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Author Topic: Why does the government hate bitcoin?  (Read 2563 times)
BIPBot
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October 24, 2018, 12:08:23 PM
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 #1

In order to understand why the government hates bitcoin we need to understand how money actually works

In the history of the United States, the US dollar has been built on the "silver standard" and the "gold standard,". This means that the value of a dollar was directly tied to the country's silver or gold reserves. This is true in case of all currencies be it the Indian Rupee or The Chinese yen. A more simplified version of understanding this would be that any money you possessed could directly be exchanged for its value in whatever material it was being backed by. This is known as a commodity currency which does not exist in the current economy.

As an example, Lets say that you own a paper currency worth $ 20. Now you can take that paper bill and exchange it for gold or any other material backing it up which had the same $ 20 value.

But in the current economy the world runs on fiat currencies whose value is derived from the government that backs it. Plain and simple, a US dollar has value as legal tender because the US government says it does. Though this system isn't perfect, it has served its purpose for many years.

The government loves fiat currency because it is centralized which means control is also centralized on the production and distribution of their respective fiat currencies via large central banks.

What this means for the banks
They can track the currency's location in bank accounts, dictate its movement, and collect taxes on every financial transaction that includes their currency. This also helps the governments to try and keep their economy healthy by adjusting the amount of money in circulation to try and stimulate Wall Street investors or avoid a financial crisis.

Now why is bitcoin made?

The basic ideology behind Bitcoin is to use a combination of public-key cryptography and peer-to-peer networking to create a virtual analogy of gold,
that is to say, a substance that is scarce and fungible. Satoshi Nakamoto devised did arrange a set of restrictions in order to ensure that bitcoin is not misued to
an extent like the fact that there can only ever be 21 Million bitcoins ever in existence and as time progresses it will become difficult to mine bitcoins.

Nakamoto in 2009 -
Quote
The root problem with conventional currency, is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the
history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves
of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts." In contrast,
everything in Nakamoto's system "is based on crypto proof rather than trust
.

But is it really that simple

It is not as simple as "The government likes to control and tax the movement of money" that makes them seem evil or greedy. The truth however is that if all currencies are decentralized, who would determines their value?
Bitcoin is only in the virtual form, how can we protect oourself from hackers or technical glitches? These questions are just some of the reasons why there is no telling what the future of cryptocurrencies holds, but it isn't wrong to say that Bitcoin and other cryptocurrencies will not be replacing government-backed fiat currencies any time soon. This however does not mean that there isn't a future where cryptocurrencies will be treated as regulated global currencies. Of course if we include the corrupt institutions, politicians then we can say the government is evil and greedy.

For bitcoin to become truly succesful it must be both a medium of exchange and a reasonably stable store of value.

 
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October 24, 2018, 12:13:21 PM
 #2

You lost me the second you mentioned the United States. The United States definitely in no way hates Bitcoin. The US is supportive of it, sure they aren't quick to adapt traditional regulations for crypto but they definitely have no hate towards it. Bitcoin and crypto has already had state Governments allowing use for public things (in Florida you can pay for certain taxes with it), they have already been very promising exchanges and businesses. We haven't had any real sign of defensiveness about crypto from the US.

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October 24, 2018, 12:24:08 PM
 #3

Federal governments have reason to be against bitcoin and decentralization. Digital gold would prevent governments from magically printing money while digging the debt hole. Their actions and transactions will also be transparent thanks to blockchain technology, and they're not always honest. News platforms will be decentralized, decode hidden agendas..Often involving bad propaganda from governments.

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October 24, 2018, 12:27:50 PM
 #4

You lost me the second you mentioned the United States. The United States definitely in no way hates Bitcoin. The US is supportive of it, sure they aren't quick to adapt traditional regulations for crypto but they definitely have no hate towards it. Bitcoin and crypto has already had state Governments allowing use for public things (in Florida you can pay for certain taxes with it), they have already been very promising exchanges and businesses. We haven't had any real sign of defensiveness about crypto from the US.

I won't disagree with you. But it is not regulated. I am not trying to say that only a regulated currency holds value but when a government backs up bitcoin that would make all the difference in the world. I do agree that there are signs of adoption but they aren't creating the impact required.
I may be wrong but I'm just trying to state my opinion.
After all this is a discussion.

If you think about it the Indian government thinks blockchain is good but bitcoin is evil. The RBI has gone as far as to bane bitcoin for any sort of means of exchange for any commodity or use in the markets.
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October 24, 2018, 12:28:59 PM
 #5

Federal governments have reason to be against bitcoin and decentralization. Digital gold would prevent governments from magically printing money while digging the debt hole. Their actions and transactions will also be transparent thanks to blockchain technology, and they're not always honest. News platforms will be decentralized, decode hidden agendas..Often involving bad propaganda from governments.


What makes you think that a digital gold would prevent a fiat? There's nothing that shows that even a massively used crypto would stop a fiat from being widely used or even still mainly used.

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October 24, 2018, 01:46:11 PM
 #6

maybe the government doesn't understand bitcoin, as in my country it's still not permitted / banned on bicoin, but many have played bitcoin in my country, except in some parts the government doesn't know what bitcoin is, and I'm sure sooner or later they will know what it's bitcoin. and immediately permitted
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October 24, 2018, 02:24:44 PM
 #7

Bitcoin and altcoin are very attractive, the government has not accepted because they do not have the appropriate management plan, it should take some time to Bicoin and altcoin system.
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October 24, 2018, 02:33:21 PM
 #8

Federal governments have reason to be against bitcoin and decentralization. Digital gold would prevent governments from magically printing money while digging the debt hole. Their actions and transactions will also be transparent thanks to blockchain technology, and they're not always honest. News platforms will be decentralized, decode hidden agendas..Often involving bad propaganda from governments.



Are you saying that if one nation is implementing the Federal government there is a big chances that they won't accept bitcoin or crytpo to their own territory? As far as I know dude the reason why the government hate it so much, it is because obviously Bitcoin was decentralized while the government is centralize based system concepts.
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October 24, 2018, 02:41:44 PM
 #9

Bitcoin and altcoin are very attractive, the government has not accepted because they do not have the appropriate management plan, it should take some time to Bicoin and altcoin system.

I agree. Government is not yet ready to take charge on what is going on to the cryptocurrency market. But then they lacks on realizing the potential the bitcoin can give to the world. The government may also be threatened to the things the bitcoin can manage to do.
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October 24, 2018, 02:43:27 PM
 #10

It is not a matter of governments hate or do not hate bitcoin. It is a matter of the bitcoin itself. How could governments trust bitcoin fully if bitcoin has some significant technical issues that still need to be resolved. One of them is the security of bitcoin. We had heard a lot of hacked exchanges. Remember these coins are virtual and digital. Only if important issues will be resolved, maybe we can see fu support from the governments.

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October 24, 2018, 02:52:33 PM
 #11

Honesty, accountability and lack of control. A lot of Politicians are scared of transparency. They can't tax crypto either which probably scares them a fair bit
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October 24, 2018, 02:55:17 PM
 #12

This topic has been negotiated hundreds of times. Governments hate bitcoin because they cannot control cash flow. Many companies launder funds through Bitcoin
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October 24, 2018, 02:55:34 PM
 #13

In order to understand why the government hates bitcoin we need to understand how money actually works

In the history of the United States, the US dollar has been built on the "silver standard" and the "gold standard,". This means that the value of a dollar was directly tied to the country's silver or gold reserves. This is true in case of all currencies be it the Indian Rupee or The Chinese yen. A more simplified version of understanding this would be that any money you possessed could directly be exchanged for its value in whatever material it was being backed by. This is known as a commodity currency which does not exist in the current economy.

As an example, Lets say that you own a paper currency worth $ 20. Now you can take that paper bill and exchange it for gold or any other material backing it up which had the same $ 20 value.

But in the current economy the world runs on fiat currencies whose value is derived from the government that backs it. Plain and simple, a US dollar has value as legal tender because the US government says it does. Though this system isn't perfect, it has served its purpose for many years.

The government loves fiat currency because it is centralized which means control is also centralized on the production and distribution of their respective fiat currencies via large central banks.

What this means for the banks
They can track the currency's location in bank accounts, dictate its movement, and collect taxes on every financial transaction that includes their currency. This also helps the governments to try and keep their economy healthy by adjusting the amount of money in circulation to try and stimulate Wall Street investors or avoid a financial crisis.

Now why is bitcoin made?

The basic ideology behind Bitcoin is to use a combination of public-key cryptography and peer-to-peer networking to create a virtual analogy of gold,
that is to say, a substance that is scarce and fungible. Satoshi Nakamoto devised did arrange a set of restrictions in order to ensure that bitcoin is not misued to
an extent like the fact that there can only ever be 21 Million bitcoins ever in existence and as time progresses it will become difficult to mine bitcoins.

Nakamoto in 2009 -
Quote
The root problem with conventional currency, is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the
history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves
of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts." In contrast,
everything in Nakamoto's system "is based on crypto proof rather than trust
.

But is it really that simple

It is not as simple as "The government likes to control and tax the movement of money" that makes them seem evil or greedy. The truth however is that if all currencies are decentralized, who would determines their value?
Bitcoin is only in the virtual form, how can we protect oourself from hackers or technical glitches? These questions are just some of the reasons why there is no telling what the future of cryptocurrencies holds, but it isn't wrong to say that Bitcoin and other cryptocurrencies will not be replacing government-backed fiat currencies any time soon. This however does not mean that there isn't a future where cryptocurrencies will be treated as regulated global currencies. Of course if we include the corrupt institutions, politicians then we can say the government is evil and greedy.

For bitcoin to become truly succesful it must be both a medium of exchange and a reasonably stable store of value.

 
One possible reason is that governments hate Bitcoin because they might be the one who created it maybe to be used for funding secret intelligence agencies and they know what it brings to the fiat money when everybody knows it's main purpose but that is just a speculation. One thing is that governments are afraid if Bitcoin will dominate and eliminate fiat money as people nowadays started to adopt and choose a decentralized asset than having centralized one like fiat.
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October 24, 2018, 02:59:38 PM
 #14

You keep thinking that your government is managing the country and the development of the rules and the financial sector are banks. Since government banks will regulate the flow of money in a country, the bank is where transactions and costs are paid. Bitcoin is very modern and Blockchain technology saves a lot in the transaction of convenience if Bitcoin to develop too government will be difficult to manage cash flow and banks will become should be useless
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October 24, 2018, 03:09:05 PM
 #15

I think it has more to do with CONTROL..... When Crypto is mass adopted the US, for example, can't just print money anymore.  
Whatever they can't stop the future no matter how bad they wish too.

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October 24, 2018, 03:21:45 PM
 #16

They simply don't have power over bitcoin, that's why they hate it. They 'like to control and tax the movement of money' together with the banks, and because of that the emergence of bitcoin seems to be defeating their agenda. People can take their money and assets in bitcoin and the governments can't do something about it. This diminishes their control over people who wanted to deviate from their state-issued currency and just hoard their money somewhere else. To combat this, regulations are created to possibly 'limit' the amount of people taking their interest towards the said crypto (see India for example.)

At the end of the day, the government simply wants to establish their control over their land, and to do this, the gold standard was ditched, introduced fiat currency and made their citizens use the said money to ensure that everything is within their power. Money easily controls the mind of people, and the government have done this perfectly on the introduction of the fiat system and their crazy taxation system.

 
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October 24, 2018, 03:31:59 PM
 #17

there are many reasons why the government hates bitcoin, according to my version:
1. the presence of bitcoin can threaten the existence of local currencies, and can damage the financial system.
2. Sometimes, bitcoin used for black market transactions.
3. Bitcoin can be used for money laundering
4. bitcoin is anonymous, so it will be difficult to track.
5. Bitcoin transactions are tax free.

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October 24, 2018, 03:46:08 PM
 #18

there are many reasons why the government hates bitcoin, according to my version:
1. the presence of bitcoin can threaten the existence of local currencies, and can damage the financial system.
2. Sometimes, bitcoin used for black market transactions.
3. Bitcoin can be used for money laundering
4. bitcoin is anonymous, so it will be difficult to track.
5. Bitcoin transactions are tax free.
In fact, once these problems are resolved, Bitcoin will receive a green light. The main problem is anonymity! As only Bitcoin owners come out of the shadows, governments will accept Bitcoin as an alternative currency, which in the future will spread along with fiat.
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October 24, 2018, 04:17:35 PM
 #19

Government hate bitcoin mainly because they can not control it. Bitcoin decentralised nature is one of the biggest reasons behind this topic. Many government doesn't wants something in their country in which they have no control. According to some countries bitcoin affects their country economy by its volatile nature. And also affects the country economy by affect their bank profits and national currency. Bitcoin user does not pay tax and this thing also affects an country economy.
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October 24, 2018, 04:31:58 PM
Last edit: October 24, 2018, 07:16:26 PM by burky156
 #20

I think the feeling is not the hate, it is fear. The goverments and the bank doesn't know how to act against the cryptocurrency.. That's why they act weird like this. I belive that the goverments will find new taxing system for cryptos and all the problems would solve that time.

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