Bitcoin Forum

How a government can still manage its control over currency and finance without harshly regulating digital currencies ? Can we ever have a win-win situation ? Is there any economic model for decentralized currencies ?

I think it is so hard to regulate something that the main essence is to be decentralize, meaning you want to control a thing that don't want to be controlled. I think the best shot for governments to do in this thing is to put a proper department or branch of their government in filtering cryptocurrency scene instead of banning or shutting it down as a whole because hindering it will not cure the cause instead it just worsen it.

We all witnessed in how modern technology really adopt from the real world to the world of virtual, and we are here to the point that in digital world we embraces the digital currency so meaning the force of strong digital police must born if governments really want to help their citizens in their country for the future cryptocurrencies.

Well, I think the only win that the government can get from crypto is taxes. Yet, people who want to use bitcoin and other cyrptocurrencies for daily transactions do not want those taxes. It's an immediate conflict and as of now, I don't think there's a valid solution.

To achieve a win-win situation for both the government and digital currency, I think the government should pass laws, rules and regulations for the strict implementation of digital currencies. Through such, the government can fairly collect taxes due it from all digital currency transactions happening within its jurisdiction. That should be enough to help the government attain its goals and objectives.

Controling a decentralized stuff would really be a hard thing for government this is why they do really do such thing on banning it some did able to adopt it because they cant do anything.I do love the idea that cryptocurrencies should really have an another department on where government would able to monitor rather than on banning it.

I think Bitcoin regulation is win-win situation for both. Governments would make "order" on that way on Bitcoin market and have some control over it, but not full and centralized of course, and for Bitcoin that would mean more adoption especialy for businesses. Bitcoin users don't have to be afraid from regulation.

But in this case, what does the government get from the regulation? If more people use BTC, they can avoid paying taxes for their transaction. This would cause a lot of issues, especially with debt.

Government likes to put taxes on everything so the only way they would benefit from digital currency is to put tax on them. That would immediately spark the rage and discontent of many users that are using it everyday , gamblers mostly to be honest. There cannot be such situation for the moment and it is not looking good even in the short and distant future.

Legalization is going to be that win-win solution you are talking about.  From legalization the government is going to have it's benefits in the se a of taxes which exchangers and ATMs would pay to it. And digital currencies are also going to have it's pluses, one of the is the price, we all here care mostly about the price and legalization would attract more crypto users, that will pump the price for all coins to the sky.

I think the best thing government can do is regulate wallet provider and give licenses to the legitimate one. Then just monitor criminal activities that uses digital cryptocurrency. That’s only the ideal participation they must do and should not touch the privacy, all personal information and keep out from monitoring users with only good intentions. It is the only win-win situation government and bitcoin community will be satisfied about.

Nope it wont happen because the two ideas you are talking about are literally contradictory in nature. One looks to centralize and control money supply whereas one looks to decentralize and not control money supply. Please

tell me how these two opposing forces can work side by side in harmony? I dont see it happening, atleast for sure anytime soon.

government can only benefit from cryptocurrency by adopting blockchain technology into the financial system. Governments may not successfully be able to regulate bitcoin and others cryptocurrency but they can adopt it into the financial system. Bitcoin on the other hand should do what ever need to be do to make transaction transparent, so that  governments can understand what is going on.

Governments gonna to follow crowd and first adopters always take advantage of serving first. But world regulation rules dont let them do their job as they wish.

Yes i think that the only way to make banks profit from cryptocurrencies is only if they adopt cryptos or if they start working with them (offering funds with crypto's profits) or any other example that can be profitable for them too, by this way they will stop making fud against cryptos because they have profits in common.
But probably this is the only way out in bitcoin-banks war, i guess.

Most people think that any form or regulation will be harsh - because we don't need to pay even 1% of any tax related to cryptocurrency.
Also, we would have to be anonymous and have all perks of decentralized digital currency - but we need to face the reality:
Bitcoin is not the holy grail of economic heaven - sooner or later you will need to declare that you own BTC, or you will pay tax for your BTC related profits.

Well that's actually easy. People are interested in decentralized digital currency which uses block chain technology and governments are very much interested in block chain and are conducting research and study on it is what I heard. So if you combine both of them you will get a crypto currency which will be regulated but at the same time block chain technology will be put to use.

It must be clear to us all that if we’re talking about government, I think we must be specific if it is officiated by good public servants or the corrupt and self centered officials.

If a good government make a legal move for bitcoin I’m more than 110% supports to it. And it will be most of us in that case because we all confident that they’re doing it for the people and for the country.
But if a corrupt government officials are the once pushing it, I will opposed on any regulation that they will implement and I don’t care if I will violate a law on doing so.

Taxes is a way for the government to generate income and revenue but then as you said, I'm sure that the bitcoin users would be against this because this would mean additional cost for them. But this would be the likely thing for the government to do, as with other new entities that need control.

I remember when Uber was new in our country, nothing was done to regulate it but after some time they require them to have some licensure. Uber can still continue its operation and at the same time - is regulated by the government. Perhaps something like this would be applicable for bitcoin and cryptocurrency.

tax. people must give tax to government (other says). but it's likely win solution for one side only, i'm personally don't want to be taxed. They are kidding me, bitcoin created to avoid something like bank and tax.
Maybe we can look to japan or other countries who legalize bitcoin. they let people use bitcoin, no tax, but have some rules to follow (still give problem to anonimity of bitcoin user). Also hear japan will create J-coin and dubai have Emcash, that's way they can still get benefit from cryptocurrency

That will be difficult to find a win win solution to the goverment and the cryptocurrency. as far as i know that the goverment wants crypto to follow the government regulation but that looks so difficult,

Government can take control if all the in and out and pee-to-peer transactions are crytpo based meaning no fiat currency involved it is out of their jurisdiction if no government owned transaction involved since all crypto currency are decentralized and owned by private individual. But everything needs money, the popularity rises of bitcoin and its value it is all because of money, we mine bitcoin for exchanging goods and services to the merchants and retailers but merchants want money. Money or fiat currency was owned by the government  and you are using it so you are entitled and obliged for taxes. Cryptocurrency needs fiat after all and government need taxes too. For sustainability and win-win situation, tax is the answer. No tax, no crypto.

I agree it is hard if to regulate if the main purpose of the government is to take over the digital currency themselves.  But I think if they are too regulate transactions, I think it is not that hard.  Government needs exchange platform to be licenses so that they can have access to the reports of these exchanges.  And we all know people cannot take profit if they do not trade on these exchanges.  So I guess government just need to go to exchanges and ban a p2p selling.

I think what the government can do to benefit from the cryptocurrency is to identify it as a digital asset and for them to have part of the transaction is to tax the platform involved in cryptocurrency since it is easier to tax a single entity than to find each bitcoin owner and have them report their income from it. The platform then would include the tax charges in the transactions so that they are not the only one bearing the tax charges. When there is a regulation like this, the people who are doubtful with bitcoin would then have trust of bitcoin since it already has a regulation and would eventually be part of the community. An additional demand to bitcoin would make its price increase. Through this way, it would be a win-win situation to both parties which are the bitcoin enthusiasts and the government.

Sooner or later there will be a win win with them, because they have to use digital currency in future, actually many goverments had already many ideas about it, they can't stop the future, they have to become the future.

Probably they will taxed it, every transactions with digital currency will have a tax thus making the transactions way higher.
Also, they would probably make every bank involved with digital currency - could be a bad thing and a good thing.
We will have more security with our digital currency unlike the present.

Its in my own belief that theres no win-win with BTC. Regulations made upon it are easily eluded because by design, BTC was developed as a peer to peer electronic cash system. Its nature is to break borders and to be independent from the traditional financial organizations.

What would stop someone from creating a secret BTC transmission and conversion service for the darknet?

No, but isn't the while point of BTC being completely decentralized. If you even give a little control over to the government the while point of btc will be destroyed. That's what I think at least, and anyways government will never be happy with having only a partial control over currency, then will eventually try and take full control which will cause troubles.

Government will come up with their own centralized version of their fiat currencies in the name of digitizing currency, also they will use blockchain technology to digitize their fiat into tokens. They might advertise those token as good as bitcoin or crypto but in reality all those token will be just worthless  like fiat we have these days. It will have infinite supply and government will have full control over token addresses and tokens.

I don't think government will ever adopt decentralized currencies because there is no win-win situation for government in this.

Government can still manage both , regulating cryptocurrencies will be based on the cashing out of money which can be found on cryptocurrency exchanges, Trading cryptocurrency should also regulated that it will not violate the law imposed about trading. It could be a win win situation if they will impose a tax for the profit of these exchanges.

And digital currency is unstoppable even bitcoin. I do agree that even them knows that in due time the banking system will be just an ordinary one and the cryptocurrency is on the center. That is why they’re silence about it, they have interest on our banking sytem, government official have even huge shares on that profit by hiding on the shadow of they’re dummy.

A big NO...
If you are talking about all decentralized crypto currencies than government can never monitor all crypto related transactions in their territory without which they can't force their citizens to pay taxes for all profit they will make by investing in crypto. Also money laundering through crypto is quite possible and this can't be controlled without regulating crypto exchanges.

So government will always have harsh regulation against bitcoin and crypto.

Governments indirectly regulating Bitcoin is a win-win situation for both governments and Bitcoin. I think it is somewhat inevitable.

Legalization would definitely boost Bitcoin adoption and the governments would make profit from taxes. The problem is then most of the countries would have centralized exchanges similar to Coinbase. Then the governments might use Blockchain analysis tools to monitor financial crimes, most importantly tax evasion. I don't think a law-abiding Bitcoin user would have any issue with this, but users who prefer using a decentralized currency to protect their confidentiality/privacy night find this a bit harsh.

Another issue bothering governments about Bitcoin is consumer protection. Being decentralized and irreversible, it is quite impossible to put Bitcoin under any consumer protection laws.

In the US EFT's (Electronic Fund Transfer) systems provide protection to the consumers under the EFT Act, but due to the nature of cryptos it is not possible for them to be in complete compliance with this Act.

Regulation is good, but too much harsh regulations would lead to more decentralized exchanges/OTC platforms.

It is hard to have a win-win situation between government and cryptocurrency because government wants the control and get a tax. There will be a rage on the community if that happens.

Decentralization being a core-concept of BITCOIN, itself contradict with statement "regulation of Bitcoin". I don't think there is any feasible solution to this problem. Bitcoin users want privacy and govt. want transparency in a transaction.
Let's hope if there is some solution to this problem, then it will not conflict bitcoin user's interest.

I think all of us feel that we need here some regulations and control over the cryptocurrency world and ICOs.. but the reason cryptocurrency exist is that people wanted don't have a total control over their money from goverment.. so it should be a very well balanced system to make it win-win situation... but it's hard to imagine now)

The win win for me is not even to legalize the use of digital currency but to enact laws that propels a user to indicate that they are connected to the usage. By this I mean, the government should come up with laws that makes it crime if a user does reveal that they are into cryptos. This could be done through government agency like the finance department or banks connecting either the phone numbers or something. Also, to enlist the cryptos that should be in use etc.

One possibility could be that government approve digital currencies as certified security. In this way digital currencies will be legalized but at same time remain outside from complications of being broad money.
Also government and banks can maintain their reserves and pledge loans etc in cryptocurrencies. This way there will be holding of cryptocurrencies on large scale and will contribute to price rise. It will be win to win situation.

Governments are all about control and power, bitcoin and the blockchain technology takes that away from there. Government would implement enough regulation to give them control, otherwise they would just ban them outright. Let's see how it all develop in the next few years.

The best thing for government to do to make it a win win would be if they used public blockchain voting.

It could be a public key shows who you voted for, but it is tied to a private address that is encrypted. Something that is verifiable and works great for aving hundreds of millions vote on the same day.

The win win will always make cryptos generally accepted because I don't think it isn't going to be banned. The government should make laws that can work in check mating the users of bitcoin like making some payments of bills connected to bitcoin involving the banks.

Regulating the bitcoin is compromising the goal of bitcoin to remove the middle man (the fee). Government should create their own centralized digital currency and leave bitcoin alone. If there is regulation, you win some you lose some.

Seriously you think that is the problem? Actually there is more than what you said, having a transparency is one of the greatest threat for the government of course it is because they wanted to control each money that comes in and out of their country. And that was not the main goal of bitcoin, because if that happens who else will mine if their work is for free, there are so many features of bitcoin that doesn't have any contribution for the governments and that is the reason why some country ban bitcoin.

THe win win situation for both government and digital currency is that crypto won't be used as mainstream currency but rather it will be used like how credit card is used today. That way, governments won't need to get out of their way to go against cryptocurrencies, also they would not see it as threat for banks. Regulation would also be intact for it to be really called a win win situation for both.

I think they can do adoption for digital currencies but they will put some taxes in the income for the digital currency users and i think that is a win-win situation for the both sides. Government doesn't want to accept digital currencies because it is decentralized and it is easy for the people to make money from it but for them it is impossible for them to make money from digital currencies unless they will charge taxes for it.

I think shaking hands is enough

Short term, there are multiple ways it can be done.
Long term it is a war and such kind of war that no government can ever win.

There can be no win-win situation for national governments and digital currencies as the former wants to exert for centralised agencies which are under its control, while the latter can never agree with a centralised model. The only winning situation for governments here is attaining the knowledge of blockchain technology which they can implement to create a national cryptocurrency, an attempt to modernize the traditional fiat system, which again leads to a centralised model.

If bitcoin creates a big change not only to its users and investors, maybe the government are going to accept it.And once that there a visible change and when the way people live gets better then maybe governments and there corresponding countries will fully trust bitcoin.