Political and Social impact of Bitcoin

[mrmagick]

One of the most interesting things about bitcoin for me is that it has the potential to end government as we know it.  I know it sounds kind of out there and there are plenty of other Bitcoin Truefans out there that have said the same thing, however I think that the real ramifications of bitcoin have yet to be explored.

Bitcoin is effectively untaxable.  What does that mean politically and socially?  Well if bitcoins become a standard for online transactions, that alone could destroy fiat currencies worldwide.  Why deal in dollars when you know that inflation is destroying the value of your dollars?  And that goes for every other fiat currency.  When people become aware of The Bitcoin Advantage (instant virtually anonymous payments worldwide, secure, encrypted, virtually impossible to tax, etc) all it would take is a few million people to start using it and that could happen within the next few years if it continues to grow at its current rate. 

I happen to be rooting for bitcoin or something like it.  I hate using FERNs (federal reserve notes) I always feel like I am somehow paying with monopoly money.  I own quite a bit of silver and gold and I would love it if I could easily make transactions online for silver and gold, I was an early adopter of Egold and thankfully saw the handwriting on the wall and got all my holdings out.

Some people say that the government will crack down eventually and I would be very surprised if they didn't, however that may not matter much.  Take a look at bittorrent.  Bittorrent itself isn't illegal but it is used for illegal activities like trading movies and music, etc.  The government has ruled those actions illegal and punishable by jail time and fines.  The RIAA and MPAA have filed law suites by the hundreds against end users as a scare tactic and governments world wide have tried to shut down torrent indexing sites like thepiratebay.com and isohunt with little effect.  Bittorrent is still going strong.  Bitcoin has all the advantages of bittorrent and is nearly completely anonymous, plus its MONEY!  That alone makes it more useful than bittorent. 

Bitcoin is the future of money.

[vertygo]

Although I agree with the ideology, I can not believe it will end government. As much as people bitch and complain about government, I sincerely believe that 99% of people couldn't live without it.

Bitcoin will - and indeed does - allow for a much more private way of doing transactions online. Like using cash in the real world.

The problem is, the government needs the tax money. Depending on your country, some products are taxed many many times before you even pick it up in the store. Raw materials, refined materials, labour, etc etc.. every step of the way, tax is collected. The upshot is, if they believe revenue is going down at one level (ie. the consumers are buying products with anonymous currency and not paying appropriate taxes) then they will simply raise the tax at an earlier level, and make the end good more expensive. Or raise income tax, or land tax. It's not a battle that can be won by subversion, but actual active political change. </end soapbox rant, heh>

I do think it sends a strong message however, and the long term response will be very interesting. ie. Paypal immediately freezing accounts known to be doing currency exchanges.

[Dolphin]

I'm interested in this topic too. I think bitcoin has much potential to change the way money is used by and between people.
I think only time will tell the answers to all of the questions we have nowadays. I certainly feel some kind of fear when thinking about how governments and banks will react if this "experiment" will keep on growing and gaining speed and weight. You know, nowadays it's all about money and controlling its flow... hm, maybe it was always like that...