Does bitcoin facilitate illegal trading? Sure, St. Louis Fed Economist David Andolfatto says, but so does the U.S. dollar, gold, etc. Bitcoin transactions travel wallet to wallet, where the wallet identities are disguised. In this sense, using bitcoins is like using U.S. cash in facilitating illegal trades. On the other hand, he points out, wallet histories are publically available (unlike U.S. cash transaction histories). He also notes that bitcoins support a great deal of legal trading.
Can bitcoin be regulated? Some countries have issued an outright ban on the use of bitcoin and other virtual currencies. Can bitcoins be taxed? In the U.S., the IRS has recently ruled that, for tax purposes, bitcoins will be treated as property and not as currency. For example, when you buy then sell