“People own their own bodies, and have the absolute right to put anything they want into it ... People like the FBI, and DEA agents who want to lock people in cages for buying, selling, or using drugs are the ones committing evil, and they need to stop. I look forward to the day when they see the error of their ways, and stop committing evil acts in the name of ‘law enforcement’.” Roger Ver, Venture Capitalist
My last post highlighted the misgivings of regulation and why there is no need for such a policy. 2013 will be known as the year that Bitcoin appeared on many regulators radar and 2014 will be the year that they intensify their focus on the new technology. Regulation, as I stated, stomps on innovation, it impedes the wealth producers. One such example was a young startup known as Blockchain.info. I covered it back in 2012 which was created by an Individual called Ben Reeves. Ben was a 20 something Software Developer who had only recently graduated from the same University I went to, Newcastle. Since that posting Ben has been ousted from his creation that he spent day and night developing. Not from competition or from incompetence; in fact his service was increasing in popularity all the time. He was ousted by the wealth destroyers.
One thing that cannot be emphasized strongly enough is how absolutely amazing Ben is. He created the entire website by himself, the iPhone app by himself, the Android app by himself, and up until nine months ago he was also running a service that allowed people to buy bitcoins through wire transfers and cash deposits in the Eurozone.He was handling all of that, including customer support, by himself. But then, the powers that be in the banking system shut down his personal bank account, his business bank account and his brother’s personal bank account without warning. While he’s an amazing developer, he didn’t want to have to deal with banks and lawyers and regulators. That’s when I got more actively involved.
Roger Ver, Angel Investor in BlockChain
What did Ben do? He created a service that anyone was free to use under their own free will, for free. I used it and still use the service and think it is excellent. He was shaken down because the established order saw this as a direct threat. Remember the big guys are always trying to shut down the little guys. We may live in the West but don't be mistaken that we are absolutely free from acts of tyranny. Closing down bank accounts was an act of aggression with no regards to personal freedom. If a Communist Government had shut down an entrepreneurs bank account for starting a convenience store many in the West would regard this as tyranny. It is no different. Ben has since given the service over to avoid these acts of harassment.
Then we have another recent example, BitInstants CEO Charlie Shrem has been under house arrest and was arrested at JFK Airport on charges of assisting in money laundering. Of course Charlie just ran his service in order for customers to transfer value as they wished. Its like a commercial bank being sued for assisting with money laundering because they unwittingly allowed a criminal to deposit cash under a relatives name to name many permutations. Charlie Shrem has been targeted so the regulators can make an example of him. Its to scare future entrepreneurs from even thinking about starting up a business related to Bitcoin. They don't want the status quo to be disrupted.
These are real life examples of the wealth creators and risk takers being subject to unjust attacks by the state. Recent news has been full of Bitcoin headlines after Mt Gox, a Bitcoin exchanged, collapsed. A lot of people have lost a lot of money. There is no doubt that this will be painful for the individuals involved and my sympathies are with them. However this is how free markets are supposed to work. Bad businesses fail giving resources to the people who prove themselves competent. This is why markets and capitalism always reign supreme to wealth creation over Central Dictation. The Financial Industry we have now has the "Too big to Fail" mantra where the incompetent can succeed just as well as the competent, creating a stagnant industry.
Mt Gox isn't the first nor will it be the last to fail and take peoples money. More exchanges and Bitcoin related businesses will follow a similar fate. This will not weaken Bitcoin. In fact it will strengthen the platform. More innovations regarding personal security will happen from these failures making the services that use the protocol more robust. Bitcoin, the platform and protocol, is still sound. What it doesn't need is regulation. Regulation is for old finance which is a complete mess.
I will repeat what I said in my previous posts. No one is forced to take part in Bitcoin; it is voluntary. We all know the risks. These are the risks with building the future financial platform. We have to build the ecosystem and that takes time. Until then, there will be wild swings in price; businesses will fall; scams will come and go.
Erik Voorhees, a Bitcoin entrepreneur, lost over 500 BTC through Mt Gox so if anyone is bitter then Erik more than qualifies. However I think he sums up what needs to be done and its not regulation. Spoken like a true entrepreneur; upbeat in the face of despair; always positive on tomorrows challenges.
And finally, the lesson is not that we ought to seek out "regulation" to save us from the evils and incompetence of man. For the regulators are men too, and wield the very same evil and incompetence, only enshrined in an authority from which it can wreck amplified and far more insidious destruction. Let us not retreat from our rising platform only to cower back underneath the deranged machinations of Leviathan. The proper lesson, if I may suggest, is this: We are building a new financial order, and those of us building it, investing in it, and growing it, will pay the price of bringing it to the world. This is the harsh truth. We are building the channels, the bridges, and the towers of tomorrow's finance, and we put ourselves at risk in doing so.
We are at risk from accidents. We are at risk from fraud, from corruption, and from evil. We are at risk from journalists seeking headlines and from politicians seeking power and glory. We are at risk from the very market we are trying to build - a market which cares not about our portfolio, our ambitions, or our delicate sympathies.
For all these risks, devastation will befall us repeatedly. Some of us will be discouraged. Some will be ridiculed and insulted. Some will be tricked, or swindled. Some of us will be crushed or caged. We will be set upon by all manner of antagonists, repeatedly, for a long time.
So why do we do it? Why do we build these towers that fall down upon us? Why do we toil and strain and risk our precious time, which is the only real wealth we possess?
Because the world needs what we're building. It needs it desperately. If that matters to you, as it does to me, then hold to that thought. You will see through the smoke, and your wounds will heal.
So shake it off, brothers, for this won't be the last calamity endured before the win.
Tonight, my heart is with you all.
Tomorrow, my head is down. My eyes are open. And I am building.
Toward peace and freedom,