Government banning bitcoin??

[TimJBenham]

they can make it illegal though

How would they enforce that exactly?

It wouldn't be difficult to do enough to discourage 95% of the poopulation from using bitcoin. Scare campaign plus a few high profile busts should be enough. Shit, some miners have been raided already because the cops thought they were running grow ops. If mining was illegal they should be able to catch a few.

[giantdragon]

They made online gambling illegal in the so called Land of the Free (which does not make sense at all, by the way). They can do the same with Bitcoin.

And a bunch of gambling sites still accepting U.S. players. This ban never be effective!

[solex]

I don't think any country is willing to embrace a money it can not collect taxes on. It would be financial suicide.

I keep hearing this, and it is wrong. Governments can invent and levy taxes even in a Bitcoin economy.

Taxes on electricity from the grid, mains water, land and buildings could be levied at a higher rate instead of retaining an income tax. Consider vehicle taxes. Anyone who wants to use a car on a public road has to tax it (in most countries). That tax could be raised 1000%. Taxes could still be levied on petroleum products. Oil majors would not be able to hide how much petrol and diesel was sold at the pump each year.
Governments could levy 100 BTC to renew a passport. There are many methods to extract money from the people. Bitcoin just changes the focus of taxation, and probably makes it far simpler, making obsolete great swathes of crap tax law.

[TimJBenham]

They made online gambling illegal in the so called Land of the Free (which does not make sense at all, by the way). They can do the same with Bitcoin.

And a bunch of gambling sites still accepting U.S. players. This ban never be effective!

I used to gamble semi-professionally. The ban had an enormous impact on US players and a substantial impact on the part of the industry that was US-facing. Few if any credible European books still accept US players and many "offshore" (caribbean)  books folded. The ones that survived are much less generous than they used to be. Goodbye bonus, hello $100 withdrawal fee.

The impact on the bitcoin price would be greater because the average gambler is more dedicated than the average bitcoiner. The current price is supported by the flood of money coming in from Joe Average who has heard about the spectacular price rise and wants a piece of the action. A ban will mean that flood stops.

[myrkul]

I don't think any country is willing to embrace a money it can not collect taxes on. It would be financial suicide.

I keep hearing this, and it is wrong. Governments can invent and levy taxes even in a Bitcoin economy.

It also makes avoiding those taxes by using black/gray markets dead simple.

[Frozenlock]

If all else fails, there's still taxes on land and buildings.

[myrkul]

If all else fails, there's still taxes on land and buildings.

True. But when it is impossible for them to freeze or seize your funds, flipping them the bird on property taxes is easier, too.

Not "easy," mind... just easier.

[solex]

I don't think any country is willing to embrace a money it can not collect taxes on. It would be financial suicide.

I keep hearing this, and it is wrong. Governments can invent and levy taxes even in a Bitcoin economy.

It also makes avoiding those taxes by using black/gray markets dead simple.

Think about it, that already exists. It is called cash. You can pay a plumber in cash (at a reduced rate) while he avoids declaring it. An easy win-win. But most people are not comfortable doing that all the time.

But more importantly there are essential services which are obtainable only through large companies or government departments. Electricity, for example. Unless your house is off-grid you will have to pay the electric co in bitcoin, which they will have to declare to government revenue inspectors. So, it is easy for government to levy a percentage tax on all electricity bills.

[giantdragon]

Taxes on electricity from the grid, mains water, land and buildings could be levied at a higher rate instead of retaining an income tax. Consider vehicle taxes. Anyone who wants to use a car on a public road has to tax it (in most countries). That tax could be raised 1000%. Taxes could still be levied on petroleum products. Oil majors would not be able to hide how much petrol and diesel was sold at the pump each year.
Governments could levy 100 BTC to renew a passport. There are many methods to extract money from the people. Bitcoin just changes the focus of taxation, and probably makes it far simpler, making obsolete great swathes of crap tax law.

You are right. BTW I already see the same approach in Latvia. Our govt have set insanely high income taxes (25% flat rate, almost no deductions, high social security tax resulting >50% of salary goes to the govt), which forced many people to work unofficially (receive salary in cash and don't pay taxes at all). To get funds in budget they introduce many new indirect taxes and raise existing which is almost impossible to evade (land, real estate, cars, fuel, even 21% tax on all cross-border parcels from online shops). Now they even plan to force all unemployed to pay compulsory fixed sum "healtcare tax" (govt think these people have unofficial job, however real unemployment in Latvia is more than 20%).

[myrkul]

But more importantly there are essential services which are obtainable only through large companies or government departments. Electricity, for example. Unless your house is off-grid you will have to pay the electric co in bitcoin, which they will have to declare to government revenue inspectors. So, it is easy for government to levy a percentage tax on all electricity bills.

That's what ya might call "incentive to innovate."

[manfred]

Think about it, that already exists. It is called cash. You can pay a plumber in cash (at a reduced rate) while he avoids declaring it. An easy win-win. But most people are not comfortable doing that all the time.

But more importantly there are essential services which are obtainable only through large companies or government departments. Electricity, for example. Unless your house is off-grid you will have to pay the electric co in bitcoin, which they will have to declare to government revenue inspectors. So, it is easy for government to levy a percentage tax on all electricity bills.

That is why government hate cash and love digital currency. cash is 100% anonymous, digital 100% traceable every single penny of it.
There is no question a state coin will come and u can pay taxes, go shopping, pay util bills....... and receive your pay with it too because it is the only gov. sanctioned legal tender. To what extent other currency's (btc,ltc...) are allowed to run in parallel is up to the individual country. trouble is every time u change back and forth u have exchange rate to worry about so the fast majority wont bother.
Scandinavian countries right now are looking for ways to outlaw cash, cryptos are a god sent aid in implementing this next step of total control.  

[ErisDiscordia]

If you haven't yet, you might enjoy reading this:
https://en.wikipedia.org/wiki/The_Diamond_Age

(btw, the word you're looking for is "phyle")

I made a post about Phyles and Bitcoin back in the newb-section but nobody cared. In any case, here it is:

https://bitcointalk.org/index.php?topic=153644.0

I think the combination of Phyles and Bitcoin is a really potent concept.

[mobodick]

This is a turning point in history and will be a wake up call. If one country decided to embrace Bitcoin and act as a backbone for the technology, it would be unstoppable and so would the country who chose to embrace it.

I don't think any country is willing to embrace a money it can not collect taxes on. It would be financial suicide.

Forget about taxes and centralized government, think about individual sovereignty and collective groups of like minded thinkers who care of nothing more than eliminating traditional forms of government. When I say a "country" I mean a collective group of people outside the box we call "our country", country is just the best way I could explain my point of view. it wouldn't take much for a group of people to scrap an old way of thinking and experiment with something new, especially if they are already in a state of chaos and disarray. The direction we are headed could easily lead to a virtual economy, government, and social structure. These are the building blocks for someone to declare independence from any traditional "country".

But these places already exist. These social experiments have been going on for decades if not longer. If you want your own island outside the box you could have it. Problem is, so far noone got it to actually work. I think these things usually break down because of social problems. Funny thing for groups of likeminded people, don't you think?

Also remember that there are no shops where you can buy computers or other electric devices outside of the box of countries.
So no virtual anything actually. Well, virtual computers, if you like. That is the consequence of living outside the box. Good luck.

I don't mean to sound offensive, but your still thinking inside the box, the box I am referring to is metaphorical without boundaries. I never said start my own country on my own island. I am talking about right in your back yard, your neighbors backyard, Africa, Russia, second life . I am merely implying that this is a seed that has been planted. Prudence, understanding, and an open mind is imperative. These are valid issues if decentralization continues in this direction.

I want a debate, I want a full out global discussion, lets get dirty here and quit pretending like nothing will change. Macro economics is an ever evolving beast and it just grew a third arm. I think a drawn out discussion is in order, not to mention full implementation of this technology on a global scale is inevitable. Pretending like it is not an issue or wont get to this point is a blatant lack of prudence and understanding of what is actually happening.

The following post shoots for the stars much like I am guilty of doing quite often. However, I think it is a valid concern and a large stick in the spokes that has yet to throw us off course (For lack of a better term). 

http://lifeboat.com/blog/2013/04/bitcoins-dystopian-future

I've been reading this page.

"For our first thought experiment, let’s imagine a world where distributed currencies like bitcoin have become wildly successful due to technological advances which make them easy to use and completely stable. In this world government-issued money is as good as dead."

This is a false premise because to get to the technological level he describes you would need a functional fiat economy to drive the technological developments.
Besides that, bitcoin is very expensive energy wise. If fiat fails most of our society will fail.
There will be no electricity, no computers in the shops, no high bandwidth internet etc. All of our fancy networked society will break down if fiat breks down.
Bitcoin would become lame in such a situation.
So this whole premise is irrelevant as it could not exist.

Basically his whole argument is that if too many people go into bitcoin it will crash fiat so you better get into bitcoin.
He is just trying to scare people with brainfarts.

If you dare, please explain to me how bitcoin could ever survive a breakage of fiat and its related services that are needed for bitcoin.
Where do you get the electricity from?
Where do you get the fat internet from to download the block chain?
Where do you get a computer from?
How could i use bitcoin to buy food when fiat has broken?
I mean, will mobile phones still work in a broken fiat economy? Would i be able to go to a store and buy food with bitcoin on my phone if fiat is dysfunctional?
And if not, then what use is bitcoin to me in asuch a situation?
Who will provide the fiat services to run bitcoin on when the fiat economy is broken?
The reality is that as soon as fiat realy breaks down our whole society will fail and there will be complete chaos.
There will be no electricity (unless you make your own)
There will be no food (unless you make your own)
There will be no technology (unless you make your own).
Noone will be so out of his mind to even think of bitcoin when society has failed.
Bitcoin would become meaningless in a world without fiat.

[xgf666]

they can make it illegal though

They can make local exchangers illegal to slow BTC but they can't make BTC illegal

[GigaCoin]

just like they will SWAT your home if you share childporn on P2P. Tor, Truecrypt and paranoia for everybody, yay. They can put you in jail for meeting someone to trade bitcoins for cash, just like trading stolen creditcards numbers for cash is illegal. They can monitor your bank account and convict you of money-laundering if you send money to an entity abroad connected to the bitcoin trade; just like you can't wire money into PLO's account. They can tap you phone and convict you upon mentioning a bitcoin transfer.

Child porn is considered unacceptable by 99.999999% of population, while Bitcoin, TOR, TrueCrypt and spirit of freedom at all is essential values for large part of population. If governments and corporations will pressure too hard, some people will resist physically, even risking with their lives! Very high probability that this prohibition could start civil war!

You'd be surprised just how much of a majority enjoy social conformity and the grass eating. Like someone else here said "most people couldn't care less if governments declare crypto currency illegal" . The vast majority will complain that prices are going up, that life is getting harder, but when you offer them a path to Liberty they reject it and would rather remain in the delusional comfort of the system.

[roalwe]

Can someone explain, in small, grampa-compatible words, why is bitcoin un-taxeable?

I mean, I am an old, possibly senile, Canadian, and maybe I am missing something big, but... I recieve payment to single-use addresses, but I pay my gas, my taxes, my food, and pretty much everything else in fiat, so I exchange btc > fiat (and since I want money to go to my bank account, I do that in my very own name)

Obviously, government can detect income at this point, and tax me (also possibly audit me because I have this very strange income structure going)

Even if I could buy stuff with BTC, if I want to stay below tax radar, I would only be able to buy small-time stuff, like groceries and occasional small items, because as soon as I buy something huge (like a house) with my undeclared BTC riches, tax folks can come down on me like a blivet, right ?

So... where does the "cannot be taxed" idea come from, again?

How is getting BTC different from getting small-denomination worn cash?

[myrkul]

Can someone explain, in small, grampa-compatible words, why is bitcoin un-taxeable?

Give me your bitcoins.

See, if it were dollars, I could just reach into your bank account or your mattress, or wherever you keep them, and take them. Can't do that with bitcoins.

Yes, taxes can be levied on BTC, you can even pay them. But it's voluntary.

That changes the whole game.

[Fiyasko]

Torrents are illegal, Have you seen how easily they got shutdown? Oh wait... They CANT shut them down without some extreme shit that'll come from SOPA/PIPA/ACTA/CISPA.

[giantdragon]

Like someone else here said "most people couldn't care less if governments declare crypto currency illegal" . The vast majority will complain that prices are going up, that life is getting harder, but when you offer them a path to Liberty they reject it and would rather remain in the delusional comfort of the system.

Most entrepreneurs will fight against this crypto ban because strong cryptography (SSL, VPN, disk encryption etc) is essential now for any business.

[ManBearPig]

As Bitcoin grows, it will surely become a political weapon. There's no reason to think every country would follow Canada or India. Couldn't you imagine ideologically opposed parts of the seeing value in something another rejects?

I'm not even sure that it can be effectively outlawed.