The Corporate Law Group

Boo Bitcoin Regulation

We recently saw the following headline, “Who regulates bitcoin?” What a stupid question. Why should anyone regulate bitcoin? Because it exists? Because it gained a little traction? If it needs regulation why not regulate it a year ago? Why now?

What is wrong with us that our first reaction to everything new is that someone needs to control it? And by controlling it, to make it less useful and less innovative. And by stifling innovation make us all poorer.

Cato Economist Johan Norberg opines in his new book, Progress, that the key to rising incomes at all levels is economic growth. That growth closes the income gap and raises all boats. It’s not trickle down; the poor get richer where there is good economic growth. It’s that simple. So any policy that slows growth is bad for everyone.

What slows growth? Regulation. Control. Protection. Cronyism. In France automatic looms were outlawed. After all, what would the weavers do? Protection of GM, United, AIG, Goldman Sachs hurts all of us. Regulation of bitcoin is protection of the US dollar.

And where does real growth come from? Innovation. Disruption. Creative Destruction. Ask Nobel prize winning economist and The Great Escape author Angus Deaton, or Why Nations Fail authors Daron Acemoglu and James Robinson.

Back to bitcoin. Let’s face it; government didn’t invent it. They didn’t innovate it; couldn’t have innovated it. It wasn’t their job and they didn’t have the right incentives. In New York they regulated it, killing bitcoin innovation. Then the regulatory office lawyers quit and set up businesses advising the few remaining bitcoin companies how to comply with the regulations.

What did government ever invent that didn’t involve killing people in other countries? OK possibly some aspects of Tang drink mix, the Internet, space travel and robots got a government boost, but we’d argue that if you gave the private sector back $4 trillion a year it might have stumbled onto those few things and, likely, thousands more.

Why regulate bitcoin? Because folks might lose money? So what? Government is only our partner* when we make money; they never share in the losses anyhow. Because someone might buy drugs? Not good enough. Why are you regulating those anyhow? Because someone might fund a guy you don’t like. Not good enough. Your paranoia isn’t a good reason to ruin our innovation. Yeah, get your filthy paws off bitcoin; you couldn’t have innovated it on your best day and you don’t deserve to control any part of it. Ever.