Bitcoin and bad scenarios

[Tyrantt]

Everyone's talking about bitcoin being godlike and all good, but is there some downside to it, excluding the funding of terrorism and whatnot, but as the deisik said:

Though in a somewhat different context. Just earlier today I explained why Bitcoin can be used as an economic weapon of mass destruction. Since that explanation was made in another language, I think I can repeat it here. Countries with rogue or just incompetent governments may fall victim to a Bitcoin "attack", so to speak. In these countries population heavily suffers from constant currency devaluations (e.g. Zimbabwe in the past or Venezuela right now), so with Bitcoin they can completely abandon their low paid jobs and make a living entirely off Bitcoin. From an economic point of view, that would work as a reversed inflation tax. With a direct inflation tax, it is the population that suffers most from currency devaluation, but when we reverse this tax, it is the government that now gets hit by it. Thus Bitcoin can be used by powerful nations (say, the US) to ruin weak governments from inside entirely via economic measures without violence or blood (unless authorities start prosecuting people for using Bitcoin, of course)

Some scenarios like this, where bitcoin can destroy one's economy or something similar. Theories.

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[HeRetiK]

Countries with rogue or just incompetent governments may fall victim to a Bitcoin "attack", so to speak. In these countries population heavily suffers from constant currency devaluations (e.g. Zimbabwe in the past or Venezuela right now), so with Bitcoin they can completely abandon their low paid jobs and make a living entirely off Bitcoin. From an economic point of view, that would work as a reversed inflation tax. With a direct inflation tax, it is the population that suffers most from currency devaluation, but when we reverse this tax, it is the government that now gets hit by it.

That's actually one of the positive use cases of Bitcoin. Hedge against inflation of your local fiat currency. Bad monetary policies ruin currencies all on their own, no need for Bitcoin on that.

[Lampaster]

This happens with all currencies. For this reason governments will never accept bitcoin. On the other hand bitcoin is the salvation for people. But you will agree that bitcoin will not help you in a country like Venezuela. If the economy is the fact you simply will not be what to buy and where to spend their money.

[bitbunnny]

Everything has the good and bad sides, so does the Bitcoin too. Yes, it's used for ransomes, criminal activities, financing terrorism but so are the fiat currencies too. And it's been spoken about this before, no one is denying that bad things happen with Bitcoins too. But that doesn't make it bad.

[Mometaskers]

Given the choice between the government or the people suffering during an economic attack, then better the government bear the brunt of it. Besides, the government would still be functioning if the people merely use bitcoins for earning money. I doubt it would be that easy for a country to go to 100% bitcoin use and the money citizens are earning would fuel consumption.

It would also have an effect on the attacker, remember how Taliban backfired on the US? A country going full bitcoin would attract the attention and fascination of people, which could lead to a wave of bitcoin adoption, eventually threatening the attacking country as well.

[VC George]

Since people in most countries can exchange Bitcoin for their country's fiat and use it to shop & pay for bills what's the difference? This only helps people bring more money to their countries thus raise their living standards and expands their career/job opportunities.

[Icculus.]

A run on a currency to bitcoin sounds like a great scenario. In a free market every entity needs to prove they are worthy of  investment and attention from the market.

And in the end, is it bitcoin that's bad or is it people that are bad?

[pixie85]

The funding of terrorism, drugs and whatever illegal activities always happened and always will happen and this totally independent of bitcoin.

A downside could be that a country prohibit the use of bitcoin.

It doesn't mean people won't use it if it's prohibited. The USA prohibited drinking alcohol and it didn't work out. Then they prohibited marihuana and it didn't work out either. Drug market is booming thanks to illegality.

[Rahar02]

Countries with rogue or just incompetent governments may fall victim to a Bitcoin "attack", so to speak. In these countries population heavily suffers from constant currency devaluations (e.g. Zimbabwe in the past or Venezuela right now), so with Bitcoin they can completely abandon their low paid jobs and make a living entirely off Bitcoin. From an economic point of view, that would work as a reversed inflation tax. With a direct inflation tax, it is the population that suffers most from currency devaluation, but when we reverse this tax, it is the government that now gets hit by it.

That's actually one of the positive use cases of Bitcoin. Hedge against inflation of your local fiat currency. Bad monetary policies ruin currencies all on their own, no need for Bitcoin on that.

Indeed, it's more likely as an advantage for bitcoiners and citizens who lives in countries with financial problems. Make their living entirely off bitcoin maybe harder to do than just say it due to bitcoin scarcity and high costly to get it especially after bitcoin reach higher price such as $10,000.

We understand, some people could use bitcoin for illegal activities such as terrorist financing, buy illegal drugs or money laundering, that's why govs have to regulate bitcoin and exchanges as the entrance to convert bitcoin into cash.

[mrcash02]

Thus Bitcoin can be used by powerful nations (say, the US) to ruin weak governments from inside entirely via economic measures without violence or blood (unless authorities start prosecuting people for using Bitcoin, of course)

[/quote]

It smells only vitimization for me. There is always someone taxing the USA as a villain while the poor countries are victims. If the USA is rich it's because they worked hard in the past to build their country, if the poor countries are in precarious situations for a long time already it's because their own people. So, I don't think that is a negative impact that Bitcoin can generate.

I can't even imagine how powerful countries could ruin other countries via Bitcoin.

[HeRetiK]

Indeed, it's more likely as an advantage for bitcoiners and citizens who lives in countries with financial problems. Make their living entirely off bitcoin maybe harder to do than just say it due to bitcoin scarcity and high costly to get it especially after bitcoin reach higher price such as $10,000.

We understand, some people could use bitcoin for illegal activities such as terrorist financing, buy illegal drugs or money laundering, that's why govs have to regulate bitcoin and exchanges as the entrance to convert bitcoin into cash.

The Bitcoin price itself is not so much of a problem due to divisibility and hopefully lower volatility once prices such as USD 10.000,- are reached. The high cost factor to actually get your hand on Bitcoin in some countries may be a problem however, that's true.

Nonetheless I daresay that most illegal financing still happens with plain old cash and "clean" bank accounts and probably will so for the foreseeable future.But that's just an educated guess.

[KennyR]

As if a coin has two sides, each and everything has got two side. The good side is appreciated and accepted by the one who understands it and the bad side is prioritized by users who always need to be on the safe side without complications. So depending on the user the good and bad of bitcoin varies. On recent days the bad thing happened with bitcoin is the security issue. More than 300btc got stolen from an exchange.

[Windpower]

Everyone's talking about bitcoin being godlike and all good, but is there some downside to it, excluding the funding of terrorism and whatnot, but as the deisik said:

Though in a somewhat different context. Just earlier today I explained why Bitcoin can be used as an economic weapon of mass destruction. Since that explanation was made in another language, I think I can repeat it here. Countries with rogue or just incompetent governments may fall victim to a Bitcoin "attack", so to speak. In these countries population heavily suffers from constant currency devaluations (e.g. Zimbabwe in the past or Venezuela right now), so with Bitcoin they can completely abandon their low paid jobs and make a living entirely off Bitcoin. From an economic point of view, that would work as a reversed inflation tax. With a direct inflation tax, it is the population that suffers most from currency devaluation, but when we reverse this tax, it is the government that now gets hit by it. Thus Bitcoin can be used by powerful nations (say, the US) to ruin weak governments from inside entirely via economic measures without violence or blood (unless authorities start prosecuting people for using Bitcoin, of course)

Some scenarios like this, where bitcoin can destroy one's economy or something similar. Theories.

Why would the US, or any "powerful nation" for that matter, want to destroy weaker governments? They would just be seen as bullies by other countries and that would basically put a target on their back. Also, what would they gain from doing that? They would have to spend a lot of time and money to completely destroy a government, it is not as easy as just pressing a button. I don't understand how the first part of the paragraph is the bad side of Bitcoin. I think it is great that people from poorer countries are getting into Bitcoin and earning a living off it. If that is a way they can provide for their family and make sure that their kids don't go hungry at night, then so be it. If their government suffers, it is their own fault. The governments of 3rd world countries are always so corrupt, not to stereotype, and can't help out their citizens. It is the governments fault that it's people have to resort to Bitcoin just to survive. I live in Australia so my currency is pretty weak against the American dollar so I like to keep some of my assets in Bitcoin. This way I don't get affected too much by the devaluation of my money. Even though the devaluation is small, there is still money being lost that doesn't need to be.

[Teraboy]

The funding of terrorism, drugs and whatever illegal activities always happened and always will happen and this totally independent of bitcoin.

A downside could be that a country prohibit the use of bitcoin.

It doesn't mean people won't use it if it's prohibited. The USA prohibited drinking alcohol and it didn't work out. Then they prohibited marihuana and it didn't work out either. Drug market is booming thanks to illegality.

Because the main actor is the human itself. The goverment just try to prevent the civilians to do something is include in the bad act. but remember the human has the brain. There is no reason for any parties to prohibited all of the things.

[ActiveP]

The premise of this theory is wrong. How is it even possible for an entire country to abandon their jobs and focus on bitcoins? What will happen to agriculture, construction, banking etc all very important to their survival?

In a country like Zimbabwe it is highly unlikely because of lack of electricity. Urban cities have outages too. The internet infrastructure isn't there, and where will the poor people in rural areas find the funds to buy smart phones or computers they cannot even power?

[Kronos21]

The premise of this theory is wrong. How is it even possible for an entire country to abandon their jobs and focus on bitcoins? What will happen to agriculture, construction, banking etc all very important to their survival?

In a country like Zimbabwe it is highly unlikely because of lack of electricity. Urban cities have outages too. The internet infrastructure isn't there, and where will the poor people in rural areas find the funds to buy smart phones or computers they cannot even power?

Your arguments are really convincing, but you did not mention the fact that in order to speak about the circulation of bitcoin as a currency need to have it all. For example, if the food retailers won't accept bitcoin because they're used to Fiat that will eat the users of bitcoins.The economy of any country cannot work with two currencies.

[skinomanl]

Any currency can be used for bad purposes, but bitcoin has a bit more advantage due to anonymity. This is not an excuse to ban it or stop using it, because a lot of people just earn money from it or do charity work.

[azguard]

The premise of this theory is wrong. How is it even possible for an entire country to abandon their jobs and focus on bitcoins? What will happen to agriculture, construction, banking etc all very important to their survival?

In a country like Zimbabwe it is highly unlikely because of lack of electricity. Urban cities have outages too. The internet infrastructure isn't there, and where will the poor people in rural areas find the funds to buy smart phones or computers they cannot even power?

This is something that wont be in motion for very long time. Japan tested first before they fully accepting it last month. So you need lots of preparations and lot of background work for this to be in motion at all. For everything in this they will always be good and bad point of view. Its normal that some accept it other dont that how thing work in real life.

[Oilacris]

Everyone's talking about bitcoin being godlike and all good, but is there some downside to it, excluding the funding of terrorism and whatnot, but as the deisik said:

Though in a somewhat different context. Just earlier today I explained why Bitcoin can be used as an economic weapon of mass destruction. Since that explanation was made in another language, I think I can repeat it here. Countries with rogue or just incompetent governments may fall victim to a Bitcoin "attack", so to speak. In these countries population heavily suffers from constant currency devaluations (e.g. Zimbabwe in the past or Venezuela right now), so with Bitcoin they can completely abandon their low paid jobs and make a living entirely off Bitcoin. From an economic point of view, that would work as a reversed inflation tax. With a direct inflation tax, it is the population that suffers most from currency devaluation, but when we reverse this tax, it is the government that now gets hit by it. Thus Bitcoin can be used by powerful nations (say, the US) to ruin weak governments from inside entirely via economic measures without violence or blood (unless authorities start prosecuting people for using Bitcoin, of course)

Some scenarios like this, where bitcoin can destroy one's economy or something similar. Theories.

Why would the US, or any "powerful nation" for that matter, want to destroy weaker governments? They would just be seen as bullies by other countries and that would basically put a target on their back. Also, what would they gain from doing that? They would have to spend a lot of time and money to completely destroy a government, it is not as easy as just pressing a button. I don't understand how the first part of the paragraph is the bad side of Bitcoin. I think it is great that people from poorer countries are getting into Bitcoin and earning a living off it. If that is a way they can provide for their family and make sure that their kids don't go hungry at night, then so be it. If their government suffers, it is their own fault. The governments of 3rd world countries are always so corrupt, not to stereotype, and can't help out their citizens. It is the governments fault that it's people have to resort to Bitcoin just to survive. I live in Australia so my currency is pretty weak against the American dollar so I like to keep some of my assets in Bitcoin. This way I don't get affected too much by the devaluation of my money. Even though the devaluation is small, there is still money being lost that doesn't need to be.

Would like to say the same thing on which why would a powerful nation would tend to destroy weaker ones since they know already that they are more powerful than them and yes it acts like a bully  and theres no point on destroy weaker governments unless if its their mortal enemy then it would be possible. There are lots of things which bitcoin can really be used too as long you do have the power and the money to do it but it wont be simple as we think.

[hatshepsut93]

Everyone's talking about bitcoin being godlike and all good, but is there some downside to it, excluding the funding of terrorism and whatnot, but as the deisik said:

Though in a somewhat different context. Just earlier today I explained why Bitcoin can be used as an economic weapon of mass destruction. Since that explanation was made in another language, I think I can repeat it here. Countries with rogue or just incompetent governments may fall victim to a Bitcoin "attack", so to speak. In these countries population heavily suffers from constant currency devaluations (e.g. Zimbabwe in the past or Venezuela right now), so with Bitcoin they can completely abandon their low paid jobs and make a living entirely off Bitcoin. From an economic point of view, that would work as a reversed inflation tax. With a direct inflation tax, it is the population that suffers most from currency devaluation, but when we reverse this tax, it is the government that now gets hit by it. Thus Bitcoin can be used by powerful nations (say, the US) to ruin weak governments from inside entirely via economic measures without violence or blood (unless authorities start prosecuting people for using Bitcoin, of course)

Some scenarios like this, where bitcoin can destroy one's economy or something similar. Theories.

Currently people who live off Bitcoin still have to exchange it for their local currency, and they still pay taxes in a form of value-added tax if it's present in their country. So, a government which is "attacked" by Bitcoin can simply find a way to tax it. Of course people might start using Bitcoin directly to avoid taxation, but it's not much different from cash and current tax evasion practices, so I don't see any radical differences that can make Bitcoin a "weapon of mass destruction".