Bitcoin regulation has always been a topic of heavy debate among digital currency enthusiasts. On the one hand, there is a majority of Bitcoiners who would rather not see things regulated, as they feel digital currency development and usage will be restricted. On the other hand, there is quite a large following of people who see Bitcoin regulation as a way to “legitimize” digital currency. That being said, the BitLicense Bitcoin regulation is not working out well so far.
Bitcoin Regulation is Not Always Positive
Granted, trying to come up with a proper framework to regulate Bitcoin and its effects is not an easy task. The technology driving the Bitcoin protocol is vast, difficult to comprehend, and it is hard to predict what we will be capable of achieving ten years from now. But the monetary aspect of Bitcoin is a different matter entirely, as that is something government officials can – and will try – to regulate sooner or later.
The most famous form of Bitcoin regulation around the world is New York’s BitLicense, a regulatory framework developed by the New York Department of Financial Services. Even though BitLicense has gone through several iterations, the finalized version still leaves a lot to be desired. In fact, you could go as far as saying it is trying to remove some of Bitcoin’s core values.
One of the aspects of Bitcoin that a lot of people are attracted to, is its form of protecting user information. People can hide behind any Bitcoin wallet address they generate, without disclosing their personal information or location. However, whilst that is true, on the other hand, receiving, storing and sending money to and from your wallet address is anything but anonymous.
The way BitLicense works is that any Bitcoin-related company offering any service to their customers – with or without touching any of their funds – would be forced to keep a record of personal information for each user. For example, if you run a Bitcoin mining pool that is used by at least one person in New York, you will need to obtain that person’s name, address and email address. Furthermore, you will be required to turn over this information if the state of New York ever asks for it.
Mining Pool BTCGuild Shuts Down
It was no secret that Bitcoin mining pool BTCGuild would be shutting down at some point in 2015, as the pool operators had mentioned this a few months ago. And it looks like the closing date has been set for the end of this month, a date that bas been partially determined by the legal threats created by the BitLicense regulation.
“This fact makes it possible for New York to attempt to claim jurisdiction to enforce regulations. Whether or not BTC Guild could win in defense of such an attempt is irrelevant, since the cost of defending the pool would be greater than any income the pool is expected to generate going forward.” – Eleuthria, BTCGuild Owner, told the media.
Existing BTCGuild miners can still use the pool until June 30th, after which all stratum servers will be shut down. Withdrawals will be available through September 30th, and the BTCGuild owners have reduced the minimum withdrawal amount to 0.0001 Bitcoin. Any transaction fees associated with these withdrawals have been removed, allowing users to cash out their full balance free of charge.
Images courtesy of BTCGuild, BitLicense Shutterstock