Is there any benefit of bitcoin to the government?

[Bananington]

Bitcoin has benefits to us, it is why we speak positive about it and support it because if bitcoin was in no way of benefit to us, supporting it will be difficult maybe like the government. Maybe we have all been selfish and just been discussing the benefits that bitcoins have offered us and not how it has also benefitted the government too. Is the government a part of the benefit list of bitcoins, is there any benefit that bitcoin offers to the government? If your answer is "no benefit", do you think that it could be a reason why the government do not support bitcoin? If your answer is "yes, but not enough benefit", do you think they are just ignoring the benefits to them and focusing more on the benefits to the people which is making them angry?

[DaveF]

Anything that allows the movement of money benefits the government so long as they can track it and tax it.
The problem is most people do not want to be tracked and taxed, so you wind up in the loop of that.

Slowly, there is more acceptance in state & local governments https://bitcointalk.org/index.php?topic=5437485 but like everything else it's a process and will take time.

-Dave

[bittraffic]

A government can benefit thru the profit of course if they have a BTC stash.  The Kingdom of Bhutan was in the news that they were stashing BTC and ETH according to Forbes. They however put it on Blockfi and Celsius. : facepalm :

BTC will be useful to countries that don't have their own currency like El Salvador. They were using USD and BTC is an alternative to them and so they are mining. I'm not sure how true the news was but recently, Russia was said to be mining BTC.

[Yogee]

BTC does not benefit the Government directly but the technology behind it does. They indirectly benefit from taxes as mentioned by Dave and also on the penalties they impose on different companies involved in crypto. I don't know how many they have collected from settlements so far but it''s probably in millions. If you add those seized BTCs then the figure will be a lot higher.

[kryptqnick]

I believe it's been discovered in the past that some governments use Bitcoin for their own purposes in cases where they want to be discreet. Then there's also El Salvador, and I suppose it's easily true to say that Bitcoin is beneficial to the government there. Bitcoin is also beneficial to the governments of the countries where Bitcoin is reasonably regulated, so people feel okay with paying taxes. So I do think that those in power of various countries can also benefit from Bitcoin and it's not merely beneficial to non-governmental agents. But some may not support it because of focusing on a risk, a risk of showing people that they don't need fiat, monetary policies, central banks etc.

[yudi09]

Governments can benefit from Bitcoin. The first benefit that governments will get from Bitcoin is tax revenue. The government can get these benefits with many investors involved.
The government can apply a percent (%) tax on each transaction from an investor's activity on the exchange where the transaction is made.

For example, where I live now, which has implemented tax rates on several exchanges that are registered with communities that are under the auspices of the government, which are regulated by law.

The second benefit is probably the Bitcoin system.
So far, we know that the government banking system still cannot beat blockchain technology.

[so98nn]

Though bitcoin has got nothing to do with the bitcoin in border sense but it has many applications to it. I mean government can easily use bitcoin to overcome the inflation situation such as the current one. Many of us think inflation is due to covid only or wat at one corner of the world etc etc. However, I think it’s because of the westerners printing money out of thin air and without any final calculations to it. If this burden could be shifted to bitcoin and we inject it in main stream then it can easily get huge valuation and peeps can divide their assets, investments between the two. It won’t do much but we will have two options to play within ecosystem of crypto and fiat. I think beyond this there are application such as making bitcoin as main stream currency as well. One can have a currency alongside fiat in the banks to have easier overseas trade and what not. Obviously to make this happen one will need to put efforts in infra. But it’s doable.

[cryptoaddictchie]

Yes its useful in a sense that they could confiscate illegal bitcoin and take over the asset. We all knew its valuable and its likely to be used by government for their funding.

I believe they are just using politics to try to find and control everything. If government can find a way to tax any crypto then they will definitely benefited from it. Its sucks that they criticize so much about crypto and bitcoin but in terms of tax they are onto it.

[Lorence.xD]

There's a lot of factors the benefit of bitcoin to the government, the market of Bitcoin could also affect the economic growth of a country same thing with the Bitcoin, if the economic situation of a country drastically fall, it might affect Bitcoin's worth. Plus Bitcoin's blockchain technology is much convenient to have transaction which could be benefit to it's user and customers. And the fact that Bitcoin is a decentralized system where government can't put taxes on any transactions in crypto if that's possible for them to make it happen then it would benefit them huge. US are already acknowledging Bitcoin so it might happen. Fraud and corruption may reduce as people could control their authority to their funds unlike in a centralized system.

[GigaBit]

When the government can receive tax from using bitcoin, the government will be benefited. Moreover, in this moment there will be no benefit to the government as most of the governments have not legalized Bitcoin yet. Governments will start getting the benefits when various organizations start using Bitcoin after the validation. If governments take a positive view on Bitcoin, they can benefit from using Bitcoin very soon. We all know the country of El Salvador. Government of that country taking various new steps regarding Bitcoin holding and its use case. After a certain period of time, that country will go to earn a large revenue through the use of Bitcoin.

[Smack That Ace]

As far as I know, the government is a completely centralized system, and their power increases as their system become more centralized. While bitcoin is decentralized, it cannot benefit a centralized government system. So it's not too surprising that they don't accept it, but so far, banning it has been largely unsuccessful, and they are turning to another solution which is to introduce regulations for bitcoin. And their goal is to tax, not they will promote decentralization into their centralized system.

[Rexlus]

I think, blockchain can allow a safe and ensure check on whether a person is field as eligible to have particular jobs within the government or not. In summation, the details saved in the blockchain can be used by users to authenticate and prove the capability of any agent with paperwork available to them without answering on third-party companies

 I think for governments to realize the possible benefits of blockchain, they will need to prove,
1) prove of ownership and transfer before any other thing.

[mvdheuvel1983]

Bitcoin will increase people's trust in their government, especially in public office holders in nations with high corruption indices.
particularly those who are in charge of carrying out a major project. Since bitcoin transactions are recorded on a public ledger, it will be simple for citizens to review the ledger and determine whether funds allocated to a project or budgeted for that purpose were actually spent that way or whether they were diverted by a government official for personal gain. These public office holders will be unable to forge financial transactions. Corruption will reduce, and openness, transparency, accountability, and fairness will all be encouraged.

[thecodebear]

The main benefit to the government itself is as a store of value. Governments hold lots of Gold as a store of value. The US Treasury report from a couple years ago says the US Govt and Federal Reserve have about $500 billion of Gold. And obviously Bitcoin is replacing Gold as the worlds store of value so it would make a lot of sense for govts to convert at least some of their gold reserves into Bitcoin.

If nations were smart they would covert even just like 10% of their Gold reserves into Bitcoin. So for the US that'd mean about $50 billion of Bitcoin. Which would obviously within a few years (if they bought today) be worth more than their entire Gold reserves. Of course it will likely be many years before the govt gets smart enough on Bitcoin to actually do this so they will get much less benefit from the growth of Bitcoin.




Of course all govts get the benefit of the taxes from trading of Bitcoin and other cryptos. So it is in the interest of the govt to let the industry grow and flourish. The only reason not to allow this is if the govt is so authoritarian (like China) that they fear the freedom Bitcoin gives to people more than the benefit of higher tax income. And a govt that wants the most freedom for its people would also see the benefit to the country at least, not the govt itself, of allowing people to use a monetary technology that gives so much freedom as Bitcoin does.

Obviously El Salvador which has made bitcoin legal tender and therefore doesn't collect taxes on it doesn't get the increased tax benefit. But they do get the benefit of Bitcoin's long term growth in the bitcoin the govt has bought and will continue to buy for national reserves and the bitcoin they are mining. They also get the benefit of increased tourism because by being the first nation totally accepted of Bitcoin lots of bitcoiners now travel there. And over time, as the people become educated on Bitcoin and Bitcoin usage increases in the country, they get the benefit of moving away from their reliance on the USD and the people getting much more of their money from remittances since Bitcoin is far cheaper to send than what the companies that do remittances charge. I think it was Western Union themselves who said if all El Salvadorian remittances went through Bitcoin the company would lose like $400 million a year or something, and so if that was all done through the LN rather than on-chain so that the fees are near zero that would mean $400 million more each year for the El Salvadorians and so roughly that much for their economy.

The downside to govts is that they are worried about less use of their fiat because people will prefer Bitcoin. Controlling the national currency is a good bit of the govts power so that is a very real fear for the govt, that their power will decrease as Bitcoin's influence and usage increases.


Overall I'd say its a larger benefit to the govt and the people if the govt allows and promotes Bitcoin. They will over time lose some of their power they get through controlling the currency, but the benefits for the people and therefore the country will be large, and if they hold a lot of Bitcoin in reserve then the benefits for the govts reserve holdings will be very large.

[avikz]

There's little benefit for the government to be very honest. Apart from cross border transactions and tax collection from the citizens, there's literally no benefit for the government from crypto adoption.

However, the bitcoin is not getting governments favor due to the fact that they do not control it and bitcoin is pseudo anonymous in nature. So it's highly unlikely that bitcoin and other cryptocurrencies will become greatly adopted and appreciated by any government.

[Obito]

There's little benefit for the government to be very honest. Apart from cross border transactions and tax collection from the citizens, there's literally no benefit for the government from crypto adoption.

You can't say that they won't benefit from it and then listing cross-border transaction and taxation as benefits, that's contradictory, one benefit that I can think of is if the government gets in the market too, doesn't China have a bitcoin too? So I think there's some degree that a government might benefit from it.

[Aikidoka]

I believe that the government could benefit from cryptocurrencies in some ways. However, if they start to track people's transactions and tax them, they will likely get some benefits from Bitcoin. The problem, as @Dave mentioned, is that people do not want to be tracked since the fundamental idea of Bitcoin is to allow people to transact freely without the need for a third party.

In fact, that's what makes it unique, so people feel uneasy about the idea of government tracking.

Nonetheless, if proper regulations are in place, cryptocurrencies can provide benefits to both individuals and governments imo.

Either they should legalize Bitcoin and let people do whatever they want, or they should come up with a good proposition that allows people to use Bitcoin without being tracked but also benefits the government in some way. I think striking a balance between privacy and regulation is really important for the adoption and success of bitcoin and other crypto aswell.

[dothebeats]

Only one word I can think of is 'tax'. It benefits the government, and in a very huge way. While it may be counter-intuitive to be critical of bitcoin and other crypto if you can always collect tax from it, it actually lays the foundation for a lot of things to be established later along the way. It builds confidence on potential investors that can put their money into bitcoin and crypto-related things, which means more money for the government. It will take time, and a lot of back and forth between the regulators and pro-bitcoin, but things will eventually pan out.

[Dzwaafu11]

The government is ignoring bitcoin for various reasons, the most important of which is that they know bitcoin is a very easy way for transactions, so they don't want to accept it because they know that if they allow bitcoin in their state or country, their banks will fail, and the revenue they receive from banks will cease or decrease So, if the government accepts bitcoin, it will eliminate many issues in society such as fraud and other issues. Then it will create a mechanism for the government to receive funds from big successful investors, since I believe they will want to know the successful investors in each country where bitcoin is accepted. They will still like to introduce tax collections for everyone who using bitcoin.

[Hyphen(-)]

As far as I know, the government is a completely centralized system, and their power increases as their system become more centralized. While bitcoin is decentralized, it cannot benefit a centralized government system.

That's exactly what I think also, Bitcoin is decentralized and did not involve any third party while doing Bitcoin transactions, and while sending out your Bitcoin, your identity is hidden, I don't think the government will benefit from the system unless people that use Centralize exchanges.

So it's not too surprising that they don't accept it, but so far, banning it has been largely unsuccessful, and they are turning to another solution which is to introduce regulations for bitcoin. And their goal is to tax, not they will promote decentralization into their centralized system.

Government is always after its own benefit which is why they are finding it difficult to accept Bitcoin fully because they want to impose a tax, that is why they are very serious to put a very high tax on some companies that are using Bitcoin and cryptocurrency so that they can benefit from them.
I am sure government will not fully succeed in banning Bitcoin because so many people globally have embraced Bitcoin and will keep spreading the good news about Bitcoin.