How will a legalized bitcoin work or look like

[donalfonso]

So I have been wondering what if a Government somewhere in the world wants to legalize bitcoin or any other crypto for that matter. How would it work.

First of all the government will be trying to legalize a means of exchange that it neither controls the demand, supply and creation. It can't even be used as a means of effecting economic change like other currencies can be used by controlling money supply and interest rates.
And if we are equating bitcoin to the possession of assets like gold or diamond. They cant even control bitcoin mining, like they issue licenses to mine gold or diamond
So is bitcoin being a legal tender even possible and how would it work.

[aloha99]

Bitcoin itself can't e legalized because there is no means to stop blockchain transactions. However, they can legalize bitcoin exchange to FIAT and vis versa

[jmlona]

So I have been wondering what if a Government somewhere in the world wants to legalize bitcoin or any other crypto for that matter. How would it work.

First of all the government will be trying to legalize a means of exchange that it neither controls the demand, supply and creation. It can't even be used as a means of effecting economic change like other currencies can be used by controlling money supply and interest rates.
And if we are equating bitcoin to the possession of assets like gold or diamond. They cant even control bitcoin mining, like they issue licenses to mine gold or diamond
So is bitcoin being a legal tender even possible and how would it work.

It's important that you are clear of the differences between being legal and being legal tender. Bitcoin is legal in the majority of countries but it is legal tender in none. Bitcoin to my mind will never become a legal tender due to its nature, you hinted at some of the issues such as that the money supply cannot be controlled and used to influence the economic outlook.

[stompix]

Bitcoin itself can't e legalized because there is no means to stop blockchain transactions. However, they can legalize bitcoin exchange to FIAT and vis versa

In Japan bitcoin is considered a legal method of payment, so, do your homework before posting stupid things.
Can you stop cash transactions? Then all governments should ban cash money by your logic.

So I have been wondering what if a Government somewhere in the world wants to legalize bitcoin or any other crypto for that matter. How would it work.

First of all the government will be trying to legalize a means of exchange that it neither controls the demand, supply and creation. It can't even be used as a means of effecting economic change like other currencies can be used by controlling money supply and interest rates.
And if we are equating bitcoin to the possession of assets like gold or diamond. They cant even control bitcoin mining, like they issue licenses to mine gold or diamond
So is bitcoin being a legal tender even possible and how would it work.

As I said above, it is possible and has been adopted in at least one G7 country.

Why do they have to control anything like mining or supply?
The government is not involved in any of this and people are free to use or not use it as they like just like gold, trading cards, stocks, antiquities, why would there be a need to control the flow of everything. As long as taxes are paid even if you pay in BTC nobody gives a damn, or at least nobody should.

[gentlemand]

As it stands now a firm grip on how the exchanges operate is more than enough to take care of most of it.

What'll be truly interesting is if and when it becomes a majority closed loop. There'll always be a need to interact with fiat, but if large swathes of the population spend most of their economic lives in crypto I don't really know how any government keeps a hand in with that.

[Sadnu]

It works as legalized by news that bitcoin is a scam and it is a great help to the unemployed. if you know bitcoin you will know how to earn it and look at how it works. Bitcoin is the first global, decentralized currency that allows you to send money from one person to another without involving a third party broker, such as a bank. You only need your computer to make transactions because Bitcoin is fundamentally software.

[Tankdestroyer]

So I have been wondering what if a Government somewhere in the world wants to legalize bitcoin or any other crypto for that matter. How would it work.

First of all the government will be trying to legalize a means of exchange that it neither controls the demand, supply and creation. It can't even be used as a means of effecting economic change like other currencies can be used by controlling money supply and interest rates.
And if we are equating bitcoin to the possession of assets like gold or diamond. They cant even control bitcoin mining, like they issue licenses to mine gold or diamond
So is bitcoin being a legal tender even possible and how would it work.

If you are looking to know how Bitcoin will look like if it is legalized by a country, just look at it's state at Japan. The government there doesn't give a dam about the demand, supply and creation of Bitcoin. They also don't give a damn on Bitcoin mining. They only regulate it and let their citizens pay their due tax for using btc. You shouldn't also ask how would it work because obviously, it is used also as an alternative payment method.

[Vladv26]

I dont understand what you mean by legalized because I dont remember bitcoin to be illegal. Probably you are talking about accepting bitcoin as an international payment method that you can use to pay everywhere but I dont think that will happen anytime soon because governments are not very interested in this and they are not going to have any advantages so they dont want to waste their time with bitcoin. Maybe in the future something will happen but there is a long way until then

[darkangel11]

It works as legalized by news that bitcoin is a scam and it is a great help to the unemployed. if you know bitcoin you will know how to earn it and look at how it works. Bitcoin is the first global, decentralized currency that allows you to send money from one person to another without involving a third party broker, such as a bank. You only need your computer to make transactions because Bitcoin is fundamentally software.

Ok great, you've told everyone what BTC is. What does this generic and semi grammatical answer have to do with the topic? And what is this first part? Are you saying that it's a scam, or that the news are saying it's a scam? Dafuk?

How will it work? Basically the same as cash works nowadays. You will be able to pay taxes with it, it will be recognized as an alternative payment method that you can use to fund whatever you need, like donate to anyone, receive as wage, manage books, buy and sell property with, pay debt, pay for court motions, fines, whatever you choose.

[DroidR17A]

The guys from AML Bitcoin supposedly have a solution to this, but unfortunately they've done a terrible job of managing their token sale and have just succeeded in p'ing off the community. Good idea in principle though. I fully expect to see more AML compliant coins/tokens coming out in the near future. If Uncle Sam can tax, regulate, and make sure there's no money laundering, it will achieve legal status.

[gantez]

So is bitcoin being a legal tender even possible and how would it work.

I would just narrow on the above. Legal tender is what is generally accepted by everyone. It is called legal because it has the backing of the law - so, we now know if bitcoin has got that status at the main time.

The other part as to how it will work... It will work in the way of bringing to bear, all the paraphernalia of legality, from legal tender to regulation and enforcement of tax payments .

[btcjoin14]

Bitcoin itself can't e legalized because there is no means to stop blockchain transactions. However, they can legalize bitcoin exchange to FIAT and vis versa

If Bitcoin was tied to the people that wanted the price of Bitcoin then it wouldn't be a good thing. It's better to keep Bitcoin the way that it is.

[senin]

In many countries, bitcoin is already legalized, and an example of this can be Japan, where such legalization was back in April last year. During this time, bitcoin began to accept for payment in thousands of outlets, it is freely exchanged and walks through the territory of this country. Recently there was information that in Japan introduced a tax on profits from the crypto currency, which is from 15 to 55 percent of the amount of profit, depending on the size of the profit. Over the past year, the country's gross income from using crypto currency increased by 0.3 percent.

[farhaan]

We could take Japan as an example in this concern as it has legalized bitcoin almost an year ago and still successfully managing.I don't understand why other countries confuse a lot about regulating bitcoin.

The only possible way for them is to either follow japan being lenient in legalizing bitcoin or to take a tough stand like china which is not a successful model.

[MakeMoneyBtc]

If governments would start to work with bitcoin they are surely going to take advantage of it and start applying taxes for people that use bitcoin. Probably they are going to create a big legalized by the government exchanger so that everyone can buy safer from there and they are going to put a 5-10% fee for exchanging you bitcoin into cash or buying bitcoins. Also they are going to check stores that accept bitcoin and take taxes from them. Basically what governments would do is to apply taxes everywhere they see bitcoin and thats obviously a very bad thing so it is better for governments to stay away from bitcoin

[monkeydominicorobin]

So I have been wondering what if a Government somewhere in the world wants to legalize bitcoin or any other crypto for that matter. How would it work.

First of all the government will be trying to legalize a means of exchange that it neither controls the demand, supply and creation. It can't even be used as a means of effecting economic change like other currencies can be used by controlling money supply and interest rates.
And if we are equating bitcoin to the possession of assets like gold or diamond. They cant even control bitcoin mining, like they issue licenses to mine gold or diamond
So is bitcoin being a legal tender even possible and how would it work.

Bitcoin is not meant to be governed. Bitcoin is freedom. Your concept of legalization is quite limited. Thinking that legalization will affect Bitcoin is an ignorant premise by itself. You don't even know the definition of legal tender.

[jmlona]

If governments would start to work with bitcoin they are surely going to take advantage of it and start applying taxes for people that use bitcoin. Probably they are going to create a big legalized by the government exchanger so that everyone can buy safer from there and they are going to put a 5-10% fee for exchanging you bitcoin into cash or buying bitcoins. Also they are going to check stores that accept bitcoin and take taxes from them. Basically what governments would do is to apply taxes everywhere they see bitcoin and thats obviously a very bad thing so it is better for governments to stay away from bitcoin

How is it any different to transactions that are conducted in FIAT. If you earn an income in FIAT, that is taxed. If you purchase something in FIAT, that is taxed.

What is it about cryptocurrencies that makes you feel it should be exempt from tax? Either all things should be exempt from tax or all things should be taxed, there should not be one rule for FIAT and another for crypto.

[Astrilian]

As it stands now a firm grip on how the exchanges operate is more than enough to take care of most of it.

What'll be truly interesting is if and when it becomes a majority closed loop. There'll always be a need to interact with fiat, but if large swathes of the population spend most of their economic lives in crypto I don't really know how any government keeps a hand in with that.

yes that will be very interesting to watch, we already see a lot of retailers and services adding Bitcoin as a currency and itwill certainly grow with an increasing rate as more customers will demand to pay in Bitcoins. Here is an article that lists a few larger retailers and services that added Bitcoin recently: https://www.lifewire.com/big-sites-that-accept-bitcoin-payments-3485965

But also small, day to day grocery shopping and thinks like coffee is going to be increasingly available to those who want to pay with a digital currency. There was a documentary where a guy in the US tried to live an entire week only using Bitcoin, he went through some trouble initially but eventually found enough shops where he could shop, even coffee. They could only sell him a minimum of 5 coffees as to cover transactions fees, so he had to buy for the film crew too.  

Another factor that could contribute to the "majority closed loop" are government office in like Switzerland and Denmark are officially accepting Bitcoins as a way to pay for your taxes. Denmark is even committed to become the first cashfree country in the world which also explains their zero tax policy for Bitcoin and gains from Trading Cryptocurrencies. These moves seem very counterintuitive as everyone believes governments would be afraid of loosing tax. However there seem to be more governments that have a progressive approach as they want to establish their country has a modern and high tech friendly environment to attract investors and businesses. I live in Ireland and the country is booming with the IT sector, the reason is the low tax for corporations that was implemented many years ago. Now this is paying of in terms of job creation and overall wealth.

[oddwh]

I dont understand what you mean by legalized because I dont remember bitcoin to be illegal.

Be careful with that, not legalized doesn't mean it's illegal, but it means it's not officialy supported by a country. That's with this confusion that some FUD news cread a panic crash recently (India "Ban").

A legalized bitcoin would mean it's officialy supported by the country, and for that, this country has to regulate the system. This would be done by doing a system where you declare your cryptocurrencies wallets, an official trusted exchanges list and some rules to follow. This would help for the mainstream adoption, but this would reduce our freedom.
Some stricts countries could make illegal the fact of owning private wallets, or owning anonymous currencies, or even using decentralized exchanges or not trusted.

We can avoid these rules as cryptocurrencies cannot be fully regulated but cashing out would be harder as we would have to justify from where our money is from.

[talkbitcoin]

bitcoin will still work the same whether some country like Bangladesh bans bitcoin or some other country like Japan adopts bitcoin. none of these will change anything about how bitcoin works.

however the only thing that it will change is the adoption rate which will become faster when a country adopts bitcoin like what happened in Japan. now there are lots of shops accepting bitcoin payments over there and have increased their revenue thanks to this and the fact that there are no taxes on bitcoin payments there.