What Happens After Widespread Crackdowns and Bans?

[ulhaq]

China just made statements cracking down on mining/trading, the US proposed new reporting requirements for transactions, the concern of crypto being used for tax evasion and illegal activities, the Bank of England governor recently said bitcoin has no value, European officials have often made negative statements, and there is always talk of bans in India. It was just reported on the news that Hong Kong is going to announce a ban for retail trading of cryptocurrency.

It's obvious that countries haven't considered bans in the past because they didn't consider bitcoin to be a threat, and it gets harder to ban the longer they wait because of the negative effects on their country, but the possibility remains. Also even if it were not banned, governments can monitor all activity because basically everyone uses centralized exchanges and the blockchain is public. They can tax it at whatever rate they decide to. It is just not conceivable that ordinary people are going to install applications on rooted phones to be able to continue to use bitcoin in the presence of a ban.

So what would the future trajectory of the world look like after that? I guess the price would fall precipitously, probably under 5000 USD or more likely 1000. Are people still going to want to hold it when the government can always come after them? I don't see how any small underground activity like paying your hairdresser in crypto, or even sending money to family/friends internationally is going to be able to sustain the viability of bitcoin, nor how the vast majority of the population can be convinced to use it in the face of government FUD.

One thing that does not seem to a be a concern is mining, because even if governments outlaw and can find ASICs and farms, the mining can always shift to use less electricity, fewer ASICs, etc.

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[Charles-Tim]

the concern of crypto being used for tax evasion and illegal activities

Is fiat not most used for tax evasion and illegal activities? It is.

the Bank of England governor recently said bitcoin has no value

It has no value? But turned people that have just little amount of money into millionaires and billionaires.

It's obvious that countries haven't considered bans in the past because they didn't consider bitcoin to be a threat

How is bitcoin a threat? Because fiat is more involved in illegal activities and more used by criminals.

Also even if it were not banned, governments can monitor all activity because basically everyone uses centralized exchanges and the blockchain is public

If people like, they can. But privacy can still be maintained. But most people are ignorant of privacy.

So what would the future trajectory of the world look like after that?

Bitcoin is a privacy coin and I will only make mention of it because it is the true decentralized currency. It is deflationary and not centrally controlled. The future is just bright as it is also deflationary with limited supply.

[DatKing]

I haven't heard anything about the US government's planning to crack down on trading/mining. China already is cracking down on mining and banned cryptocurrencies. As for the US, I've just heard that New York is thinking of preventing Bitcoin mining. And the government doesn't have any reason to ban cryptocurrencies. It is still regulating cryptocurrencies and already started to impose a tax on the earnings.

[Yogee]

What Governments like China are doing isn't something new and I bet most people who entered the market earlier aren't fazed by these crackdowns and bans. The early investors probably understands that all these "bans" will only lead to more regulations. Governments issue restrictions on exchanges and other businesses so they can prepare a new law and benefit as well.

...One thing that does not seem to a be a concern is mining, because even if governments outlaw and can find ASICs and farms, the mining can always shift to use less electricity, fewer ASICs, etc.

There was a post about a miner rejecting transactions from blacklisted addresses by government agencies. It doesn't look like a big deal now but that could become more problematic if more miners do the same thing.

[avikz]

Governments around the world is finding it difficult to control cryptocurrencies. Especially in third world countries where the population is high and the tendency of tax evasion is also high. So they are trying to discourage their citizens from cryptocurrencies. Even in my country, the banks have announced that they wouldn't be providing any services to the crypto exchanges. Their withdrawals suspended and payment gateways are not processing their payments.

I believe p2p market will start flourishing in this situation. But there's no going back for sure! When there is a will, there is a way!

[fiulpro]

China just made statements cracking down on mining/trading, the US proposed new reporting requirements for transactions, the concern of crypto being used for tax evasion and illegal activities, the Bank of England governor recently said bitcoin has no value, European officials have often made negative statements, and there is always talk of bans in India. It was just reported on the news that Hong Kong is going to announce a ban for retail trading of cryptocurrency.

It's obvious that countries haven't considered bans in the past because they didn't consider bitcoin to be a threat, and it gets harder to ban the longer they wait because of the negative effects on their country, but the possibility remains. Also even if it were not banned, governments can monitor all activity because basically everyone uses centralized exchanges and the blockchain is public. They can tax it at whatever rate they decide to. It is just not conceivable that ordinary people are going to install applications on rooted phones to be able to continue to use bitcoin in the presence of a ban.

So what would the future trajectory of the world look like after that? I guess the price would fall precipitously, probably under 5000 USD or more likely 1000. Are people still going to want to hold it when the government can always come after them? I don't see how any small underground activity like paying your hairdresser in crypto, or even sending money to family/friends internationally is going to be able to sustain the viability of bitcoin, nor how the vast majority of the population can be convinced to use it in the face of government FUD.

One thing that does not seem to a be a concern is mining, because even if governments outlaw and can find ASICs and farms, the mining can always shift to use less electricity, fewer ASICs, etc.

I think the market price would say more than enough about what you are thinking. This undoubtedly is something that we all are struggling through and thinking all day but at the same time after the big dump we did see that the price climbed up very fast. Yes it may not be equivalent to all time high but it's still holding.

China can ban Bitcoins they are trying to implement their own crypto which is nothing but fiat and people will be Forced to go that side.

At the same time Elon musk and other business men are doing what business men does ! They are trying to pull the price down so that they can buy low and sell high.

We see such problems every once in a while but I do think that you have to understand that it can go without any county of any government. Complete ban is not only impossible but not needed. There will always be people and countries supporting Bitcoins and government can't sentence thousands of millions of people to jail because they used Bitcoins in the same day, they won't have enough cells for that , haha so just keep using it and fight for it.

Ban is only implemented if the public decides to go with it.

[ulhaq]

the concern of crypto being used for tax evasion and illegal activities

Is fiat not most used for tax evasion and illegal activities? It is.

the Bank of England governor recently said bitcoin has no value

It has no value? But turned people that have just little amount of money into millionaires and billionaires.

It's obvious that countries haven't considered bans in the past because they didn't consider bitcoin to be a threat

How is bitcoin a threat? Because fiat is more involved in illegal activities and more used by criminals.

Also even if it were not banned, governments can monitor all activity because basically everyone uses centralized exchanges and the blockchain is public

If people like, they can. But privacy can still be maintained. But most people are ignorant of privacy.

So what would the future trajectory of the world look like after that?

Bitcoin is a privacy coin and I will only make mention of it because it is the true decentralized currency. It is deflationary and not centrally controlled. The future is just bright as it is also deflationary with limited supply.

Yes obviously, but I am posting the perspectives of government, not what's actually the case. How is bitcoin a privacy coin when the blockchain is public and 99% of transactions are not layer-2?

[ulhaq]

Governments around the world is finding it difficult to control cryptocurrencies. Especially in third world countries where the population is high and the tendency of tax evasion is also high. So they are trying to discourage their citizens from cryptocurrencies. Even in my country, the banks have announced that they wouldn't be providing any services to the crypto exchanges. Their withdrawals suspended and payment gateways are not processing their payments.

How are governments finding it difficult? It has been quite easy in China and the US, eg. Most exchanges have stopped accepting US customers and all the US exchanges are likely going to have to report transactions to the government (it was just proposed yesterday). They are also proposing new, higher taxes on cryptocurrency, which are higher than taxes in other areas like real estate.

[ulhaq]

We see such problems every once in a while but I do think that you have to understand that it can go without any county of any government. Complete ban is not only impossible but not needed. There will always be people and countries supporting Bitcoins and government can't sentence thousands of millions of people to jail because they used Bitcoins in the same day, they won't have enough cells for that , haha so just keep using it and fight for it.

Ban is only implemented if the public decides to go with it.

But is it really going to be thousands of millions of people or will it be a few hundred people in each country who are willing to root their phones to install apps, since all the wallet apps will be removed from the app stores? Haven't we seen how easy it is to control the public in every country?

[just_Alice]

I don't think the government in China will EVER ban mining. I think we're dealing with some double standards here.

Bitcoin is banned - but you can use our digital Yuan, it's the same! (no)

Cryptocurrency retail trading isn't allowed for ordinary people - but millionaires are free to use it any way they want (they're in power, the government wouldn't risk intervening in their affairs).

Using crypto is a serious law violation - but mining is ok (right, because it brings you a helluva lot of money!).

Obviously, all these regulations make no sense and I don't see any explanation for that, other than fear and desire to control the population.

[Mpamaegbu]

I guess the price would fall precipitously, probably under 5000 USD or more likely 1000.

It's really hilarious to ever think that will be possible. It didn't drop to $1000 during the last severe dump in 2018/19 when it was patronised mainly by individuals let alone now that institutions are fans of it. No matter whatever ban Bitcoin witnesses, it won't drop to that level.

Are people still going to want to hold it when the government can always come after them?

Bitcoin is a community coin. The people own it, not a few selected sect in government. Also, we have to factor in the sentiment now with the people that Bitcoin/cryptocurrency is their way of getting out of poverty. So, they tend to see anything against Bitcoin as something against their own progress. The government in this case, is tagged public enemy. People aren't even going to bleak not to continue to hodl Bitcoin.

[teosanru]

This is almost the 100th time that China has banned cryptocurrencies and almost the 10th time that the US has brought some regulations for cryptos. First of all, regulations coming in which would stop money laundering is a need of the hour of cryptocurrencies so there is no point criticizing the governments for this. I think the cases of fraud in cryptos would eventually fall if there is some regulation at least with regards to money laundering which means crypto could even lead to wider adoption. Talking about complete bans it's impossible to completely evade it from the system. When China did it most of the exchanges just moved out of China and continued their operations. People in China use VPNs to access their BTC wallets. Moreover, China too is trying to bring in its own coin which means that it'll be a game-changer in crypto technology.

[TravelMug]

This is also a cycle in bitcoin's history. When the price is going up and we are in a bull run, you will news coming from China, thus creating a domino effect in the price. But I would consider this another way to create FUD again. Even if they crackdown on bitcoin mining, those big farms have plan B on motion already since 2017. And this could open doors for other countries to mine bitcoin too, so the total manipulation could be put to an end.

Same with crypto regulations, not just US, but a lot of governing bodies as well initiating guidelines like FATF, https://www.fatf-gafi.org/documents/documents/virtual-currency-definitions-aml-cft-risk.html.

So I would say that no matter what countries do to bitcoin, it can't be stop.

[pooya87]

Yes obviously, but I am posting the perspectives of government, not what's actually the case. How is bitcoin a privacy coin when the blockchain is public and 99% of transactions are not layer-2?

Bitcoin is not an anonymous coin but it provides a very high level of privacy.
This means you can see all the transactions on the blockchain transparently but you have no way of knowing who each of the transactions belong to or where they are going to (unless of course the people intentionally or naively link it to their identity and purpose).

[ChrisPop]

Tighter regulations were expected. After all, Bitcoin could act as a threat to the viability and the usecase of government controlled fiat currencies. I'm really sold on the idea that a complete ban on Bitcoin at a large, worldwide scale won't happen. I think that would produce an even bigger tendency for "underground" transactions and tax evasion

Why would someone hold his/her wealth in a mean controlled by a central entity when there is a much better alternative?

- We could argue that governments provide safety and trust - seriously? I'm yet to see a competent, reliable government that I'd put my trust on. Remember that a govt. is as good as its members and most of the politicians do not get to the "top of the chain" based on meritocracy.

[joniboini]

Some sources said that the latest mining ban is actually not "new", and has been active since a few years ago. It is about the limitation of coal-powered mining iirc, so the latest news is just pure fud. Sadly a lot of people fall for that since it's hard to validate because a lot of sources are reporting the same fud.

[SFR10]

the Bank of England governor recently said bitcoin has no value,

Those clowns don't have the slightest idea about the true meaning of "value" ^[SMH].

Also even if it were not banned, governments can monitor all activity because basically everyone uses centralized exchanges and the blockchain is public.

Decentralized exchanges have become quite popular in recent years and more users are making the switch on a regular basis.

Are people still going to want to hold it when the government can always come after them?

If they start using it in the right way ^{[as opposed to hodling]}, then they don't have to worry about the latter part that much.

since all the wallet apps will be removed from the app stores?

Apps aren't limited to the app/play store. There are already other alternatives ^{[I do know they aren't as safe as the ones mentioned previously]} out there and more will pop out.
Regardless of what the future holds for BTCitcoin, there will always be workarounds when facing such issues.

[ranochigo]

Remember that this isn't the first time China has tried to ban Bitcoin. When it happened previously the value dropped quite sharply from 1K to $300. The regulations didn't really work then, people still used Bitcoin in China, nothing much really changed.

People have to realize that Bitcoin is designed to be intrinsically bad for the government. Thinking that any government would be favourable to Bitcoin is just plain fantasy.