Bitcoin Hits $400 Ahead of Senate Hearing On Virtual Currency

An anonymous reader writes "The value of bitcoin has surged through the $400 barrier for the first time, as unprecedented growth sees the virtual currency's value quadruple in just three months. Meanwhile, on 18 November, a Senate subcommittee is scheduled to hold a hearing on virtual currencies like bitcoin and its lesser-known competitors litecoin and altcoin. The hearing comes after a unit of the Treasury Department earlier this year issued guidelines stating virtual currencies should be subject to the same anti-money-laundering laws as traditional currency-transfer businesses like Western Union."

Altcoin is best altcoin

[Anonymous Coward]

Yes altcoin is the best of the altcoins, there isnt an alternate bitcoin called altcoin, all alternatives are referred to as altcoins.

Re:Really?

[alexander_686]

That’s not exactly the issue.

There have been various schemes to avoid taxation and/or for criminal use. I.O.U.s, scripts, payment-in-kind, coupons, assets swaps, forward contracts, loan forgiveness gifting techniques, etc. Each of these techniques have legitimate purposes but at times are just way to circumnavigate the law.

If I swap my services for goods – US Dollars, BitCoins, an old car, credits towards baby-sitting – I have earned income that I need to declare at fair market value on my income tax. Now determining the fair market value for some of these goods are easier than others but the principal remains the same.

Re:Real reason is due to Swiss Banks

[CreatureComfort]

Bitcoins are NOT anonymous. Every transaction a particular coin is part of is irrevocably written to that coin for all eternity. So, it is only as anonymous as a person keeps their bitcoin wallet identity anonymous. Which is effectively impossible if you want anyone to say...send you bitcoins. Now tying a particular wallet address to a physical address or person is currently not inherently easy, though not impossible at any point where Bitcoins are turned into, or from, cash.

That is actually the crux of the Senate hearings. Essentially the FTC is asking congress to pass legislation that says that any service designed to exchange between Bitcoin and cash, be required to follow all the laws that other credit/cash exchanges (and a slew of other businesses) have to follow, a key part of which is properly identifying all the participants in the transaction.

So, MtGox,, etc. would be required to verify your name, address, credentials, etc. when you setup an account, so "You" can be tied to a specific wallet address when the Feds go snooping for illegal activities.

Re:Anonynimity

[crtreece]

the coin went from user A to Silk Road and then to a bunch of random wallets and back out to user B, and user C who was the person who sold the item got a different one

Except that Silk Road, or any other user, can create an effectively infinite number of addresses to send and receive the coins. A user doesn't have to give their SSN, drivers license, and proof of residency to get a new address. Knowing how many coins are at any given address is indeed part of the bitcoin protocol. Knowing who controls the keys for that address is not part of the protocol, and it requires additional work to find the data NOT in the blockchain to understand.

So User A sends coins to a unique address at SR, where it gets thrown in the pool, sliced, diced, and chopped, and reconstituted, then goes out from another unique address to User B.

Granted, if you capture a wallet, you now know a group of address and CAN backtrack through the blockchain to understand who some of the players were in previous transactions. Is bitcoin anonymous? No. Does it allow a user to make it difficult to keep track of what they are doing, and with whom? Yes. Does some three-letter agency have a tool that tries to map those associations, I'd bet a bitcoin on yes.