What's preventing bitcoin from worldwide adoption?

[BALIK]

Once after the pandemic the usage of cryptocurrency all around the world have increased. This has happened in terms of real-time usage as well as in terms of trading volume increase. During the same time period India was recorded to have the increase of 100 million users. I'm not sure of this data, but the 30% tax on cryptocurrency as well as 1% tax per transaction have slump the trading volume on the Indian cryptocurrency exchanges. The law came into effect on 1st July and since then the average trading volumes have come down to $5.6million from the range of $9.5million.

30% is clearly too much of a tax for investors. In my opinion, the Indian government does not want to legalize and regulate crypto instead they are looking for ways to discourage people from getting into crypto, giving up crypto when the above tax is imposed.

With the 30% tax, the trading volume on exchanges will decrease but it does not mean that Indian investors will give up on cryptocurrencies, It will force them to find other ways of trading, such as peer-to-peer. This will cost the government a portion of its taxes and they will soon find that the plan failed and backfired.

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[theCommittalist]

But do you know if you today Government and World Bank passes judgement or gives order that Bitcoin is now generally acceptable as payment in all various country, use as fiat including in day life expenses, individuals has no options than to use, now taking of transactions fees it is only less than $1 and max of $2.5 depending on the gas fee at such point. As time goes we could be used to it.,
The honest truth of it is the "Volatility".  

I believe that the laws are fine, the gas fee situation will be fixed in the future for sure without a doubt. Look at Lightning Network on bitcoin right now, it spends only a few satoshis and it is incredibly fast as well.

It is not ideal right now because of security concerns and that is why we are not seeing that everywhere, but it is being worked on right now which means that when the time comes we are going to have a system where it's only like 1-5 cents per transaction and that would be amazing and it could be working towards paying right away anywhere you go as well since you wouldn't have to wait neither, it is both fast and cheap.

The laws are fine? I would rather say that laws are clearly insufficient in most cases or not very favorable regarding crypto to say the least. Actually, from where we are now I expect laws to get even worse over time, much stricter and kind of hindering worldwide adoption in some areas. Bitcoin's utility is massively suppressed by most tax laws around the world for example. If spending Bitcoin on little things even triggers taxable events, using Bitcoin would end in a total mess for most users.

They should rather foster utility with new laws while offering Bitcoin users a fair deal in terms of transparency and taxation, but that is not what lawmakers are after.  

This is the most interesting thing about Bitcoin. It is beyond the current system of 'international law' to control. All it is is a currency, & this is a system that declares the world as capitalist, themselves as liberal. So, a currency made of open-source technology based on the internet, what nation has a right to tax that? Sure, different nations can try banning it or regulating mining or taxing profits made from Bitcoin via exchanges or transactions under their jurisdiction, but what other than cronyism & pessimism & greed could be their motive? What ethical basis can there possibly be for criminalizing or legislating BTC? You can see how desperate & unscrupulous they are when they start blaming it for global warming =/

Fact is, nobody has a right to police the internet. It is in international waters, so to speak. And internet currency has made everyone take this more seriously than ever, so that workable international law & the international constitution necessary to base it on are appearing on the horizon like never before. Some people dream of this signalling a totalitarian new world order, because of their subjective experiences with national governments & regimes of the past. But I have faith in the people. As cannabis returns to the white market for global trade & Bitcoin is increasingly established as a worldwide medium of exchange, poverty everywhere is going to decrease.

As much as I would like to let you know that I fully agree, the issue with what you just said is that it is unrealistic for Bitcoin to develop into its own economic system without any tax burdens whatsoever. I would rather say that whatever generates income is taxable (under most circumstances). If Bitcoin makes you income, a tax applies. I don't think a world would work out properly without taxes. There was an interesting sentence a while ago about the rich saying they are fine with higher taxes and carry a heavier burden than the poor. Then it was added that the state donation account was just in the thousands. If the millionaires and billionaires are fine with higher taxes, why not just send money to that state controlled donation account? In a sense it is the same when I am fine with higher tax, I can either pay higher tax or impose a tax on myself through donations that I commit to. Yet that account is usually literally empty. People aren't going to support public goods the way we wish they were. Economic self-interest isn't bad per se, but it needs moderation and coordination. Tax is a tool to achieve that. I am not saying I am all for taxes in whatever form they occur, but I don't see how an economic system would support a social system without taxation requirements.

Sure they can tax associated income as you say in the form of capital gains or whatever, but my broad point still stands. Bitcoin itself as a standalone thing, unlike any other currency, cannot be claimed & thus taxed by a state agency. It relies on the internet & belongs to the users. Think about a state agency claiming jurisdiction over the internet & trying to tax Bitcoin like they do national currencies, I think that is unrealistic.

I totally get what you are saying and I am not arguing against your point from a theoretical perspective. The reality, however, will turn out to be quite different. Before the governments forego any significant tax income, they would rather build cross boarder alliances in order to set up a tax regime that ensures nobody can get away with amassing wealth while not paying any tax.

Please elaborate further once more for me: so you say that when I buy Bitcoin at 10,000 a piece, and I use that Bitcoin to buy a car for 20,000 a piece, should I, according to your viewpoint, be taxed by my government or not? Could you give one or two examples when you think a tax should apply and when not?

Simply put, if two traders anywhere on earth decide to buy/sell a car in Bitcoin, then they cannot be taxed. The caveat I am trying to add is that once people establish a business based in one or another national jurisdiction doing this then they can be taxed. Also, once people trade their Bitcoin in for any national currency the state agency responsible may impose income or capital gains tax on that. But as long as Bitcoin remains Bitcoin & in the hands of private individuals it cannot & should not be taxed. From my understanding the logic of taxation is that in partaking of a national economy & its exchange medium or currency you are using a service & there is an implied cost. The amount & kind of taxation that is acceptable will probably be the stuff of intense debate for all posterity. But to tax Bitcoin as is you would have to be the centrist state agency ruling over its jurisdiction which is the internet hence it is able to be 'decentralised'. I am not saying that state agencies would never be able to extort or steal Bitcoin & call it taxation because unfortunately anything is possible, but that it will never transparently become standard practice overall because it is contrary to legitimate authority & unethical. This is why the established 'international order' & crony capitalists & their state media have been sidestepping BTC until lately when they have started throwing all manner of kind of childish FUD its way. They don't understand it. It scares them. The opportunity for universal profiteering is unprecedented & the sleepers & party poopers are being forced to reveal themselves  

I totally get your thought process, but let me give you an example which would like you to elaborate on according to your theory:

In some countries there is such a thing as a gift tax. Without going into further detail regarding concrete numbers in specific countries, let's just assume that Bitcoin is valued at 20,000 USD and a person I know well has a piece of art that is officially valued at 10,000 USD and we know that because that piece of art is a limited edition of 100 pieces and there is a relatively liquid market where I could also buy that piece of art in cash for 10,000 USD. But since I know the person well, I make a private transaction and pay with the Bitcoin valued at 20,000 USD. On on the balance sheet that person now officially owns 10,000 USD more in wealth. Later on, that person doesn't sell the Bitcoin for cash but buys a car valued at around 20,000 USD in a private transaction from someone else.

As per the balance sheet, the person accrued 10,000 USD in wealth. Is any tax due according to your point of view? Wouldn't that be one of those typical loopholes people could make use of just by not going through a state controlled fiat currency?

Although I myself do by far not agree with many of the existing tax rules, the real question is how Bitcoin is treated in front of the (tax)law. There are rules in some countries when tax exemption applies for the usage or sale of Bitcoin after a certain period of time. The same applies to a piece of art. If I buy a piece of art for 100,000 USD and sell it for 200,000 USD a week later, usually tax applies in the form of capital gains tax. It doesn't matter what I buy with the piece of art, tax applies for as long as the thing is worth more than what I bought my piece of art for initially.

To take it one step further: one could argue that tax is supposed to be used for the infrastructure I make use of in the country I live. Streets, hospitals, schools, etc. Now an interesting question is this: if you argue that Bitcoin is decentralized in its trust sense, what if I live in a country that provided a substantial amount of mining power? Am I not somehow using or benefitting from infrastructure that my country provides in the form of electricity grids, space, ISPs, etc? The problem is that things get too complex.

I understanding the sort of assumptions you are bringing to the argument, but I would like to continue demolishing at least a couple of them To deal with the case of a purchase of art, it doesn't make any sense. Shady art valuations & purchases have long been used as a means of money laundering & art is an emotive quality. So you seem to be suggesting that a person uses the buying of a piece of art in Bitcoin as a means to protect fiat from the tax inspector? Well for starters, if I had a friend offering me a piece of valuable art for $10,000 & Bitcoin was worth $20,000 that day, I would clearly pay him 0.5 Bitcoin for the item. Not the whole Bitcoin, which would defeat the double-send solution by paying twice anyway. What my friend did with his 0.5 Bitcoin would be up to him.

As we know there are certain state actors that are however privately committed to the obnoxious notion that they 'rule the waves' or 'lead the free world' & so they may think they have a right to tax Bitcoin, because without them & their culture such a thing might not exist.

My solution is to not justify them with a response & continue with the project of universal suffrage & popular sovereignty, whatever they call these things. It is not that a decentralisation movement for individualist internationalism is solely coming from the creation of such currency. But that such currency is an integral part of that wider historical process.

Like the Zen masters say, life is really simple, but analytical thinking has a habit of making it seem complicated

[seYGrdh]

I think part of the reason is that there are still some people who don't understand what Bitcoin is, and there are other countries that prohibit the operation of Bitcoin, which is the most important point.

[Ayers]

I think part of the reason is that there are still some people who don't understand what Bitcoin is, and there are other countries that prohibit the operation of Bitcoin, which is the most important point.

it is up to the government, the government is the one who runs and manages a country, they are the one who decide what is used and what is not used in their country

many people do not know bitcoin or they are not willing to learn about bitcoin because of the warnings from the government, as long as the government accepts bitcoin everything will become easier with bitcoin

[GigaBit]

There is one barrier is that the government does not want to allow it. Because they cannot take any tax on it nor has yet determined how to accomplish it. However, I personally think that such a policy by the government will be difficult to implement, which will hinder the development of cryptocurrencies. Government in India has legalized cryptocurrency investment but not yet legalized as a legal tender. Hopefully when the government of each country gives a positive opinion on it, all the obstacles of BTC will be over.

[Abiky]

it is up to the government, the government is the one who runs and manages a country, they are the one who decide what is used and what is not used in their country

many people do not know bitcoin or they are not willing to learn about bitcoin because of the warnings from the government, as long as the government accepts bitcoin everything will become easier with bitcoin

Governments are the main obstacles preventing Bitcoin from reaching worldwide adoption. They implement strict rules that would force the average person to stay with Fiat. Governments do this because they want to stay in power. Otherwise, it would mean the end of Fiat for good. Despite the setbacks, adoption for Bitcoin has been growing at a slow and steady pace. Fiat's inflation rates are rising like crazy in some countries, so it should only be a matter of time before Bitcoin becomes the standard unit of account.

As it's said in the real world, "if you can't beat them, join them". I think governments will ultimately give up on their quest to "destroy" Bitcoin and instead join the revolution. Who knows if mainstream adoption explodes like crazy within the not-so-distant future? Just my opinion

[Tony116]

it is up to the government, the government is the one who runs and manages a country, they are the one who decide what is used and what is not used in their country

many people do not know bitcoin or they are not willing to learn about bitcoin because of the warnings from the government, as long as the government accepts bitcoin everything will become easier with bitcoin

Governments are the main obstacles preventing Bitcoin from reaching worldwide adoption. They implement strict rules that would force the average person to stay with Fiat. Governments do this because they want to stay in power. Otherwise, it would mean the end of Fiat for good. Despite the setbacks, adoption for Bitcoin has been growing at a slow and steady pace. Fiat's inflation rates are rising like crazy in some countries, so it should only be a matter of time before Bitcoin becomes the standard unit of account.

As it's said in the real world, "if you can't beat them, join them". I think governments will ultimately give up on their quest to "destroy" Bitcoin and instead join the revolution. Who knows if mainstream adoption explodes like crazy within the not-so-distant future? Just my opinion

If they stop trying to destroy bitcoin and join the bitcoin revolution, that means the government will give up its power. I don't think they will, the government will find a way to control bitcoin before accepting it as legal, but control is also a very difficult task because of the decentralized nature of bitcoin.

The way I think in the future accepting bitcoin comes with thousands of different regulations and they will probably rely on centralized exchanges to manage bitcoin users instead of finding a way to control bitcoins directly.

[nullama]

There is one barrier is that the government does not want to allow it. Because they cannot take any tax on it nor has yet determined how to accomplish it. However, I personally think that such a policy by the government will be difficult to implement, which will hinder the development of cryptocurrencies. Government in India has legalized cryptocurrency investment but not yet legalized as a legal tender. Hopefully when the government of each country gives a positive opinion on it, all the obstacles of BTC will be over.

A government cannot stop the use of Bitcoin basically. And most western countries do tax Bitcoin in the sense that they consider it an asset, similar to having shares, or an index fund for example. You need to pay capital gains tax on Bitcoin in many countries. Also if you're paid in Bitcoin you have to pay income tax. Basically they treat it the same as any other financial instrument.

At the end of the day you could live your life with just Bitcoin if you sell goods and services and get paid in Bitcoin and you pay your bills in Bitcoin (which would be other people offering goods and services for Bitcoin). And there's nothing the government could do to stop that.

[amishmanish]

Mostly it is lack of education of Bitcoin. People have heard about Bitcoin, but never know it. They don't know what it is. They don't know how to read a smart contract, and how to get Bitcoins. Thanks to trading platform people are now buying Bitcoins, if not mining them. But yes it's a long way to go before Bitcoin can actually become a true digital currency for common people

[nullama]

Mostly it is lack of education of Bitcoin. People have heard about Bitcoin, but never know it. They don't know what it is. They don't know how to read a smart contract, and how to get Bitcoins. Thanks to trading platform people are now buying Bitcoins, if not mining them. But yes it's a long way to go before Bitcoin can actually become a true digital currency for common people

Yeah, I absolutely agree with that.

I would argue that the vast majority of people in the world that are somehow involved in Bitcoin are basically simply Bitcoin buyers. They just create an account in an exchange, and buy Bitcoin that stays there, like an index fund for example.

There's only a small fraction of those people who actually know a bit more about Bitcoin, have their own wallets, keep it secure, and use it for buying goods and services, as well as a savings mechanism.

But I believe that small number is increasing every year, and it will continue, accelerated by the new ATHs we will continue to see.

[Abiky]

If they stop trying to destroy bitcoin and join the bitcoin revolution, that means the government will give up its power. I don't think they will, the government will find a way to control bitcoin before accepting it as legal, but control is also a very difficult task because of the decentralized nature of bitcoin.

The way I think in the future accepting bitcoin comes with thousands of different regulations and they will probably rely on centralized exchanges to manage bitcoin users instead of finding a way to control bitcoins directly.

It's very unlikely governments will give up their power just like that. What they will do is "regulate" Bitcoin and other cryptocurrencies through centralized exchanges and wallet service providers. It's the least they can do in order to try to "legitimize" the space. But they cannot enforce regulations at the network level because of its decentralized and censorship-resistant design. Consider how US sanctions took down the Tornado.Cash website and its GitHub repository. They thought they were successful at the task, only to realize that the smart contracts are still living on the ETH chain. It would be impossible to take down such contracts because of the decentralized design of the Ethereum blockchain. The only way to "kill" Tornado.Cash would be rolling back the Blockchain, but that would require a supermajority of miners to agree to such resolution (which it's very unlikely it'll happen anytime soon). Imagine how hard it would be to do the same with Bitcoin whose Blockchain is bigger and more distributed than Ethereum's. That's why I believe decentralized cryptocurrencies will be here to stay for a very long time.

Bitcoin's adoption may be limited right now, but it's bound to increase over time at a slow and steady pace. As I've said before, the main obstacle of Bitcoin's adoption worldwide is the government. I wouldn't worry about that as long as decentralization prevails in the end. Just my thoughts