"reports that they are used to buy illegal drugs anonymously."<p>holy crap I can do the same thing with dollar bills! Shut down the monetary system also..
This headline seems a bit hyperbolic; the article does not actually substantiate the part about Schumer going after Bitcoin. It does reiterate the news about Schumer wanting Silk Road shut down; that was reported yesterday on HN. But there's nothing new here that says that Senators are going after Bitcoin, specifically, except for the headline.
There's always been an untraceable currency sold and traded globally. Gold. You can't trace it back to the origin, as long as it's been melted down.<p>The only thing is, you can't easily transport it. And lets be honest, how many people are willing to accept gold?<p>This is scary stuff for governments all over the world, not because you can buy drugs or use the currency for illicit reasons, it's because -- taxes and bypassing traditional financial institutions. (Just think paypal)<p>If you can move money around the world securely and anonymously, you can hide your money from the tax man. At least in theory...
If DEA confiscates proceeds of a crime and it's all Bitcoins. Will they cash them and give further validity to the Bitcoins or is it effectively sent to /dev/null indirectly increasing the value and indirect lesson in drug economics?<p>Interesting dilemma for them.
The market doesn't seem to be worried<p><a href="http://bitcoincharts.com/charts/mtgoxUSD#rg10zvztgSzm1g10zm2g25" rel="nofollow">http://bitcoincharts.com/charts/mtgoxUSD#rg10zvztgSzm1g10zm2...</a>
Shutting down Bitcoin because of illegal drug trade is like banning cryptography because of terrorism: It is not solving the problem and it is not a valid reason for stopping innovation.
In case anyone's interested, this is the Bitcoin "drugs" site in question, "Silk Road." <a href="http://gawker.com/5805928/the-underground-website-where-you-can-buy-any-drug-imaginable" rel="nofollow">http://gawker.com/5805928/the-underground-website-where-you-...</a>
The federal government raided the "Liberty Dollar" factory, which isn't even an actual currency (just a collector's item). Why are they being so cautious with something that's actually supposed to replace the dollar?
Isn't the time and effort of the government better spent in legalizing the drug trade and earning revenue in the form of taxes rather than trying to fight a war that is obviously unwinnable?
To paraphrase the Beastie Boys[1], "You gotta fight / for your right / to barrrTER!"<p>[1] <a href="http://www.youtube.com/watch?v=eBShN8qT4lk" rel="nofollow">http://www.youtube.com/watch?v=eBShN8qT4lk</a>