catch X number of criminals. Also, I highly doubt that governments will reveal the fact that they are monitoring digital currencies, allowing them to spot even more illegal activities.)
Finally in response to your third point
1. If the government decide to regulate Bitcoins or any other type of similar currency, it will be most likely covert, so therefore it will not effect the amount of people that decide to join.
2. The government does not need to kill Bitcoins. "Regulating" could simply mean monitoring the system for any illegal trade. Unless, of course, you are saying that illegal trade is good for our economy.
Now on to my points:
1. Not regulating the currency encourages criminal activity.
2. People with knowledge can take advantage of these systems in potentially harmful ways.
Of course, even if it can be seen as currency, Opp still needs to provide much more than simply "Oh, it"s currency, so it"s just". It is just to regulate US dollar, because it"s issued by US government. It"s not just to regulate bitcoins, because it"s not issued by it. It"s entirely built on a decentralized peer-to-peer basis.
Then you"ve conceded that bitcoin trading is almost untraceable now. Exactly. This leads back to my point of how unfeasible and costly it"ll be in seeking to regulate it. Does it worth all the tax payer"s money (which could"ve be spend in welfare and boosting economy) and the hassles?
Moreover, referring to a point made by Kaneo in the comments. "How would they regulate? Only way is to claim ownership over your data on your computer and tell you what you can and cannot access online." So, is this justified?
Then you attacked my second point, mentioning government can catch a FEW criminals. Okay, but why is catching a FEW criminals worth the expensive and potentially privacy-invading regulations? And also loss of a host of benefits for leaving it unregulated, mentioned in second part of my first speech?
You"ve also doubted that "governments will reveal the fact that they are monitoring digital currencies" Now this sounds like spying, rather than regulating. Regulation is more about passing laws in parliament to regulate it and taxing it, yeah?
It seems I"ve just spoiled another big reason why government wants to regulate it, because of taxes. But as I"ve already mentioned in my first speech, the reason why more and more people are opting into systems like bitcoins, is because it"s highly different from a centralized currency, which involves taxation and regulations. If you put taxes and regulations on it, usage of it will inevitably decline, and whatever the amount of tax income expecting from govt. is likely to be diminished. Moreover, why is it even just to tax in first place? Of course, this is well said on assumption that regulations will be effective.
Next, you"ve mentioned "It"ll most likely be covert". Not true, I"ve already dealt with. And you may need to at least show how it"s likely to be done "covertly", why it is well within a reasonable financial capacity to do so. Bitcoin transactions uses "military-grade" cryptography, so "nobody should be able to charge you money or make a payment without your permission". 
I did not say "illegal trade is good for our economy." But I was saying "since even US government admitted to public that there"s no evidence of widespread use of it for illegal ends.", we should not regulate it for this single benefit of catching a few criminals, while losing an overwhelming host of benefits, as mentioned in my first speech.
Now, rebuttals to your under-substantiated points.
1."Not regulating the currency encourages criminal activity." <- First you may need to show how this regulation may take place and actually work, and why is it within reasonable capacity. Secondly, when even US govt. admits there"s no widespread use of it for criminal activity, what makes you think criminal activity is a significant problem to be tackled? Thirdly, as mentioned in first speech, as long as these criminals are alive and evil, they can still carry out their crimes in some way.
2."People with knowledge can take advantage of these systems in potentially harmful ways." <- Quite a similar point as your previous one. Firstly, US govt. don"t think it"s quite true, at least for now. Secondly, I"ve already answered it in my first speech, explaining how such a small risk does not justify loss of massive potential economic and political benefits that brings with it.
Apparently there"s still many points unengaged yet in my first speech. So, please refer back for more positive material supporting this resolution. Esp. the second half. : )
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