Bitcoin Is Officially a Commodity 59
Taco Cowboy writes: According to the Commodity Futures Trading Commission (CFTC), Bitcoin and other all virtual currencies have been officially categorized as commodities, just like crude oil or wheat. The CFTC on Thursday announced it had filed and settled charges against a Bitcoin exchange for facilitating the trading of option contracts on its platform.
By this action, the CFTC asserts its authority to provide oversight of the trading of cryptocurrency futures and options, which will now be subject to the agency's regulations. In the event of wrongdoing, such as futures manipulation, the CFTC will be able to bring charges against bad actors. If a company wants to operate a trading platform for Bitcoin derivatives or futures, it will need to register as a swap execution facility or designated contract market, just like the CME Group. And Coinflip—the target of the CFTC action—is hardly the only company that provides a platform to trade Bitcoin derivatives or futures In other Bitcoin news, reader McGruber notes that the CFO of BitPay, a Bitcoin payment service, was successfully phished, costing the company $1.8 million worth of Bitcoins. The company is attempting to recover the money from its insurer.
By this action, the CFTC asserts its authority to provide oversight of the trading of cryptocurrency futures and options, which will now be subject to the agency's regulations. In the event of wrongdoing, such as futures manipulation, the CFTC will be able to bring charges against bad actors. If a company wants to operate a trading platform for Bitcoin derivatives or futures, it will need to register as a swap execution facility or designated contract market, just like the CME Group. And Coinflip—the target of the CFTC action—is hardly the only company that provides a platform to trade Bitcoin derivatives or futures In other Bitcoin news, reader McGruber notes that the CFO of BitPay, a Bitcoin payment service, was successfully phished, costing the company $1.8 million worth of Bitcoins. The company is attempting to recover the money from its insurer.
The CFTC is United States only (Score:3)
Technically, this means BTC futures can only be manipulated with CFTC permission.
Not that they would ever allow such a thing.
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you can trade in crops that will never be planted
No, that's not how it works. Every futures contract must be delivered (a small percentage are delivered by buying the commodity on the market the day the contract matures, mostly due to crop failure, but still: somebody planted and grew the crop that was delivered). The contracts are mostly written by farmers, and mostly expire in the hands of food manufacturers. They may pass through the hands of 1000 speculators in the meantime, but the contract always represents real product that must be delivered.
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Laugh and cry "tinfoil!", but I'm actually curious: would there be a way to backdoor/engineer a means to actually restrict/kill BTC by this route, or at least (eventually) corral it under official governmental control?
It appears that the CFTC has just declared a monopoly-by-fiat over trading a certain aspect of BTC (futures in this case). I don't think there's a route to do something nasty from here, but still, there's that nagging feeling...
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Given that bitcoin has no obvious intrinsic value
What's the intrinsic value of a global transaction network that cannot be censored?
Or in other word, Bitcoin lacks intrinsic value in the same way as the Internet does.
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would there be a way to backdoor/engineer a means to actually restrict/kill BTC by this route, or at least (eventually) corral it under official governmental control?
The CFTC probably won't be able to restrict BTC mining or usage anymore than they can keep you from drilling for oil in your backyard or using oil to run the generator in your fallout shelter (although other parts of the government would probably have issue with you drilling for oil in your backyard or digging a fall-out shelter).
However, if you were wanting to buy or sell a delivery contract for BTC you will be potentially mining (or buying from someone else for delivery if it's cheaper) in the future, the
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It appears that the CFTC has just declared a monopoly-by-fiat over trading a certain aspect of BTC (futures in this case). I don't think there's a route to do something nasty from here, but still, there's that nagging feeling...
This limits the nasty. Goldman Sachs can destroy any unregulated market for profit, and quickly. This helps prevent that.
The biggest single cause for the 2008 financial crisis was GS doing exactly that to unregulated mortgage-backed securities. The CBT went to the SEC to ask that mortgage-backed securities be traded just like other securities (financials are a bit different from commodities, most of the same market rules apply, but different regulators), but the SEC rebuffed them. But then, most senior
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Oh, I should add that indirectly, there is one very nasty side-effect here: taxes. The worst outcome for BTC tax-wise is to be treated as a commodity, as commodities have higher tax rates for small investors, compared to other capital gains. This isn't an IRS ruling, but the IRS already seemed to be leaning this way.
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They can claim all the authority they want. The source code is open. They can also claim authority to regulate the process of calculus too. They can pay rewards to snitches who turn in people doing unreported calculus, and some people will probably get caught.
The US government does have a great deal of control over the US dollar. So they might be able to regulate the trading of US dollars with bitcoin, but this will be as limited as the government's ability to prevent other illegal things with US curren
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What makes you think anybody's trying to regulate Bitcoin? There are laws here on transactions with US dollars, and now there's laws applying to trading certain contracts about Bitcoin. There's similar contracts about lots of things, and the government doesn't regulate them.
What this means is that the government is taking Bitcoin seriously as something of potential value.
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What makes you think anybody's trying to regulate Bitcoin?
What makes you think that I think anybody is trying to regulate bitcoin?
If you had read the post I was responding to, you'd see that that person was specifically asking if it would be possible for the government to do this.
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You should launch your own, I bet no one else has done that yet.
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The funny part is where they think they are in control.
It's all fun and games until someone brings a gun to the party.
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I tend to not think of Bitcoin as currency. A commodity fits rather well but isn't quite perfect.
I view it as a medium for the transfer of value. That gives it some value since it is competing with costly and complex alternatives such as credit card processors.
Everything else that people do with it can be seen as being derived from that. Speculation and trading are natural consequences of anything that people ascribe value to.
When used as an individual not wanting to engage in futures or investment, but onl
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A blockchain cannot function without verification ("mining"). There needs to be incentives for "mining" to occur. Those tokens of incentives don't need to be called "coins" - but they must have some sort of value.
Thus, for any blockchain to be successful it needs to have have "coins".
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... and you're unable to secure that blockchain without mining. Without it it's just another, regular, database.
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There's no added security in that scenario compared to a regular database. That is, they must contractually agree not to try to outmine (thus risk a rogue bank doing double spends) each other. From that follows they cannot be sure that an external actor won't outmine them unless they keep the blockchain secret. From that follows ...
https://www.myblockchain.xyz/ [myblockchain.xyz]
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A blockchain (seriously now) is a distributed database. It allows multiple parties to "own" and validate the data. There is a value to this beyond bitcoin and other cryptocurrencies.
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If multiple parties distribute the block-chain, how do you protect it from validation unless mining is an arms race? ... and the incentive for an arms race will be a token of value. It doesn't need to be named a "coin", but will in effect be one.
(PoS etc are nice theories but we're back to the equivalent of a regular database in effect)
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It's definitively not a commodity, that simply describes a market where the product is generic like say coal but it's still being sold from producers to consumers. It's a pseudo-currency, but more like a collector's item like (expired) stamps than a bottle of whiskey. You're not really sure why they're valuable in the first place since they don't have any inherent value, but as long as there's collectors who want them they can be bought and sold as a substitute for money. The more interesting part is that t
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with officials receiving MILLIONS in compensation for looking the other way during their time in office.
For example, if the state's Attorney General or Governor has a close relationship with someone accused of wrongdoing. [wikipedia.org]
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True, but bitcoin doesn't have shareholders. There are also no big profits or lucrative post-government job offers to bribe regulators.
When it comes to the federal government, "selective enforcement" is the name of the game. If you're a government employee, banker, big corporation or just plain wealthy and you pay your protection money, the laws and regs don't apply to you. Bitcoin users and exchange operators don't fit that criteria, so there's nothing to prevent Big Brother from cracking down on them a
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New categorization (Score:2)
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The impotent rage of true believers. The fantasy that a basement full of graphics cards will grant you wealth, power, prestige, and women.
Wwwwait.... there's gonna be women down here? Mama's not gonna approve of that... no, Mama's not gonna approve of that at all.
what the hell?! (Score:2)
If there's one thing I learned from the job I just quit, if the president/CEO is an nontechnical moron with a low intelligence level who can't make proper decisions or perceive threats correctly, you should leave immediately. Ready for the scary part? Amazon and Newegg use bitpay to power their bitcoin payment backend.
LOL (Score:1)