Is Bitcoin immune to government regulation?

Is Bitcoin immune to government regulation?

by Jesse Colzani via Bitcoin Magazine

Law, markets, architecture, and social norms are forces that constrain individuals’ behavior. Can governments take advantage of these to regulate Bitcoin?

When asked whether the Bitcoin network can be regulated or not, people tend to answer in a binary way:

- Everything can be regulated.

- Bitcoin has already irreversibly separated money from the state.

What does Bitcoin regulation depend on and what are the tools that regulators can reasonably use to limit its adoption?

Regulation is considered as state-mandated legal restrictions. But laws are not the only forces shaping society. In what is often referred to as the “pathetic dot theory,” Professor Lawrence Lessig identifies three other forces that constrain the action of an individual:

- Markets regulate through the device of price and cost-opportunity.

- Social norms represent an intricate set of standards of behavior that are widely accepted within a community (like tipping a server in a restaurant).

- Architecture includes geographical, technological, and biological barriers to human behavior (like laws of physics preventing us from levitating).

Each force can — intentionally or not — influence other ones. Laws can limit deforestation (architecture), social norms can shape markets, and weather (architecture) can affect agricultural production and food prices.

When a law cannot