Bitcoin vs. The State - The Libertarian IntroductionSubmitted by sonofLibBerte on Mon, 04/01/2013 - 15:01
As Bitcoin smashes through the $100 barrier, more and more people ...and bankster-owned governments... are taking notice. Here's a fine distillation that can answer some critical questions: http://cur.lv/k9cp
An excerpt from the above link>>>
Bitcoin vs. The State
Now we get to the more fun part, which is especially relevant to any libertarian discussion of Bitcoin. This is the manner by which Bitcoin supersedes government control. "Okay," people say, "so Bitcoin is new and the government doesn't regulate it yet, but they will!" Unfortunately for the government, they cannot. No person nor group of people can defy the laws of mathematics upon which Bitcoin is built.
But first, let's look at the ways the government could interfere with the Bitcoin system.
Private websites on a hosted server can be taken down by the government. We saw this in amazing clarity recently when MegaUpload was taken down by the US government, even before any trial or finding of criminal activity had been accomplished. It should be assumed that the government can take down any site it wishes, with or without the legal cover of legislation like SOPA and PIPA (which merely give legal blessing to powers already assumed and demonstrated). So this means that any website that dealt in Bitcoins could be removed and shut down. The exchanges would be the first target.
Yet, even here the government runs into trouble, because websites can be mirrored, copied, and hidden very easily. Taking down Bitcoin websites would be like cutting the heads of a Hydra - for each successful severance, publicity and the profit motive would compel more sites to spring up (case in point: how many file sharing sites exist, other than MegaUpload?).
In fact, certain sites have proven impossible for the government to take down altogether. Take the example of The Silk Road, which is a brazen website selling illicit drugs. US Senator Chuck Schumer expressed angst in this regard, though he's pitifully impotent to remove the site because it exists on what's known as the "dark web," on servers hidden via cryptography. If the above-ground Bitcoin websites are shut down, the below-ground sites will flourish. And every time a high profile site is taken down, Bitcoin would get free publicity around the world.
So taking down websites is an inadequate strategy if the government wishes to impede Bitcoin. What else could they do?
Within one country, at least, a government could prohibit individuals and businesses from openly accepting Bitcoins (and if this happened in the US, it'd be the ultimate sign that the Supreme Court had fully abandoned its proper responsibilities). Suppose the US Government did ban the acceptance of Bitcoin: it would mean Bitcoin could only be accepted in secret. This would harm the economy significantly, but wouldn't come close to stopping Bitcoin (and indeed, unless every government did this, Bitcoins could be openly accepted in other countries leading to capital flight which would pressure governments not to outlaw it in the first place).
But what about the more obvious attack method - can't the government just "shut down" Bitcoin transfers? Amazingly, no. Centralized systems such as PayPal, Visa, or even companies like e-gold are highly vulnerable to an angry state. The thugs must merely break down the door, confiscate the servers, and throw the owners in jail. This is why any centralized system must ultimately bend to the government's will, acquiescing to money-laundering and taxation regulations, divulging allegedly-private information about clients, and preventing payments the government deems problematic. If they don't, they're shut down.
Bitcoin is not vulnerable to this risk, because there is no central point of failure. There is no Bitcoin office. There are no central Bitcoin servers. There is no president nor employees of Bitcoin. Bitcoin has no home country, it is licensed nowhere. It is a distributed network, a protocol, that can operate as long as the internet exists (and, in fact, even without the internet per se). Transactions occur peer-to-peer, meaning no governing body approves them. Accounts cannot be frozen, because nobody has the freeze button.
Bitcoin cannot be turned off - it is like a benevolent virus which, so long as a few hosts survive somewhere in the world, can perpetuate itself and regrow at the speed of information.