Two-edged sword for countries that banned Bitcoin

[EarnOnVictor]

Freedom is priceless, but it's unfortunate that some countries are depriving their citizens of this right. The banning of Bitcoin is one of them, and the countries doing this are not wise but not entirely foolish because they have their reasons. Nonetheless, they are showing excessiveness in their dispensation of authorities as far as I am concerned. However, one thing these countries have in common is either they don't practice democracy or it is weak in the country.

Not all policies are completely good, and you don't cut the head off because you want to cure a headache. I pondered on this today after responding to a reply, how naive some of these countries could be as they (the government) and their citizens would be negatively affected in the following ways, though they are not the limit:

1. The government cannot earn through Bitcoin in terms of investments, taxes and others.
2. The citizens would be deprived of the fortunes attached to Bitcoin when they own it or do investments with it.
3. The citizens would be deprived of employment that could be paid through Bitcoin only, especially online.
4. They will be forced to embrace fiat with high transaction fees and a slow time of completing most international transactions, unlike Bitcoin.
5. The investors' confidence will slightly be affected since many companies dealing with Bitcoin will not be able to thrive under such conditions, so they go elsewhere.
6. Setback in blockchain and the technology attached to it when countries are yearning for advancement etc.

They do this in the name of curbing illicit financial flow, but the question is, is it worth it? I don't see a winner here if they truly have the love of their country and citizen at heart, they should have regulated it, not banned the coin.

What do you think guys?

[Charles-Tim]

The government suppose to legalize bitcoin and take advantage of taxing their citizens, but if bitcoin is not legal in a country, the bitcoin companies that supposed grow will have no option than to leave the country, reducing economic benefits and at least, adding to unemployment directly and indirectly.

But as for individuals, some still know that bitcoin is decentralized, what is decentralized like bitcoin is difficult for the central authority to control, that is why it won't be surprising that some people will still buy and hold bitcoin in such countries. Even China banned bitcoin several times, it banned bitcoin mining, now the second country after USA with miners that have highest bitcoin hashrate after it went to zero immediately after the crackdown, what also surfaced later is that bitcoin is treated as a virtual property in China. Nigeria's central bank as a central authority, banned bitcoin, but yet bitcoin not banned in Nigeria. Many others like that which make citizens of some nations to still be able to buy and hold bitcoin.

[NotATether]

4. They will be forced to embrace fiat with high transaction fees and a slow time of completion, unlike Bitcoin.

As much as I would've liked to be wrong, the reverse is true here. Payment networks can settle fiat transactions in a matter of seconds within a particular country - assuming it's not held up somewhere for manual review, but they only happens when using a foreign payment processor.

SWIFT is a dinosaur though.

[stompix]

Two things I disagree with.

1. The government cannot earn through Bitcoin in terms of investments, taxes and others.

This is a bit of a misconception.
If the citizen of each state sells a coin to some other citizen, the amount of money overall in the said country stays the same, you buying a BTC for 100$ and then selling it for 60k means that this has changed:
John had 1 bitcoin, you had 100$, I had 60k, now John has 100$, you have 60k, I have one BTC, as bitcoin doesn't produce money out of thin air.

For sure it will tax you for your gains but if it weren't for BTC I would have spent those 60k on something else, maybe a car, and the state would still have got the tax on vat and on annual tax and road tax and gas tax ...and tax and tax!

If now the value of the coin has reached extraordinary levels and the citizens of countries that have stocked up on BTC want to sell their coins at a profit and there are buyers from other countries, what would the governments of those counties benefit since their citizens are actually importing foreign currency at the expense of their own since they spend dollars, euros, and yens to buy coins from abroad?

So basically a government would only benefit if the balance is positive, if everyone would be just buying coins then it will be a loss for them, and there's no way for every country to benefit in the long run, it's impossible!

At a personal level Bitcoin can indeed make you wealthy and protect your finances, but on a global level, it's just a redistribution of money.

4. They will be forced to embrace fiat with high transaction fees and a slow time of completion, unlike Bitcoin.

The are plenty of services that are just as fast and at least in Europe, I get no fees for an instant national transfer.

[serjent05]

1. The government cannot earn through Bitcoin in terms of investments, taxes and others.

@stompix had a great answer to this one.

2. The citizens would be deprived of the fortunes attached to Bitcoin when they own it or do investments with it.

At the same time people are saved from scams and fraud from the company that uses Bitcoin to exploit people.  Banning Bitcoin is much better than keeping it afloat and not regulating it since there are lots of people who wanted to take advantage of others by exploiting the trending industry.

They will be forced to embrace fiat with high transaction fees and a slow time of completion, unlike Bitcoin.

Have you ever done a fiat money transfer?  Most of the bank transfers today are almost instant, I think you should try it once.

6. Setback in blockchain and the technology attached to it when countries are yearning for advancement etc.

Blockchain technology can be integrated even without Bitcoin.  Bitcoin is just a product of blockchain tech so basically, Blockchain technology is far wider than Bitcoin and the cryptocurrency industry.  So we cannot say that banning Bitcoin means not accepting blockchain technology.  Any country can integrate blockchain technology and reject any cryptocurrency in the market at the same time.

What do you think guys?

The world will go on without Bitcoin, Blockchain can be integrated without the present cryptocurrency so the government not implementing or adopting the current cryptocurrencies doesn't mean they cannot take advantage of Blockchain technology.  But I always think that it is always better to have extra option since it opens up more opportunity.

[_act_]

As much as I would've liked to be wrong, the reverse is true here. Payment networks can settle fiat transactions in a matter of seconds within a particular country - assuming it's not held up somewhere for manual review, but they only happens when using a foreign payment processor.

I remember a time I wanted to make use of a foreign gambling site, I was able to deposit into the gambling site in just few seconds, but the withdrawal is wire transfer, it takes 2 weeks before I was able to see the money that I withdrew. When I joined this forum, I was able to see numerous crypto gambling sites that I can deposit bitcoin or altcoins in some minutes and also able to withdraw in some minutes, unlike before.

[hugeblack]

Governments prefer to keep cash or earn from citizens’ transactions, so they allow some foreign currencies, but what happens in bitcoin is that liquidity disappears from the banking system to a new system that is not controlled by the state and needs resources to impose taxes on it, and therefore they resort to the easiest solution, which is ban or warning from Risks.

So it is not a double-edged sword, but a follower of the herd.

[Daltonik]

Corporations and states sitting on the issue and percentages of transactions of traditional finance, which amount to hundreds of billions, will certainly somehow counteract the spread of bitcoin, and although even they recognize the usefulness of introducing blockchain, they are trying to block bitcoin itself, although they retain the opportunity for corporations themselves to participate in its accumulation.

[Antonas1]

2. The citizens would be deprived of the fortunes attached to Bitcoin when they own it or do investments with it.

If you already know that your country bans Bitcoin, then don't do it. Even if you already have it, exchange it secretly, that's what P2P is for.

3. The citizens would be deprived of employment that could be paid through Bitcoin only, especially online.

More online jobs are paid using fiat. Until now, Bitcoin is still only a payment alternative.

5. The investors' confidence will slightly be affected since many companies dealing with Bitcoin will not be able to thrive under such conditions, so they go elsewhere.

How many companies is that? Microsoft? Whole Foods? Starbucks? Home Depot? What's else? Please tell me the name. They all use Bitcoin as a payment alternative, and fiat is still the primary payment method.

There is no trouble if a country bans bitcoin for now, but Blockchain is a different thing.

[BlackHatCoiner]

The banning of Bitcoin is one of them, and the countries doing this are not wise but not entirely foolish because they have their reasons.

Not sure if that's what you meant, but authorities banning bitcoin as a currency, provided that authorities want to stick their nose into citizens' businesses, is a great choice. Discourage merchants on using peer-to-peer electronic cash, in an epoch where most transactions happen electronically, and you're a surveillance expert!

The are plenty of services that are just as fast and at least in Europe, I get no fees for an instant national transfer.

From national bank_1 to national bank_2? In my country, it charges something. Transactions within users of the same bank confirm instantly, though, and with no charge.

[stompix]

From national bank_1 to national bank_2? In my country, it charges something. Transactions within users of the same bank confirm instantly, though, and with no charge.

Yup, ING and Erste for example, I get zero fees for national transfers, AMRO also offers 0 fees for the whole eurozone but they are not instant, don't know how much they charge, there are some banks that offer them for free in some countries as they have alliances with other banks and so on.
But yeah, I should have probably added: "some" as not all of them do and some that do do charge a monthly fee which doesn't exist in bitcoin.

If you already know that your country bans Bitcoin, then don't do it. Even if you already have it, exchange it secretly, that's what P2P is for.

It depends on what type of enforcement that country seeks, if they ban it so they can wash their hands off any problems it causes then it's no problem dealing with it, if they actually seek to pursue and fine or arrest traders most P2P won't help you. Remember that in order to do P2P you still need to find a trader and deal with him over a different payment channel be it bank/wu/skrill whatever, that guy with his hundreds of weekly payments to strangers is so easy to identify that if they wanted they could track him in one minute. And then all they have to do is follow the money flow.

I would advise anyone in a country that enforces a ban with prison sentences against trusting somebody online for trades, you might be dealing with an undercover cop. We had users on this forum getting into trouble like this:
https://bitcointalk.org/index.php?topic=934268

[hatshepsut93]

You are missing one point - in most countries the Bitcoin ecosystem is such a tiny part of the national GDP, that it's many times smaller than the margin of error of measuring it. So countries that ban Bitcoin don't really feel these negative effects.

Most of the countries that banned Bitcoin are repressive regimes that don't want their people having any financial freedom, because it could potentially undermine the regime, if Bitcoin would get serious traction there.

[Taskford]

They do this in the name of curbing illicit financial flow, but the question is, is it worth it? I don't see a winner here if they truly have the love of their country and citizen at heart, they should have regulated it, not banned the coin.

Just reading that part. I feel angry when I keep hearing people (the Government) thinking that Bitcoin is use for illicit financing. We all know all such kind of funding has been in play way before Bitcoins existence through Fiat, but are they ceasing to use their fiat money still? No. I think it is just them trying to control their citizen's financial life.

Don't be angry with that since its normal, to many people still use bitcoin to take advantage of others this is why I can't blame the government to think negatively on it  plus we can also add up the volatility which create some confusion about the real status of bitcoin. Maybe the country decide to ban bitcoin doesn't need its existence to its country for now but for sure in future once blockchain and bitcoin development will be widely adopted for sure they will also take a look back on this.

[coupable]

Since the banks are the actual controller of the state's general policies, everything that affects their interests will meet with great opposition. Bitcoin is considered the biggest threat to the banking system, whether on a local or even global level.
Since, although the state is able to control transactions made with Bitcoin and savings by creating applications with exact settings that enable it to track the movement of Bitcoin and apply the necessary taxes to benefit from it, it does not strive within the limits of what is possible since this affects the banking sector It is not in his interest to change the financial policies of the state in a way that is not in line with its interests.

[sheenshane]

They do this in the name of curbing illicit financial flow, but the question is, is it worth it? I don't see a winner here if they truly have the love of their country and citizen at heart, they should have regulated it, not banned the coin.

What do you think guys?

We know that our governments combating fraud activities since then and then it could Bitcoin is a possible threat to that since it's decentralized and no one has control over it.  But instead of taking advantage to tax their people, they prohibit to use of it, governments only care about people's taxes they think that it'll help their people circumvent capital controls which do illegal activities and possibly governments lose economic controls.

That's why Bitcoin was designed with a decentralized nature so that no one has to control it and people still use Bitcoin even though it's prohibited in their country.  Who cares if the government didn't accept Bitcoin as a legal tender?  In fact, in this case, their loss not ours.

[Plaguedeath]

I don't think it's can be called as two edged sword, the government only lose a chance to earn more money from crypto taxes, that's all. If they accept Bitcoin, there's will be many risk for their countries like a criminal in internet will increase, money laundering will increase, $5 wrench attack will increase, people who blame the government to accept Bitcoin will increase etc. That's many risk that the government doesn't want to accept and it's hard to trace a hacker in internet since not all people are really mastered in technology.

[Wexnident]

3. The citizens would be deprived of employment that could be paid through Bitcoin only, especially online.

There are countless other jobs that pay through fiat compared to Bitcoin, I don't think losing that would be a problem really. Heck, afaik Bitcoin is only an alternative payment for most jobs.

4. They will be forced to embrace fiat with high transaction fees and a slow time of completing most international transactions, unlike Bitcoin.

There are other services that work wonders as well though afaik?

6. Setback in blockchain and the technology attached to it when countries are yearning for advancement etc.

I don't think banning Bitcoin equates to banning/blocking research studies about blockchain tech. China has banned Bitcoin and yet afaik they've made significant progress in their blockchain studies.

Bitcoin doesn't have that big of an impact in most countries really so damages if there are any, are rather minimal for each country. Not to mention that fiat still would prove to be a better in majority of the cases you'd have.

[8rch7]

I don't think it's can be called as two edged sword, the government only lose a chance to earn more money from crypto taxes, that's all. If they accept Bitcoin, there's will be many risk for their countries like a criminal in internet will increase, money laundering will increase, $5 wrench attack will increase, people who blame the government to accept Bitcoin will increase etc. That's many risk that the government doesn't want to accept and it's hard to trace a hacker in internet since not all people are really mastered in technology.

The post is very, very reasonable, actually the government is afraid of losing their income, because they can't be sure how much he gets from crypto taxes, because digital currency is very difficult to control by anyone that's why the government prohibits any form related to crypto currency , although they actually realize that the government can get a lot of coffers from crypto currency, but because the government can't control bitcoin, the government forbids bitcoin mining.

[The Great Kardoko]

The whole "freedom" aspect of bitcoin is just marketing nonsense. It should probably be banned and it won't bother me to take the loss on what I own.

[rhomelmabini]

The whole "freedom" aspect of bitcoin is just marketing nonsense. It should probably be banned and it won't bother me to take the loss on what I own.

Your statements are totally contradictory, so you think it was more like a collectible that you own Bitcoin? What do you think was the best aspect that Bitcoin has that you think it's worth owning?