Congress Attempting to Crush Bitcoin

You have to give Congress credit, it has remained consistent at trying to prevent any notable societal advancements. Now that Bitcoin is becoming kind of a big thing Congress has decided it’s time to being the process of putting its boot on Bitcoin’s neck:

Bitcoin, the once-obscure virtual currency, is getting attention from the most mainstream of all institutions: Congress. The chairman of the Senate Committee on Homeland Security, Thomas Carper (D-Del.) and his Republican counterpart Tom Coburn (R-Okla.) have announced plans to begin probing the virtual currency and the regulatory regime that governs it.

The new inquiry was announced in a Monday letter to Homeland Security Secretary Janet Napolitano. “Virtual currencies appear to be an important emerging area,” the senators wrote, arguing that the subject “demands a holistic and whole-government approach to understand and provide a sensible regulatory framework.” Similar letters were also sent to the Department of Justice, the Federal Reserve, Department of Treasury, the Securities and Exchanges Commission, the Office of Management and Budget, and the Commodities Futures Trading Commission.

“A holistic and whole-government approach” has to be one of the most meaningless statements ever made in the history of mankind. But I digress. Congress is attempting to do the only thing it knows how to do with a new technology, regulate it. Historically its ability to regulate has stemmed from its ability to identify individuals in charge of developing, maintaining, or administering new technologies and coercing them into submission. Bitcoin, being a completely decentralized network, has no such person. In fact the person credited with creating Bitcoin, Satoshi Nakamoto, is a pseudonym used by the developer(s).

I predict that Congress will implement numerous laws and regulations in an attempt to curtail Bitcoin’s expansion but those attempts at imposing order will accomplish nothing. Decentralized systems have traditionally been impossible for centralized forces to defeat. While Congress may pass laws making it illegal to use Bitcoin those laws will remain impotent because Bitcoin can be used in a mostly anonymous manner. In the end, Congress will find itself unable to deal with Bitcoin just as it has found itself unable to deal with any determined decentralized force.