Bitcoin Forum

So I have been thinking about this of late: what is the implication of government regulations on the decentralized nature of blockchain? Do you think regulations and decentralization can co-exist? I'll appreciate your comments and views.

I think regulations can potentially ruin the movement towards decentralization. All of these regulations will create Blockchain implementations with the need to standardize. Once standardized, they won't be as secure.

The whole point of blockchain is to not be reliant on government structures, so this would kind of defeat the purpose.

The original idea is to have a currency that can regulate itself without the need for any outside party, be it a government or any other organization. At least from what I can see with Bitcoin and its network, this concept is pretty much alive and kicking. I don't think the Bitcoin system can be regulated, even if someone wanted to do that. What part can the government regulate? It can regulate the interface between crypto and fiat -- the exchanges. Maybe in the future we will have totally decentralized exchanges, but for now, the exchanges and the banking system on top of that are still centralized. This part can and probably should be regulated.

I think regulations and decentralization can co-exist, the government can handle it in some ways. The proof is, many countries has accepted cryptocurrencies and related companies, they are Malta, Bermuda, Switzerland, Slovenia, Singapore, Hong Kong, Japan, USA, Germany, Estonia, and much more.

So you think that the fact that many countries accepted crypto at the national level, it makes it okay to allow regulations? 🤔

I would like to say that it is possible, but probably that's not so realistic. As crypto becomes more and more popular, we will see more pressure from the government, that's for sure. What I think will happen is that we will have some sort of transitional period, probably a couple of decades, with a mixture of centralized and decentralized solutions.

The whole premise of systems such as Bitcoin is being censorship-resistant. Regulations, unless fair, won't really stick with these ecosystems.

Govts are getting pressured right now, because the adoption of blockchain technologies is getting huge, including private ones, and the huge lack of regulation makes companies halt a lot of their work. Hopefully one country sets a good example that other ones will follow, because otherwise, it'll be judicial chaos everywhere. My faith is in EU right now to regulate crypto lightly.

yes, we all probably already know and understand about decentralization and I think decentralized is a problem solver to cure defects owned by centralization. we as citizens have the right to get decentralization and the regulatory obligation is to keep decentralization reaching its objectives appropriately, not harming the community and acting decisively if there is a deviation.

The two described items aren't mutually exclusive.

Take a look at smart contracts; a form of regulations. They define a series of rules that exists for all entities participating in the contract. The contract is distributed still though.

"Apple vs Oranges: The struggle for mainstream adoption"

Good question. In my opinion, regulation can coexist with decentralization –at least I hope they can. I like the fact that users are able to retain a certain degree of control over their own money, while I’m also in favor of having legally accountable exchanges. So perhaps there could be a middleground? What do you think?

The government regulation can work in a decentralized manner.

There is no reason we can't use bitcoin or other crypto for things like verifying identity/driver's licenses, KYC/AML.

The thing is that we're giving the powers of the government and spreading them around. We can create a system where a person can show their ID without showing an ID number.

Showing a passport while keeping his identity secret from airport staff.

Working at a job with proof of citizenship without a name.

Now that is the kind of stuff I like to see with crypto.

There is an alt that is doing some of that, but I won't share the information here, I'm totally shilling it for other reasons at other places.


Keep in mind that Western governments have a certain extent of Separation of powers. AKA decentralization of authority. There is no-one part of government (in theory) that can have absolute power.


Of course if viewed as a spectrum, the bodies or government are still massively centralized but the government is not a monolith.

I think they can co-exist. Regulation will not mean a total takeover, right? I think Japan who is very pro-crypto have certain regulations in existence already. So yes, it’s possible.