Bitcoin Forum

So I've been lurking around this forum for several weeks. I finally had something I wanted to say but couldn't post it in any of the other boards so I put it here.

I've noticed many people saying that governments fear Bitcoin and they will want to fight it. I don't see this as a completely accurate statement. It is the central banks around the world that should be fearing the potential of Bitcoin. A government should not fear Bitcoin, unless it fears its own bankers. If you look back through history, you will see that around 1100 King Henry I  implemented tally sticks in England. Tally sticks have a number of similarities to Bitcoin, most importantly taking away the supply of currency from the goldsmiths. The tally stick system remained for over 700 years. England did quite well for itself during this time.

The point is, if only our political leaders could see the value of taking away the supply of currency from the central banks, they would not fear Bitcoin but embrace it. The government would still easily be able to collect taxes in Bitcoin. When an employer pays its employees with bitcoins, it will withhold the income tax as it does now. When goods are sold, even on the Internet, taxes could be applied to the purchase. Nothing has to change for the government as far as its ability to collect revenue from its citizens. It is only the central banks that should fear. We need our politicians to wake up and realize there is another way, a way in which the government would not have to borrow from a private institution and then impose ever increasing taxes on its citizens just to pay back the interest on that debt.

The government could, if it wanted, stop paying the interest on that debt. That reduction would be a direct reduction in taxes its people. Just like we learned from Reaganomics, the best way to stimulate an economy is to lower its taxes. Almost sounds utopian doesn't it? But it could become a reality in our lifetimes, if only our elected leaders (the ones we put in power) would wake up.

I see an easy work around to that....

Governments can tax shopping with cash, why should'nt they be able to do this with Bitcoins?
Sure they will not be able to tax every single transaction, but it's the same for cash.

If goverment cannot control it they hate it and it will became a threat to them.

It's a bad thing for poor countries which does not have a valuable currency. Bitcoin could become more trusted then the local currency and the government can not control their own country anymore.

First of all 99% of people who is going to answer here is wrong and the last 1% will have a message 99% wrong as well. Mostly because they got too big of an opinion regarding themselves and bitcoin as well as a gripe against the government.

Ill try give you a few actual reasons but remember that a currency is very complicated and there are allot of pros and cons however you manage it.
In no particular order:
They can not print more money. Most countries use their power to print money to balance the economy. Countries that have adopted the Euro also suffers from these problems but its not an absolute bad thing. Just a different way things are handled that requires a country to find new methods.

Its not bound to an Identity so the government can't keep track of your money and hence can't tax you on it. Especially dangerous in combination with criminal groups or terrorists like Al Qaida.

Its an experiment and not designed to be sustainable in the future or distant future.

Are we part of the 99%?

Most likely... yes.

Governments hate Bitcoin because we are a VERY big danger to their monetary system.

Whose monetary system? That's a very important question to answer.

I think the most they hate that they do not have the control, like they have with fiat money.

I suppose I could understand how the United States is different but the original question was directed at all countries in the world. The United States is different in that the USD is the country's number one export. A move to bitcoin would end the monopoly of the dollar. Bitcoin would create an even playing field for ALL countries around the world. This could scare the US but if the rest of the world started using it, I don't see how the US could stop it and would eventually have to join the party.

Blows my mind that peeps think it can not be taxed or monitored by a government.  It can be taxed by regulate any point of sale on a countries soil.  It can be taxed and monitored at any exchange on their soil.  It can be taxed and monitored when transferred to any bank on your soil.  See dwolla/Mt. Gox.  They can and will control it within their borders and it's a necessary step for widespread adoption as a payment and an investment. They only way it can't happen, is if you never spend it on a service or good and you never exchange change it for local currency.  In which case, your just sitting on a number that makes you happy.  It's going to be a quite a while before you can do end to end BTC, if ever.

It would not matter if the rest of the world used bitcoin because a currency is intended to be used internally first. Trying to force someone like that is just pointless.

Bitcoin by design cant be monitored and if you exchange in your wealth with services that also cant be monitored they are essentially gone. After that you can use your separate ID (your bitcoin wallet) as your identification for buying goods or perhaps currencies without ever using your actual identity.

This is exceptionally easy to do since Bitcoin is an internet based currency not limited or defined by country borders.

One example is if i went to a bar and then payed them with a fraction of a bitcoin. Nowhere does my identity get recorded and the transaction is keept anonymous. Btw there are bars like this already.

because it's anonymous, no one can trace a transaction.

And that right there is a part of the problem. If our politicians think that too, they will attempt everything in their power to stop it. But it can be taxed very easily. When you go to the grocery store and buy $200 worth of groceries using cash, non-traceable dollars, don't you still pay tax? Where does this fear of not being able to collect taxes come from?

It's less anonymous than cash.

Exactly,  there are already monitoring and taxation systems in place that deal with both commodity exchange and currency exchange.  As we are seeing now with Fincen, the IRS, and law enforment, they are already being applied to BTC.  It's not even that difficult to do.  Unlike cash BTC does have a fully traceable chain of ownership in the blockchain.

And you think its impossible to buy something without the tax? Its surprisingly easy to do actually.

governament cannot control the transaction and applicate fee

99% right? Well you posted a few incorrect statements in your post, first of all Countries don't just "print more money" actually printing money is down to IMF, what are the IMF?

"The IMF promotes international monetary cooperation and exchange rate stability, facilitates the balanced growth of international trade, and provides resources to help members in balance of payments difficulties or to assist with poverty"


Infact, countries are in debt because of this very reason, so I don't know what you mean about countries printing more money off to stabilise the economy.
Every time a country prints more money off, the more the value of that certain currency goes down, why do you think people are sticking with Bitcoin, because there's a limit to how much there will EVER be, meaning it should get extremely value at some point. (Although this may never happen)


Now, what you said is that countries use their 'power' in order to "print money off to balance the economy", no not really, like I said earlier in this post, the countries are not the ones who actually are in 'control' therefore can't just use their 'power'.

But, back to the post.
In my personal opinion, I think they don't like it because they can't track you down, think of it.
Most ways to pay online require a bank account, a bank account needs you to provide identity.
However, with Bitcoin you don't need any of this, Bitcoin can be generated in a few seconds and sent anonymous across the web for ANY service/product.

This causes a lot of problems, for instance many Bitcoin users are branded for purchasing illegal drugs online and can't be traced afterwards.
Now, for this very reason Bitcoin as hit the news many times, it's a scare tactic more than anything.

Bitcoin will end governments!

No IMF does not in fact "control" anything. They just monitor and provide advice. The trust put into them gives them a certain power since the market will listen to their speculations that is it. In countries that have retained the right to print money they can and will print if they get too far into debt because they can trade it BEFORE the printing is reflected in the markets and start inflation.

Yes, I didn't mean to say control, however countries can't simply print off money whenever they like.
In fact, most countries owe IMF a lot of money, for example lets say IMF printed $5 off to america, then the interest on top of that would come to $10 next month, because america only has $5 to run their country they would of not been able to earn any more money (When the first money was printed there were no buying from other countries because countries couldn't afford it at that time). Therefore a lot of countries are still in debt.

However, I must apologise, because it your initial post I thought you said "counrties just print more money" which kind of got me going (I tend to read but not take in every word, lol).

No, it will not.

Anyone who says bitcoin is not a threat to the monetary system is lieing to themselves

It is absolutely a threat the monetary system. But being a threat to a monetary system and being a threat to a government are two different things. The question is, what threat is there to a government (perhaps other than the US, which has its own unique monetary position in the world)?

... How can it be a threat to the monetary system while in itself be a monetary system?

The truth is however that for as long as for example taxes are paid using the local currency bitcoin will never be more then a sub currency that you can invest in. You cant replace something that the government is demanding of you after all.

Government controls currency by enacting different monetary policies. The point of these different monetary policy is to allow the Fed to control the economy, and in particular output and inflation, through the interest rate. With bitcoin the government  cannot touch the supply or even tax it. So they fear a whole economy could be created without them having a say or getting tax from it .

Let The Governments Fear Us! Muhahaha!

They should hate us... Because we hate them :P

But, but, my petrodollars are backed by the full faith of the US government.

That was hard to type with a straight face.

What makes you think they even care about you?

There are plenty of ways for a government to tax without money; corvee labor, tariffs on goods.

They will hate what they can't control but its anonymous now.  How can they tax you if they have no idea who you are?

did you guys see? http://www.extremetech.com/extreme/155933-homeland-security-seizes-account-of-largest-bitcoin-exchange-mt-gox

the hate begins

About Homeland security going after Mg. Gox, I hope that Bitcoin thrives in the US. Bitcoin will show most of its growth in countries like China and other emerging economies. At this moment, China will do anything to undermine the dollar, including the support of Bitcoin.

Bitcoin has the problem of being unregulated which makes it more prone to market manipulation than regular currencies (not saying regular currencies are not manipulated, but it usually takes a nation to do so, like the japanese yen being balanced against the dollar). Also cryptocoins are the perfect mechanism for the entrepreneurial money launderer or to help fund nefarious endeavors. Fully anonymous it is not, but it would be considerably difficult to fully track a coin through its lifetime

Not true. There will most likely be no government that actively supports Bitcoin because they got nothing to gain from it. If anything its an annoyance as a loophole for taxes and illegal money transfer. The best we can hope for is them allowing Bitcoin to exist in peace.