[2017-10-23] When Governments Get Intrusive, Bitcoin Provides Way Out

[Terraformer]

Governments across the world are using technology and banks to keep an eye on their citizens. Decentralized currencies like Bitcoin may be the only way out for people who want to maintain their privacy.

Europe and MiFid

The European Union's Market in Financial Instruments Directives (MiFiD) are set to be implemented from January 2018. Customers who transact in securities will now have to provide their passport numbers to every platform they register on.

Exchanges are transitioning to MiFiD-ready platforms and have started collection of data. If you do not provide your passport number and other personal data, exchanges may block your transactions. As far as Know-Your-Customer norms are concerned, no data is considered private.

US tracks citizens worldwide

The US, through the enactment of Foreign Account Tax Compliance Act (FATCA), tracks the accounts of its citizens worldwide. US citizens, whether resident or not, have information such as their social security numbers and total assets collected by banks and submitted to the IRS. The US government twists the arms of foreign banks to ensure compliance. This is done by threatening non-compliant banks with a withholding penalty on their US transactions.

The IRS is even trying to use tools like Chainalysis to track down Bitcoin transactions. There is no escaping the long arm of Uncle Sam, except by renouncing your citizenship, which some wealthy Americans have done.

India and Aadhar

The Government of India seems to be pushing forward with its aim to make Aadhar ubiquitous. The Aadhar card, which involves the collection of biometrics like fingerprints and iris scans, has been made compulsory for everything from receiving subsidies to filing income tax returns. In its new push, the government has also ordered the linking of bank accounts and mobile numbers to your unique Aadhar number.

Its motto is one billion, one billion, one billion - a billion bank accounts linked to a billion mobile numbers linked to a billion Aadhar numbers. Privacy? Forget about it, especially when it comes to money. Demonetization is not the only assault by the Indian government on people's' rights.

Nothing to hide?

The attitude of governments when questioned about the need for citizens' privacy is that only criminals need to hide things from the government. Various organizations have taken the issue of privacy to courts and are fighting a battle to safeguard the rights of citizens, but governments are nonetheless chipping away at citizens' privacy. Thankfully, Bitcoin is founded on the core premise that transactions cannot be censored in any way. If Alice wants to send some of her Bitcoins to Bob, she will be able to do that irrespective of what the government thinks and wants her to do.

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[iamTom123]

Government is all about control and providing the kind of platforms on which people can work and do business with. When you take away that kind of control, there would always be a struggle and that is the kind of skirmishes we are seeing now. While the government is well aware that they could not technically kill Bitcoin except if they kill the whole of the internet which is kinda impossible, they can instead regulate or outright ban the trading of cryptocurrency which in the case of China crippled cryptocurrency activities within the country. 

We are still in the early stage of the adoption of cryptocurrency and so it just normal that some (if not many) people in the government may not have the full grasp of the whole thing that can lead to policy changes not really appropriate because they can be infringing on the right of the people for self-determination and privacy.

In the coming months and years, we would know how things can be shaping up for this fight between the governments and cryptocurrency...how many of them would adopt the revolution just like Japan or try to fight the changes just like what China did.

[endlasuresh]

You have written very well for INDIA as I am too from INDIA. Our Govt is too bad for corruption and they release scams from jail too, only the poor people have to pay all those taxes.
In the last  PM Modi made all faulty things and even he raised GST for 18% on Industries that would lead to close. So far the people here struggles for getting money since everything is too costly.

This decentralization will keep them far away, but they may ban in future because of not getting Taxes. This Bitcoin is newly launched so well we have to wait for another year because now Bitcoin users had increased.

Using Bitcoin or other Crypto currency is easy to exempt from taxes.

[Qartersa]

This is interesting. Imagine governments tracking citizens, non-citizens, residents and non-residents alike? While it interests me, it scares me a bit more. It is like living in the comfort of our homes while having a CCTV attached to our houses. If these were verified as it appears to be, then there is no real freedom in this day and age. Freedom has become obsolete because of technology.

... And there comes Bitcoins. Its anonymity is the haven of many. They earn out of it anonymously. They are free online. There, it seems, it is only online where there is real freedom.

But of course, we all know that people can easily be traced online too - even in the world of Bitcoins.  Let us await for that time to come.
 

[Gotottack]

Government is all about control and providing the kind of platforms on which people can work and do business with. When you take away that kind of control, there would always be a struggle and that is the kind of skirmishes we are seeing now. While the government is well aware that they could not technically kill Bitcoin except if they kill the whole of the internet which is kinda impossible, they can instead regulate or outright ban the trading of cryptocurrency which in the case of China crippled cryptocurrency activities within the country. 

We are still in the early stage of the adoption of cryptocurrency and so it just normal that some (if not many) people in the government may not have the full grasp of the whole thing that can lead to policy changes not really appropriate because they can be infringing on the right of the people for self-determination and privacy.

In the coming months and years, we would know how things can be shaping up for this fight between the governments and cryptocurrency...how many of them would adopt the revolution just like Japan or try to fight the changes just like what China did.

I totally agree. There are truly struggles against governments worldwide when you introduce something that is peculiar, not at par with the norms, and are irregular in the sense that a certain government has no regulation about its existence. We can call it sui generis. This situation supports change yet the government concerned has not foreseen such development. Or even when foreseen, it came too drastically that legislators can find it hard to cope up with times. 

[aso118]

This is the reason why Jamie Dimnon believes that governments will get together to kill Bitcoin. Governments like to have control. Bitcoin provides control back to the common man.

[richardsNY]

This is the reason why Jamie Dimnon believes that governments will get together to kill Bitcoin. Governments like to have control. Bitcoin provides control back to the common man.

Governments know that they can't get rid of Bitcoin, so instead of attempting to shut it down, kill it, or however you like to call it, they will do everything they can to regulate this market firmly. That's a way for them to at least keep somewhat control, but then without wasting any previous time on trying to get rid of something that can't be put to a stop. For that reason I strongly believe that we'll be facing even more regulations in the coming years, but then far stricter than is the case right now. Mark my words -- one of these regulations will be that exchanges will have to 'snitch' on their users by handing all information to the government.