Government & Bitcoin

[bornil267645]

The sharing economy is just going to continue to grow, and governments will be challenged to understand and manage its implications while embracing its benefits. However, governments will be at a significant disadvantage if they wait too long and newer technologies and markets will have already been developed that do not follow traditional models. Think of the following: Uber is the world’s largest taxi service and owns no cars. Airbnb provides lodging yet does not own real estate.

How will local governments adapt to these new ways of doing business that are disrupting traditional business models? All we know now is that governments are a long way from even contemplating and accepting this new reality.

[1714042870]

1714042870

[Amph]

government is already adapting and working with banks, there are some of them which are using blockchain technology to overcome probably bitcoin

i doubt it will stay there and watch bitcoin sucking its fiat(scam) currency

[tyz]

government is already adapting and working with banks, there are some of them which are using blockchain technology to overcome probably bitcoin

i doubt it will stay there and watch bitcoin sucking its fiat(scam) currency

Do you mean there are banks that already use the blockchain technology in production environment? If so, can you point to some articles or press releases which state this? I know only from some banks researching on blockchain technology (e.g. UBS).

[Hazir]

The sharing economy is just going to continue to grow, and governments will be challenged to understand and manage its implications while embracing its benefits. However, governments will be at a significant disadvantage if they wait too long and newer technologies and markets will have already been developed that do not follow traditional models. Think of the following: Uber is the world’s largest taxi service and owns no cars. Airbnb provides lodging yet does not own real estate.

How will local governments adapt to these new ways of doing business that are disrupting traditional business models? All we know now is that governments are a long way from even contemplating and accepting this new reality.

I must tell that is it hard for me to understand what is your question here. But you have to know this: Every Bitcoin expert believes that government intervention in the bitcoin industry is simply inevitable.
People believe that bitcoin simply must change to bring it in line with other payment systems. I am afraid this means adding identity information to bitcoin transactions and making it possible to blacklist/track funds.

[neoneros]

I think bitcoin, like all other things internet will surpass any government, try to kill it off and it will emerge somewhere else. The people will get what they want and need if it is available, no government or laws can supress it. Building a super firewall, people will break holes and find their ways around it. Spy on your citizens? Enter Tor browsers and more secure communications. Try to ban or overpower bitcoin? Who knows what we will come up with, but it will never be the way the governments have intended. We never surrender or break at the will of those who do us wrong!

[Cryptowatch.com]

I am afraid this means adding identity information to bitcoin transactions and making it possible to blacklist/track funds.

Haha. Well, they coulld always make govcoin and announce it as the "Safe crypto backed with the full faith by the central government, whenever we don't like you or what you do, we'll seize your funds. Trust us, it's for your own protection, we never do wrong!".

I'd say, let the  crypto to fiat exchanges deal with the regulatory headache and leave the rest alone. Even if draconical restrictions were made, people would simply route around it. Freedom and innovation, some statists  should look up those phrases.

[Q7]

Governments are already aware of the blockchain technology and they acknowledge the potential that it holds and how it is going to affect and change the existing banking and financial system. But they are not ready to use bitcoin being something they have no control over. I'm sure they already have something in plan to utilize blockchain but as i said what they want is to have something that can exist alongside their system.

[BTCevo]

Governments are already aware of the blockchain technology and they acknowledge the potential that it holds and how it is going to affect and change the existing banking and financial system. But they are not ready to use bitcoin being something they have no control over. I'm sure they already have something in plan to utilize blockchain but as i said what they want is to have something that can exist alongside their system.

Yeah, for now it's really hard for them to use that blockchain technology. Lets say if they are going to implant it to the bank, are people ready for that? Still so many countries still need to know more about bitcoins if they really want to make this blockchain technology really useful. They haven't ready for bitcoins to become one of our currency and they can't even control the movement of bitcoin due to lacking so much information. May be it will be 5-10 years more this bitcoins will be used worldwide

[Dotakels]

The sharing economy is just going to continue to grow, and governments will be challenged to understand and manage its implications while embracing its benefits. However, governments will be at a significant disadvantage if they wait too long and newer technologies and markets will have already been developed that do not follow traditional models. Think of the following: Uber is the world’s largest taxi service and owns no cars. Airbnb provides lodging yet does not own real estate.

How will local governments adapt to these new ways of doing business that are disrupting traditional business models? All we know now is that governments are a long way from even contemplating and accepting this new reality.

Of what country government that you are talking about ? I think it is on the people of that country don't blame your government that they can't adopt the new ways of business and if you think that your government disrupting your traditional business model they not disrupting it they just do it yo easy to trade or negotiate to other traders.

[sana54210]

The sharing economy is just going to continue to grow, and governments will be challenged to understand and manage its implications while embracing its benefits. However, governments will be at a significant disadvantage if they wait too long and newer technologies and markets will have already been developed that do not follow traditional models. Think of the following: Uber is the world’s largest taxi service and owns no cars. Airbnb provides lodging yet does not own real estate.

How will local governments adapt to these new ways of doing business that are disrupting traditional business models? All we know now is that governments are a long way from even contemplating and accepting this new reality.

Governments have already started to monitor the rise of bitcoins, once bitcoin gets mainstream enough, the value and market cap of bitcoin will increase significantly, then will come the time when the world powers will see it as a major force of economy, some will resist it and some will adapt to it.

[Dotakels]

The sharing economy is just going to continue to grow, and governments will be challenged to understand and manage its implications while embracing its benefits. However, governments will be at a significant disadvantage if they wait too long and newer technologies and markets will have already been developed that do not follow traditional models. Think of the following: Uber is the world’s largest taxi service and owns no cars. Airbnb provides lodging yet does not own real estate.

How will local governments adapt to these new ways of doing business that are disrupting traditional business models? All we know now is that governments are a long way from even contemplating and accepting this new reality.

Governments have already started to monitor the rise of bitcoins, once bitcoin gets mainstream enough, the value and market cap of bitcoin will increase significantly, then will come the time when the world powers will see it as a major force of economy, some will resist it and some will adapt to it.

But is better to adapt so that we have a unity in the currency and money. And its better to have a mainstream in the bitcoin so that the valued of it will increased.

[BobK71]

There is one tried and true way governments can integrate bitcoin and still keep their power, at least for a while: give bitcoin the historical role played by gold for centuries.

The idea is to peg paper currency to bitcoin (or some other blockchain system) in order to lend stability to the paper.  If the peg rate is high enough, the government will have a lot of power to push fiscal and monetary stimulus, and still have financial stability.

For this to be accepted by markets, the system would have to be basically the same as bitcoin (if it's not bitcoin itself) by offering transparency, anonymity and limited supply via open source software.  This would be the only system the markets would trust as a store of value.  Also, the government(s) would have to own a lot of coins to start with.  This last part is how they keep their power: they can sell coins to maintain the peg rate, so markets will keep trusting the paper they issue.  (Again, of course, they had better start with a very high paper currency price of coins.)

How do we know this?  This was basically the modern history of gold.

There are many scenarios under which governments would eventually have to back their currencies with gold or a cryptocurrency.  One of them is unfolding right now: the authorities have been trying but mainly failing to get growth and inflation off the ground since the crisis of 2008, and the reason is that their stimulus efforts are limited by the need to maintain trust in their fiat currencies.  (Think of how many times the Fed stopped and restarted QE.)  Trust in fiat money has been made fragile by the huge and unresolved debt overhang from past financial pollution and the crisis, so the authorities' hands were tied.

Looking at it another way, pegging at a high price basically amounts to cancelling a large portion of past debt, so governments can start afresh.  (With pegging, paper currency will revert to its original status as debt and not money.)  If it steps on creditors, that would be less important than the twin goals of stability and prosperity, plus of course the state and banks essentially keeping all their powers.

The government could do the same with gold itself (and it still might,) but that might be long-term problematic for confidence in paper, as the last peg price was $35/ounce.  Plus, with cryptocurrency the government can claim (misleadingly, but maybe believable to most people) that the purpose is to move on to a modern, technology based monetary platform.  Either gold or crypto, the government is not going to broadcast its intent until the last minute, for obvious reasons.

In order to own a lot of coins, the government might start a new blockchain and mine a lot of coins (perhaps split between countries) before making it public.  In this scenario they would have to allow bitcoin to become popular and valuable first.  Alternatively, they could publicize the new blockchain early, at a cheap floating price and without yet announcing a peg with national currencies, to build public confidence in that system.  Another possibility would be to wait for bitcoin's price to drop (perhaps after a joint regulatory offensive by major countries) and then buy up a lot of coins, and make bitcoin the anointed one.

There are a lot of possibilities, but the basic idea would be the same.

[tyz]

Governments have already started to monitor the rise of bitcoins, once bitcoin gets mainstream enough, the value and market cap of bitcoin will increase significantly, then will come the time when the world powers will see it as a major force of economy, some will resist it and some will adapt to it.

Thats true. That's why so many enterprises do research in the field of Bitcoin and related stuff. But, I think the breakthrough will not come that quick. Bitcoin is still hard to understand and to handle for 99,9% of the people.

[BitCoinNutJob]

Government regulations are so slowly implemented but they're trying to adopt to new financial markets. Everything is changing, regulations and taxes too. We need few years for mass adoption and official law in almost all countries.

[johnyj]

The concept of "backing" is what makes fiat money weak: Gold or bitcoin does not need anything to back it, because the value of the currency has already been paid when it is produced

Any form of "backed" currency is just a promise of redeeming the currency with backing assets, and that promise brings some risk of default. Since once the currency is in circulation, the redeem action seldom happens, that backing only need to be a oral promise, thus give those currency value out of nothing

[Dotakels]

Government regulations are so slowly implemented but they're trying to adopt to new financial markets. Everything is changing, regulations and taxes too. We need few years for mass adoption and official law in almost all countries.

We need to wait for their response because we cant forced them and we have no choice is to wait. But we can say that government is slow and failed government because they cant adapt immediately and there disrupting the traditional business.

[medUSA]

Governments are constantly faced with changes in the environment: Political, economical, legal, medical... The sharing community and Bitcoin is trivial compared to the worst problems they need to address.

How will local governments adapt to these new ways of doing business that are disrupting traditional business models? All we know now is that governments are a long way from even contemplating and accepting this new reality.

They choose to ignore the situation until it boils over

[BobK71]

The concept of "backing" is what makes fiat money weak: Gold or bitcoin does not need anything to back it, because the value of the currency has already been paid when it is produced

Any form of "backed" currency is just a promise of redeeming the currency with backing assets, and that promise brings some risk of default. Since once the currency is in circulation, the redeem action seldom happens, that backing only need to be a oral promise, thus give those currency value out of nothing

"Backed" paper currency has always failed because of the incentives for the elites to print while the peg is stable.  Essentially, there is no difference between purely fiat and "backed" paper, the latter just being a slower driver of financial pollution.  Looked at another way, the "backing" is just a device of financial repression, to prop up the value of paper by suppressing the value of the gold or bitcoin through selling from a big hoard when necessary.

Ultimately, it's all about the paper.  As long as we don't finally wake up, that is.

[freeyourmind]

Government regulations are so slowly implemented but they're trying to adopt to new financial markets. Everything is changing, regulations and taxes too. We need few years for mass adoption and official law in almost all countries.

I think taxation is the key to government adoption.  The government would need to have access to sales transactions for taxing sales for the consumer and income for the seller.  Once that is in place, then it can be more widely accepted by large consumer goods/services companies.

Smaller players who likely don't report any taxes from bitcoin wouldn't care, but there would be large legal implications for the larger companies.

[Dotakels]

Government regulations are so slowly implemented but they're trying to adopt to new financial markets. Everything is changing, regulations and taxes too. We need few years for mass adoption and official law in almost all countries.

I think taxation is the key to government adoption.  The government would need to have access to sales transactions for taxing sales for the consumer and income for the seller.  Once that is in place, then it can be more widely accepted by large consumer goods/services companies.

Smaller players who likely don't report any taxes from bitcoin wouldn't care, but there would be large legal implications for the larger companies.

Taxation is not the answer so that government can adapt. If they put a tax on bitcoin what will be happened to the bitcoin users? They only paid every week but its wage are small. I think government can adapt by joiningto the new business strategies or using a advanced technology so that they actions will not slowly.