Two-edged sword for countries that banned Bitcoin

[bittraffic]

I'm sure it's better to be early in buying more BTC as much as possible like Pres. Bukele is doing.

No one is left even if they invest or buy BTC in the next 5 years. The government if not the citizens can still set up mining farms in the future.
And I'm sure not all governments want their people to be exposed to a volatile asset such as BTC for they have alternatives like the stablecoins or the CBDC which I think will also undo the banning after having thier own government coin.

[Antonas1]

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.

~ 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

Oh wow! How many transactions did BurtW make? Wouldn't it be safe if we could do it in cash? Or do we have to cross the border to do it?
But you are right; it's better not to do it if bitcoin is banned completely in our country.

[kryptqnick]

Fortunately, it seems that banning Bitcoin isn't really a common practice. In many places, it remains unregulated or barely regulated. In some, there can be regulations and restrictions that aren't very welcoming but not a full ban either. In others, there's actually a crypto-friendly climate. I agree with the op that banning Bitcoin means missing out on several economic opportunities both for the state and for its citizens. However, some countries care about control more than about opportunities and potential positive economic effects. There are also some others that already have very strong economies and are thus not very motivated to introduce something new.

[cheezcarls]

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?

Sad to say that despite that they’ve “banned” Bitcoin, there’s no way that they could fully stop it because it’s decentralized, trustless, etc. Citizens who are in that “banned” country are always finding ways to keep transacting with Bitcoin, especially China.

They should learn from other crypto friendly countries on regulating it instead of an outright ban. It’s a new way for them to collect more taxes, in which they didn’t see that as an opportunity. If other countries can regulate Bitcoin, why can’t the others who have no other option but to ban it. There will always be loopholes.

[adzino]

Only few countries but a ban on using or holding bitcoin and cryptocurrencies as far as I am aware. And most of them are poor countries and/or countries with very high corruption rate. They fear that people will use bitcoin for illegal purpose (the irony here) and they won't be able to stop them. And also what surprises me the most is that all of those country keeps on saying that they do it to "protect their citizen". Lol, sounds more like they do it to keep their citizens under their control. Wouldn't be surprised if one day they learn that their government was using bitcoin to launder money and put a ban so no one suspects them.

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.

These are all excuses. I doubt they even bother to learn anything about blockchain and crypto currencies.

[EarnOnVictor]

Only few countries but a ban on using or holding bitcoin and cryptocurrencies as far as I am aware. And most of them are poor countries and/or countries with very high corruption rate. They fear that people will use bitcoin for illegal purpose (the irony here) and they won't be able to stop them. And also what surprises me the most is that all of those country keeps on saying that they do it to "protect their citizen". Lol, sounds more like they do it to keep their citizens under their control. Wouldn't be surprised if one day they learn that their government was using bitcoin to launder money and put a ban so no one suspects them.

Both rich and poor countries ban or restrict the use of cryptocurrencies, but they are unwise as citizens are still using the coin for everything you can think of. And yes, they would claim they don't want their citizens to use it illegally, but are these people clean themselves? No. All I support is more regulation to give fairness, banning it is out of it, except the country wants to cheat herself.

Sad to say that despite that they’ve “banned” Bitcoin, there’s no way that they could fully stop it because it’s decentralized, trustless, etc. Citizens who are in that “banned” country are always finding ways to keep transacting with Bitcoin, especially China.

They should learn from other crypto friendly countries on regulating it instead of an outright ban. It’s a new way for them to collect more taxes, in which they didn’t see that as an opportunity. If other countries can regulate Bitcoin, why can’t the others who have no other option but to ban it. There will always be loopholes.

You are just on point, their banning is meaningless, and crypto transactions are happening within their nose as P2P even helped better in converting their coins into the national currency. I've always been of the opinion that banning is not the solution but regulation, and they must encourage those dealing with crypto to be transparent enough just like businesses, and the companies are dully registered in their domains so that they could effectively register and regulate them.

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.

1. I think the tax from bitcoin is insignificant and difficult to collect because bitcoin is decentralized, very difficult to manage.
2. This only happens to citizens, but the government is mostly unaffected.
3. I don't think everyone will agree to get their salary in bitcoin because of its volatility, they can take fiat and invest in bitcoin as much as they want.
4. It is a way for the government to maintain its centralized monetary system, if using bitcoin the government will not benefit in this case.
6. Although cryptocurrency gives blockchain prominence, blockchain can be used and applied in many other areas without the need to legalize cryptocurrency.

Bitcoin ban is not a double-edged sword for the government, they will benefit more than harm, IMO.

I guess you are getting the gist all wrong, and maybe you are looking for points where there are none. Let me reply only to the numbers I wish to comment on.

1. You might think it's insignificant, but do you know how much the US is now making on crypto? Is the US not rich already? Mind you, it's not the only thing that would bring income to the country, no single sector could, yet it would surely add if countries could accept the business around it and tax them accordingly.
2. And you think a responsible government should deprive their citizen of such benefits?
3. No one is thinking towards your direction. There are many incomes made online through Bitcoin, which is my glue, this is not about the country you live in. I am still in that situation now, in some cases, companies offer payments only through Bitcoin and other payment systems that are useless in my country. Won't I miss the opportunity with a crypto ban? Some are externally making regular 4-5 digits monthly through crypto, an opportunity that would have been missed with banning.
4. That's because the government don't care. A responsible government will strive to ease their citizen where possible and save them from the exploitation of banks.
6. This is your last wrong reply, no one is talking about blockchain generally, but the lagging of the countries that bans crypto technological wise as they will not advance in that area.

Try not to reply in a hurry next time!

[Lucius]

~snip~

I honestly don't care that some countries have banned Bitcoin and I don't care if others do as well, because Bitcoin has never asked for permission for its existence, nor is it needed today - whether it's from politicians, central banks or presidents. Furthermore, what kind of nonsense is this about the earnings of any country when it comes to Bitcoin, whether it is taxes, mining or something else?

It's my right to do what I want and I don't care at all that the governor of my central bank and his dwarfs keep talking negatively about Bitcoin because they protect the interests of the banks and exchanges that pay them to scare people like that.

1. You might think it's insignificant, but do you know how much the US is now making on crypto? Is the US not rich already? Mind you, it's not the only thing that would bring income to the country, no single sector could, yet it would surely add if countries could accept the business around it and tax them accordingly.

What is the share of US GDP that comes from all cryptocurrency related businesses and do you think the US would be even the least bit hurt if tomorrow they did the same thing that China did a few years ago? I'm sure you don't know this data (and neither do I), but I think @stompix could easily show it to you - whether it's China or the US, you overestimate the importance of Bitcoin and all other cryptocurrencies in the world economy.

Many people were surprised that China banned the trading and mining of cryptocurrencies because they allegedly gave up significant income, without having any idea what the GDP of China or the US is. (United States (GDP: 20.49 trillion), China (GDP: 13.4 trillion)

[stompix]

I'm sure you don't know this data (and neither do I), but I think @stompix could easily show it to you - whether it's China or the US, you overestimate the importance of Bitcoin and all other cryptocurrencies in the world economy.

The whole what a government has to lose thing again? 
Peanuts! That's why all cryptos are compared to a huge economy.
The whole thing started with nearly the same argument, what has China to lose from all the mining fleeing abroad, even if China would be mining all the bitcoins right now, there would be no cost with the electricity and all the miners would give all their coins to the government which is impossible, it would be a $6 billion if we assume a tax on profit of 10% with a profit margin of 50% you're down to 300 million, what can that mean for a 14 trillion economy? And if we consider revenue from trading, it's even worse depending on how you look at it so let's touch that a bit!

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.

Let's explore a scenario with 3 guys from different countries!
A has purchased coins long ago at 6k cost and it's selling at 20k.
B has bought coins from when it was 60k from somebody and it's panic selling it also at 20k!
C decided to buy their coins at 20k.

How does this look from the government's point of view? Two of them are actually fucked from the investment as they've seen a capital outflow of 40k and maybe those coins will never be exchanged in the next decade so no tax, no increase in consumption no nothing while somebody is laughing his ass out! Now mister C decides to sell his coins to his neighbor for the current price of 40k, thus earning 40k in profits and paying let's say 4k, so the government has earned 4k in taxes, but still has a -40k capital outflow. Is this an accomplishment for the last country? 

See how this is way more complicated from a global and not personal point of view than a simple everyone makes money slogan? Not only do you need to tax your citizens but you have to make sure they make profits cause even if they are just holding coins it's not good for the budget at all!

Bitcoin was created so that you can be your own bank, it was not created to raise the tax income in Malawi!

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

Oh this again, how many international payments does the average Joe make in a year?
I know a ton of people who barely make a bank transfer a year to some relative in the next town and we're talking here like everyone depends on international instant payments.

[BlackHatCoiner]

And yes, they would claim they don't want their citizens to use it illegally, but are these people clean themselves? No. All I support is more regulation to give fairness, banning it is out of it, except the country wants to cheat herself.

You do know that banning it, is regulation, right? If you don't trust the politicians for doing the right thing, how can you trust them to regulate this for you? And yet, in a "fair" manner.

Not only do you need to tax your citizens but you have to make sure they make profits cause even if they are just holding coins it's not good for the budget at all!

Unless you collect taxes from unrealized gains...

Oh this again, how many international payments does the average Joe make in a year?

Don't disagree, but this place is full of average people, in my humble opinion of course, lots of which get paid to wear a signature. I've been in other forums before, such transaction fee and punctuality in international payments is priceless in an era of worldwide commerce.

[Welsh]

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

It'll ultimately come down to this. Banning Bitcoin doesn't really do much for them, except prevent them from regulating it, and therefore profiting from it. So, most countries that do ban Bitcoin, tend to unban it at a later date. Barring any major changes to how people view Bitcoin, I imagine most countries will adopt the latter approach, and start taxing it.

The worst outcome for Bitcoin is governments deciding due to it's risky nature, that Bitcoin will be taxed at higher rates than fiat, much higher. Heavily taxed implications could potentially cripple new adoption, more so than banning it outright. They would still benefit from the taxes, but also prevent people from completely ditching fiat, and converting entirely to Bitcoin. I don't think that's even feasible for most people anyway, and therefore the governments probably aren't overly concerned about Bitcoin replacing fiat.

[stompix]

Not only do you need to tax your citizens but you have to make sure they make profits cause even if they are just holding coins it's not good for the budget at all!

Unless you collect taxes from unrealized gains...

A thing that I consider to be impossible to ever be put in place!
I have like zero ideas right now about how you could enforce such a thing but quite a few on how this could go wrong, and how you could even tax it, you choose December 31st at 23:59 as the reference price and you're going to have traders colluding, and only one trade happens at 1$ per coin, everyone losses and applies for tax deductions!
Maybe AOC has a better plan but I don't see this happening with crypto. With property and real estate, yeah! Tokens, no!

Oh this again, how many international payments does the average Joe make in a year?

Don't disagree, but this place is full of average people, in my humble opinion of course, lots of which get paid to wear a signature. I've been in other forums before, such transaction fee and punctuality in international payments is priceless in an era of worldwide commerce.

The demands and needs of a specialized but worldwide community are usually not representatives of the nations in which those reside, or at least let's agree it's nowhere near that stage yet for us.
For fast and uncensorable payments to complete strangers that don't want to reveal their personal data or bank account, bitcoin is undoubtedly king, if I wanted to pay a guy I've never met before living in some secret country he doesn't want to reveal let's say $2000 for a GPU or some really expensive Alpaca socks, I wouldn't do it with BTC unless he agrees to an escrow I choose! And he probably won't!

[Merit.s]

I will say that those government that banned bitcoin in their countries are self-centered, this has blind folded their eyes and made them not to see the benefits that bitcoin  will bring to the country in terms of adding more value to the economy and the citizens welfare. They think that they are doing bitcoin a damage,but they don't know that the more the days and years are passing by bitcoin is gaining more recognition and spreading to the ends of the world because it is a valuable assets and volatile. Those government has deprived their citizens from financial freedom, so that they can monitor and do whatever they like to the citizens financial life. With them or without them bitcoin is serving the purpose of its creation.

[kawetsriyanto]

1. The government cannot earn through Bitcoin in terms of investments, taxes and others.
.....
What do you think guys?

Some of them say that their reason why not legalizing Bitcoin or crypto is because they cannot control it, because of its decentralization. But I am sure enough that what you said here is right, they actually not only cannot control the Bitcoin but also cannot earn money from Bitcoin. Although they try to make some laws about crypto tax, this is also complicated because not every transaction and investment asset is connected to the individual bank account so this will be also not optimal.

However, we cannot deny that some countries also legalize and support crypto in several sectors such as the investment digitally, not as the legal currency. Atleastt, this will give a good progress for the crypto. Not al government hate Bitcoin, but most of them  actually have bigger certain interests so they have to tighten cryptocurrencies in their countries. moreover, they feel that they are in control of the country.

[Yatsan]

1. The government cannot earn through Bitcoin in terms of investments, taxes and others.
.....
What do you think guys?

Some of them say that their reason why not legalizing Bitcoin or crypto is because they cannot control it, because of its decentralization. But I am sure enough that what you said here is right, they actually not only cannot control the Bitcoin but also cannot earn money from Bitcoin. Although they try to make some laws about crypto tax, this is also complicated because not every transaction and investment asset is connected to the individual bank account so this will be also not optimal.

However, we cannot deny that some countries also legalize and support crypto in several sectors such as the investment digitally, not as the legal currency. Atleastt, this will give a good progress for the crypto. Not al government hate Bitcoin, but most of them  actually have bigger certain interests so they have to tighten cryptocurrencies in their countries. moreover, they feel that they are in control of the country.

Actually they can especially if they would prohibit decentralised exchangers and the general use of this technology. Check on those countries wherein cryptocurrencies are banned already. It won't be termed as "banned" for no reason, meaning, people in those countries have no access at all. While to some countries, cryptocurrencies are neutral wherein its usage is not prohibited, but is also not supported, which I think decentralisation plays a role. It could also be taxed using prohibition through centralised exchangers. Fiat will still be used no matter what, because only few businesses accept cryptocurrencies as a mode of payment, to such countries.

[Mr.right85]

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:

Are there countries still practicing democracy in our world today? I hear of a governance called democracy in my nation but its merely a shadow of what could have been. Its just used as a mirage to what should have been.

No matter how glaring the truth might be in the eyes of the government concerning cryptocurrency, it would be most difficult for them to accept the crypto innovation without taking as much time as they could.

Accepting cryptocurrency means the government have got to lose some of its sovereign power and that's something they aren't prepared for. Especially in the aspect of finance where they've got the power to manipulate price.

[Lucius]

The whole what a government has to lose thing again? 
Peanuts! That's why all cryptos are compared to a huge economy.
The whole thing started with nearly the same argument, what has China to lose from all the mining fleeing abroad, even if China would be mining all the bitcoins right now, there would be no cost with the electricity and all the miners would give all their coins to the government which is impossible, it would be a $6 billion if we assume a tax on profit of 10% with a profit margin of 50% you're down to 300 million, what can that mean for a 14 trillion economy? And if we consider revenue from trading, it's even worse depending on how you look at it so let's touch that a bit!
~snip~

It seems that these theories still live in some minds, although they are completely meaningless in the global picture. Maybe some people don't understand the difference between a billion and a trillion, maybe it's something else - but anyone who thinks that big and powerful countries lose something if they ban Bitcoin is living in a big delusion. China is a good example that we have mentioned many times in the past and proof that those at the top did not even blink when they signed laws that prohibit trading and mining.

With some exceptions, for most countries and governments of the world, Bitcoin is just a nuisance that would be good to eliminate, but as our friend Congressman Brad Sherman once said that Bitcoin is just a baby, and babies are pretty harmless, right?

[KingsDen]

Will it interest you to know that government does not need the bitcoin to survive.
Will it also interest you to understand that any government can create job for her citizens without depending on the job opportunity that bitcoin and cryptocurrency with bring? I can rightly say that no government will miss out anything if they did not adopt bitcoin and Bitcoin mining.

What we are considering is the freedom of our citizens to choose the kind of money that they want to use.
That is why I love United States of America whose ideology is liberty.
Everyone has the right to choose what they use in as much as it will not affect the well-being and the economy of the country at large.

So asking government to adopt massively the idea of Bitcoin is for the good of the Citizens and has no direct positive impact on the government.

[vv181]

Those points that benefit the citizen are insignificant compared to what some countries are afraid of. Due to the decentralized and pseudonymity nature, they prefer to not let the people have control of this kind of system. Despite the lack of clarity on the ban regulation, I assumed that most prohibitions will cite that bitcoin is used for terrorism, money laundering, and dark market payment options.

Let's also not forget tax evasion has also one of many baseless accusations that deem bitcoin only brings bad things to the world. Heck, there is even an organization that wants to abolish bitcoin by simply bullshitting that it is a waste of energy and not climate friendly.

[goldkingcoiner]

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?

I would have to disagree with a few things you said, unfortunately. But I also do agree with some of the other things you said.

First of all, freedom is never without a price. In a country with like North Korea where your freedom is completely taken from you, the price to gain that freedom is a revolutionary civil war. Quite a heavy price. Our current modern, peaceful times in first world western countries has obscured that fact. Freedom is something which we should not give away, not even a bit.

1. Disagree. The government could just invest in Bitcoin themselves and they would see a nice profit.
2. Agreed.
3. Half-Agreed. If you have the internet you can earn Bitcoin for your work online and the government does not have to know, unless your opsec is bad.
4. Depends on the country. Enforcement in North Korea is different than the enforcement in US.
5. Agreed, but this will be temporary. The investors will see how little power the government has over Bitcoin and calm down.
6. Not sure what you meant.

In a nutshell, no government can ban Bitcoin. No need to panic.

[Gyfts]

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

It'll ultimately come down to this. Banning Bitcoin doesn't really do much for them, except prevent them from regulating it, and therefore profiting from it. So, most countries that do ban Bitcoin, tend to unban it at a later date. Barring any major changes to how people view Bitcoin, I imagine most countries will adopt the latter approach, and start taxing it.

I haven't seen a country successfully pull off a crypto ban yet but China has floated the idea in the past (in fact they might have already implemented a formal ban, but their enforcement is nonexistent).

I think the regulation portion of Bitcoin is the way most countries would go about banning bitcoin by proxy. If they can dissuade people into holding/using crypto by excessive taxes or governmental red tape, that would have the same effect as an outright ban -- and they wouldn't need to invest resources related to enforcement. That being said, to your point, if the government sees an opportunity to profit off crypto they would not hesitate to capitalize.