Unaddressed Bitcoin FUD

[brainactive]

I've been trying to educate myself on Bitcoin and there are a few issues I'd like to understand more about. Not looking for hopium or to create additional FUD, would appreciate just a level headed discussion.

1. What would be the implications of governments banning trading on crypto exchanges?
2. If all governments coordinated to ban crypto trading on exchanges, would Bitcoin survive? What is stopping governments from doing this?
3. If Bitcoin does not succeed as a global payment solution, how likely is it to still be a store of value?

[NeuroticFish]

1. What would be the implications of governments banning trading on crypto exchanges?

The governments are not all coordinated and will probably not be able to stop all exchanges. Keep in mind that there are also decentralized exchanges over there, not only the bigger and most known centralized ones.
So all that can happen would be a lot of noise and maybe a few businesses relocating.

2. If all governments coordinated to ban crypto trading on exchanges, would Bitcoin survive? What is stopping governments from doing this?

They cannot. They are not coordinated. And they would need to filter all internet packets and also ToR. Globally.

3. If Bitcoin does not succeed as a global payment solution, how likely is it to still be a store of value?

Just think, Bitcoin is not yet a success as global payments, but it already works pretty good as investment and store of value, imho. So they don't go together.

[brainactive]

The governments are not all coordinated and will probably not be able to stop all exchanges. Keep in mind that there are also decentralized exchanges over there, not only the bigger and most known centralized ones.
So all that can happen would be a lot of noise and maybe a few businesses relocating.

Agree they are not all coordinated in their ideologies but wouldn't Bitcoin be a threat to all of them if Bitcoin becomes sufficiently big?

And since governments rely on the devaluation of the dollar as an indirect tax, doesn't this mean it's in the interest of the government to introduce unfavourable tax laws or other negative incentives that can achieve similar outcome to what a direct Bitcoin banning was set out to achieve?

[NeuroticFish]

Agree they are not all coordinated in their ideologies but wouldn't Bitcoin be a threat to all of them if Bitcoin becomes sufficiently big?

Different governments do see things different. Most probably for some will not be a threat at all.
There are already politicians who want/allow to accept bitcoin and I think that there are some who want to even replace their currency with bitcoin, just they're too few for such moves yet.

And since governments rely on the devaluation of the dollar as an indirect tax, doesn't this mean it's in the interest of the government to introduce unfavourable tax laws or other negative incentives that can achieve similar outcome to what a direct Bitcoin banning was set out to achieve?

First mistake: most rely on devaluation of their currency, not necessary dollar.
Second: Bitcoin doesn't have to replace a country's currency in order to be successful.
About unfavorable laws, those can happen, at least temporarily, but again, not everywhere. Especially where democracy works, they can't do much more than overly tax it (if they know that you hold it!), but even that is not likely. If you read the news, the countries evolve in the opposite direction of what this FUD tells. In various places you can pay your tax with Bitcoin already.

[brainactive]

IMO Bitcoin already success as store of value. We've already seen Bitcoin used as option to secure people's wealth during few national economy crisis.
[\quote]
It's done well in the past decade no doubt but if it's not used as a global payment solution, what advantage does it have over gold? Some people say it has perfectly fixed supply but I'm not sure this alone is enough to replace an asset thats been used for thousands of years. Gold's inflation rate is close enough to be considered fixed supply from a practical standpoint.

[Charles-Tim]

3. If Bitcoin does not succeed as a global payment solution, how likely is it to still be a store of value?

The mainstream global payment you mean here is not necessary before Bitcoin will be a store of value, but it will help in its adoption. What that matters most is for people to see the real fact about Bitcoin and buy it. Know that Bitcoin is not only a payment means, it is also an asset on its own with its limited supply which makes it deflationary and appreciative in value as it is adopted.

3. If Bitcoin does not succeed as a global payment solution, how likely is it to still be a store of value?

I do think about this at times, like if the whole world just go against Bitcoin, this may lead to even mining industry to collapse, forcing all miners not to mine again, ASICs manufacting companies can be mandated no to produce the mining machines again, and the likes. This can lead to crypto extinction generally, but this will significantly affect people negatively, I believe the governments will not want that.

Some people do not like cryptocurrencies, some people really like it, this can not make crypto ban possible. We have seen in some countries as opposition party succeeded for the presidential seat and crypto that was banned were legalized again.

Like in Nigeria, the opposition party leader that contested as the president even supported cryptocurrencies. If he has been the president by now, I believe cryptocurrencies wouldn't have been banned by the CBN. This is just the politics that is going on in the world, people are not the same, countries are not the same, the reason Bitcoin and other cryptocurrencies can not be banned. So, there won't be anything like governments coordinating together to ban cryptocurrencies. As some will ban, some will accept, and countries that even support Bitcoin are far more than those than ban it.

Yes, there are ways to exchange bitcoin without centralized exchange.

This is even the best way to go if seeking for privacy, there are decentralized platforms that people do meet to exchange cryptocurrencies like Bsiq, Hodlhold and Localcryptos. There are even platforms like Bitcointalk we can easily trade cryptocurrencies, people that are into crypto for long even know more people they can directly trade crypto with without even using any platform.

[brainactive]

Second: Bitcoin doesn't have to replace a country's currency in order to be successful.
About unfavorable laws, those can happen, at least temporarily, but again, not everywhere. Especially where democracy works, they can't do much more than overly tax it (if they know that you hold it!), but even that is not likely. If you read the news, the countries evolve in the opposite direction of what this FUD tells. In various places you can pay your tax with Bitcoin already.

I'm not saying it has to replace a country's currency 100% for it to be successful. But the more Bitcoin is being used as a store of wealth, the less power the government has in the sense that one of their main tools (money printing and currency devaluation) is now less effective. What are some reasons for governments to be pro-bitcoin?

[indo1]

1. The government wants to make full use of cryptocurrencies and control them completely.

2. The government hates decentralized systems, and if they can't master them, then they definitely want to destroy them.

3. No one knows, because bitcoin can go up or down with its development, and how much people like and hate it.

[Kakmakr]

I've been trying to educate myself on Bitcoin and there are a few issues I'd like to understand more about. Not looking for hopium or to create additional FUD, would appreciate just a level headed discussion.

1. What would be the implications of governments banning trading on crypto exchanges?
2. If all governments coordinated to ban crypto trading on exchanges, would Bitcoin survive? What is stopping governments from doing this?
3. If Bitcoin does not succeed as a global payment solution, how likely is it to still be a store of value?

1. Decentralized Exchanges that cannot be taken down (Bittorrent) will take it's place.
2. People will shift away from centralized Exchanges and trade on decentralized exchanges. Government know, they get ZERO taxes from decentralized trading platforms.
3. As long as there are a demand (legal or illegal) for Bitcoin and Crypto currencies, it will have a value. (As a payment or a Commodity)

I would welcome it if they banned it, because I currently have to pay more than 20% Capital gains on all the Crypto currencies that I have sold in the past. (Underground markets will flourish and you will also not pay VAT) 

[elda34b]

I also think that taxing people will be better from the government perspective. There's no need to ban exchanges, it will increase the burden on the law enforcement, with no additional source of income. They'd rather get 15% taxes instead. After all, it's not like people will riot or do something ridiculous just because they're a fan of crypto.

Making it illegal to trade crypto through exchanges will just make it difficult to find out who is the new millionaire.

[NeuroticFish]

I'm not saying it has to replace a country's currency 100% for it to be successful. But the more Bitcoin is being used as a store of wealth, the less power the government has in the sense that one of their main tools (money printing and currency devaluation) is now less effective. What are some reasons for governments to be pro-bitcoin?

You do have a point there, although I think that the inflation and government getting to actually benefit from it is more complicated.

As pro, the first things that come into my mind would be that it's more traceable than fiat and they won't have the headaches with counterfeit money. Also keep in mind that there are countries that don't even use their own currency. And there Bitcoin is as good as any, or better.

[brainactive]

You do have a point there, although I think that the inflation and government getting to actually benefit from it is more complicated.

As pro, the first things that come into my mind would be that it's more traceable than fiat and they won't have the headaches with counterfeit money. Also keep in mind that there are countries that don't even use their own currency. And there Bitcoin is as good as any, or better.

CBDCs are even more traceable than Bitcoin and that aligns more with their interests. I guess one reason governments might be interested in Bitcoin might be potential for innovation which benefits economy? Some believe blockchain, dapps etc are next layer of internet and that new innovation can come out of that. But i just feel like the mainstream aren't gonna care whether apps are centralized or decentralised. Take social media for example. We have Facebook and say we have a decentralized Fbook. Would the mainstream care about decentralisation? Many claim to care about their privacy but do their actions show that? Everyone went crazy about WhatsApp changing privacy wording earlier in the year and there was this hype around Signal but now people have forgot about it and most still use WhatsApp.

[SquirrelJulietGarden]

1. What would be the implications of governments banning trading on crypto exchanges?

They won't. If they want, they should do it long time ago, not now, not in the future.

Because blockchain technology has been developed impressively and has been integrated deeply to society. It is not as same as in 2017 or earlier.

Furthermore, governments will have more benefits from crypto exchanges. They will gain more tax from local crypto investors or traders. There are some nations that have strict tax policies as Japan or South Korea.

2. If all governments coordinated to ban crypto trading on exchanges, would Bitcoin survive? What is stopping governments from doing this?

People can make peer to peer trades. No problem.

Bitcoin transactions can not be cracked down, rejected by governments. They can not freeze your Bitcoin wallet or steal your private key.

3. If Bitcoin does not succeed as a global payment solution, how likely is it to still be a store of value?

Does physical gold bars actually become a successful global payment method? It is mainly used as a store of value.

Bitcoin has more advanced feature and more convenient than physical gold bars.

[slaman29]

We can already see the answers to your questions actually just looking back at the past few years.

1. When governments ban trading, people go p2p and underground. See India and see China. People trade on whatsapp, on telegram even on yahoo messenger or wechat:)
2. Governments cannot even coordinate the war on money laundering, so forget crypto bans. They all want different things and understand crypto differently too!
3. BTC has succeeded as a global payment solution. Just look at this forum in economics section.

[DooMAD]

What would be the implications of governments banning trading on crypto exchanges?

That would be an issue if they prefer people to conform to KYC/AML requirements.  If they drive the use of crypto underground, it will be more difficult for them to monitor.  It's in their best interests for as many people as possible to use regulated exchanges.  That way, they can easily track what's going on, as they have the identities of all the exchange users recorded.  If anything, they would only attempt to shut down the unregulated exchanges.  But that's not easy and can swiftly turn into a game of 'whack-a-mole'.

[ranochigo]

I think the first question is quite well answered. I'll skip that.

2. If all governments coordinated to ban crypto trading on exchanges, would Bitcoin survive? What is stopping governments from doing this?

Governments can already impose whatever kinds of restrictions that they want to on exchanges, nothing is stopping them. However, this entails that most of the trading activities becomes unregulated. This makes it difficult for governments to enforce KYC/AML to track their citizens, it would be far better to create legalized exchanges to at least ensure that they're able to get some information from it. There is really no incentives to ban Bitcoin, Bitcoin is just about the furthest threat to fiat and I don't see it being poised to take over fiat anytime in the future.

3. If Bitcoin does not succeed as a global payment solution, how likely is it to still be a store of value?

As long as there's a wide userbase and that people are willing to peg a value to it, then it'll be a store of value. It's legality is of course in question in certain areas.

[BrianH]

Regarding #2, here are decentralized exchange lists:
1. Classified: https://kycnot.me/
2. Extensive: https://www.reddit.com/r/Bitcoin/comments/cd1fr8/list_of_nokyc_instant_exchanges/
3. Price comparison: https://swapzone.io/

If you want to buy crypto with fiat, there are multiple ways to do this (localcoinswap, localcryptos, localmonero, bisq, etc.).

Crypto can not be stopped by world governments. Manipulated, but not stopped.

[NeuroticFish]

CBDCs are even more traceable than Bitcoin and that aligns more with their interests. I guess one reason governments might be interested in Bitcoin might be potential for innovation which benefits economy?

That's correct. But not all governments will issue CBDCs simply because those need a certain infrastructure too and grandma' will prefer paper money while grandson will prefer bitcoin.
And as government you better be permissive with Bitcoin before people turn to... Monero, instead of your CBDC.

Some believe blockchain, dapps etc are next layer of internet and that new innovation can come out of that. But i just feel like the mainstream aren't gonna care whether apps are centralized or decentralised.

New things always bring hype. I still read now and then posts here from people who think that if you put any kind of project on blockchain it will become extremely good.
Yes, more decentralization is necessary in the world, but certain balance has to be found.
Also more privacy is needed, but most governments have a different agenda.
Actually on Bitcoin too, we can guess based on current actions. In the future many things will probably be much different than we'd imagine. But [back to initial topic] stopping Bitcoin is very difficult now. It got the traction it needs to survive - at least the decades to come.

[dkbit98]

What would be the implications of governments banning trading on crypto exchanges?

It already happened in some countries, for example China, Venezuela and Iran banned trading, exchanges and just recently China is thinking of banning mining.
Nothing special happened after that, market reacted with more volatility and price oscillation but they all moved to other countries and started using P2P trading websites and decentralized exchanges.
We can expect to see more bans in future but we are also going to see atomic swaps and better trading options without any central authority or website.
People are majority and we the people have the power and not minority who make the rules, so nothing can stop us if we wake up and realize this.

If all governments coordinated to ban crypto trading on exchanges, would Bitcoin survive? What is stopping governments from doing this?

Isn't recent mining and fake global warming fud already being coordinated?
Bitcoin have more lives than cats, it survived over 400 ''deaths'' so far and I don't see anything can stop Bitcoin long term when people realize how bad and corrupt fiat system is.
Exchanges can freeze your accounts and coins and I don't expect to see them existing like they exist today for long time, so my prediction is that fiat-dollar system will die first.

If Bitcoin does not succeed as a global payment solution, how likely is it to still be a store of value?

I don't expect to see Bitcoin being used as payment option in near future, and most likely Bitcoin will be global reserve currency and store of value, until we have some better solution for saving fees on payments with BTC.
Let's wait next halving and see what happens them.

[franky1]

governments can only regulate their fiat
the work around is simple

trade fiat for a accepted medium of exchange. whether it is las vegas poker chips or currency of another country thats not heavy handed.

and then trade that for bitcoin

there are 200+ countries and more then that in currencies
just find the bitcoin friendly fiat and make that bitcoins main peg

in short
bitcoin exchanges will stop measuring bitcoin vs USD and instead measure it against JPY
(japan sees bitcoin as legal tender and #1 most friendly towards bitcoin)