What is the most that governments can do if they decide to regulate wallets?

[Yamane_Keto]

I do not rule out that we will soon hear, you must verify your identity to download bitcoin wallet, and although regulations are not the reason, you cannot download Bitcoin-core in UK, so what is the most that governments can and cannot do?

Can they stop SPV wallets servers?
Track developers of open source code or block access to it.
Issuing a law that prevents employees from downloading these applications, just as it happens with Tik Tok.
That the taxes be valid from a specific wallet.

Or are all these solutions useless

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[Edwardard]

~snip~ you cannot download Bitcoin-core in UK,

You can download bitcoin core even in the UK, but just not from bitcoin.org . You got other sources like the github and bitcoincore.org.
And btw, if you got a VPN access, you can bypass the restriction and download it directly through bitcoin.org

Track developers of open source code or block access to it.

Governments can block centralized exchanges or sites to prevent users from visiting it, but AFAIK they can't block the blockchain or the open-source code in any way. Everyone has access to it.

[BitcoinGirl.Club]

so what is the most that governments can and cannot do?

If they could do anything to stop bitcoin then they would already done it. They tried it for the last 12 years and still trying and the possibility for them to success is becoming slimmer.

For regulating crypto the best approach from the governments will be to work together with crypto. Accept it and work together with crypto entrepreneurs instead of forcing them to not to use it or making it hard to use it.

[BitMaxz]

if you got a VPN access, you can bypass the restriction and download it directly through bitcoin.org

You don't need any VPN you can just change your device DNS to Google or Cloudflare DNS to bypass the ISP restriction. Just like on my internet provider, some Bitcoin-related sites are blocked but by changing the DNS to Cloudflare I can still able to access the website.


They can block some sites like bitcoin.org but there are still many ways to bypass the access VPN or changing DNS should be enough to bypass this.

[logfiles]

I do not rule out that we will soon hear, you must verify your identity to download bitcoin wallet, and although regulations are not the reason, you cannot download Bitcoin-core in UK, so what is the most that governments can and cannot do?

The most likely thing they would do is block or seize the domain that is hosting the downloadable application or try to get the apps removed from app stores like Google Play, but this can still be bypassed through use of VPNs, creation of mirror sites and having the apps available in third party appstores.

Can they stop SPV wallets servers?

Maybe some few but certainly not all. There are many to choose from

Or are all these solutions useless

They are useless when the blockchain is still running, and we have wallets emerging from all corners of the globe.

[Yamane_Keto]

You can download bitcoin core even in the UK, but just not from bitcoin.org . You got other sources like the github and bitcoincore.org.
And btw, if you got a VPN access, you can bypass the restriction and download it directly through bitcoin.org

You don't need any VPN you can just change your device DNS to Google or Cloudflare DNS to bypass the ISP restriction.

The most likely thing they would do is block or seize the domain that is hosting the downloadable application or try to get the apps removed from app stores like Google Play,

I did not mean about ways to bypass the ban, but I wanted to give an example of a country that banned a software wallet.

If they could do anything to stop bitcoin then they would already done it. They tried it for the last 12 years and still trying and the possibility for them to success is becoming slimmer.

For regulating crypto the best approach from the governments will be to work together with crypto. Accept it and work together with crypto entrepreneurs instead of forcing them to not to use it or making it hard to use it.

I do not know, but in the end developers are human beings, no matter how much they love decentralization or privacy, many have families and friends and will not try to continue developing illegal ideas, see what happened with Wasabi wallet or mining pools that have ban US blacklists bitcoin addresses or even theymos and mixing services.

[logfiles]

I did not mean about ways to bypass the ban, but I wanted to give an example of a country that banned a software wallet.

The Bitcoin core case is actually due to a copyright infringement legal battle that came up between the owner of Bitcoin.org and the Fraud Craig Wright. Apparently, the Court in the UK ruled in Craig's favour and so the owner of Bitcoin.org was ordered not to distribute the white paper which was on the website and can also be retried from the Bitcoin core software. So he decided to block the software from being download by the UK residents from his website.

So it's not the UK that banned the wallet, and the wallet is not illegal.

[BitcoinGirl.Club]

If they could do anything to stop bitcoin then they would already done it. They tried it for the last 12 years and still trying and the possibility for them to success is becoming slimmer.

For regulating crypto the best approach from the governments will be to work together with crypto. Accept it and work together with crypto entrepreneurs instead of forcing them to not to use it or making it hard to use it.

I do not know, but in the end developers are human beings, no matter how much they love decentralization or privacy, many have families and friends and will not try to continue developing illegal ideas, see what happened with Wasabi wallet or mining pools that have ban US blacklists bitcoin addresses or even theymos and mixing services.

We don't know what is going to happen in the future but so far so good. Government will always try to keep things harder that does not give them full control. Crypto is such thing for them. But since we have passed 12 long years, we can expect few more coming decades to continue and ultimately a good ecosystem to develop. Crypto Bitcoin is a currency, a virtual idea to trade goods and services. The market decides it's value unlike a group of people who have given power.

Regarding mixers, blacklist addresses?
When you are using your money for crime then you will be targeted and justice will be served. But you don't ban your currency just because someone used it for human trafficking.

[Synchronice]

Oh my god, I couldn't really imagine something like that would happen in real life. Just googled and the reason behind this is that Craig Wright claimed that he is Satoshi. What's wrong with UK justice system?

I do not rule out that we will soon hear, you must verify your identity to download bitcoin wallet, and although regulations are not the reason, you cannot download Bitcoin-core in UK, so what is the most that governments can and cannot do?

There is no way that's gonna happen. Everyone can spread out the software with flash drive, CD/DVD disk, etc. Don't worry about that, that's not gonna happen. By the way, it's the easiest thing to avoid restrictions online, just use a good VPN and your problems are solved.

Can they stop SPV wallets servers?
Track developers of open source code or block access to it.

There is a discussion about that: Risk of jail for developers. Should you be anonymous?

[Edwardard]

What's wrong with UK justice system?

Not to blame just the UK, but the whole world's governments find it hard to understand about bitcoin and its tech (except a few ones). That is why you see those  really weird laws with crypto in most of the countries. All they need is a crypto education which isn't taught in their normal 7-8 hr school times lol.

[Synchronice]

What's wrong with UK justice system?

Not to blame just the UK, but the whole world's governments find it hard to understand about bitcoin and its tech (except a few ones). That is why you see those  really weird laws with crypto in most of the countries. All they need is a crypto education which isn't taught in their normal 7-8 hr school times lol.

I don't think they find it hard to understand about bitcoin. The problem is that they understand it very well and don't know what to do with it, that's why they sometimes make silly mistakes like the one we discuss here.

[boyptc]

All they need is a crypto education which isn't taught in their normal 7-8 hr school times lol.

They prolly have some idea on it but they don't want to dip deeper on it because they might don't like the actual fact that they'll know.

I don't think they find it hard to understand about bitcoin. The problem is that they understand it very well and don't know what to do with it, that's why they sometimes make silly mistakes like the one we discuss here.

Right on, they are aware of it and for sure that they've got someone assigned on it to start knowing that ins and outs of it. And by knowing even a bit of that info, they don't want to go further because it comes against their actual purpose in the society.

Or are all these solutions useless

I'd say that no matter what restriction they put in, everyone who's inclined on it will definitely find a way to avoid these regulations and that's why the governments are stopping by on the phase when it's profit-taking, taxes, etc.

[Ryker1]

What's wrong with UK justice system?

Not to blame just the UK, but the whole world's governments find it hard to understand about bitcoin and its tech (except a few ones). That is why you see those  really weird laws with crypto in most of the countries. All they need is a crypto education which isn't taught in their normal 7-8 hr school times lol.

I don't think they find it hard to understand about bitcoin. The problem is that they understand it very well and don't know what to do with it, that's why they sometimes make silly mistakes like the one we discuss here.

The UK has taken steps to regulate the crypto industry in recent years and we know what is the reason behind this, it means that companies dealing in cryptocurrencies must comply with anti-money laundering and counter-terrorism financing ^[CTF] regulations --and must also obtain a license from the FCA ^{[Financial Conduct Authority]} to operate legally in the UK.
I heard in the news back then about UK justice --one major issue is the problem of access to justice, particularly for those who are economically disadvantaged. So it means people are unable to obtain legal assistance when they need it and I did not surprise by how they treat the cryptocurrency industry.

[yudi09]

-snip- so what is the most that governments can and cannot do?

bitcoin.org a site and they are still very likely to block the site so that users cannot access it, but they cannot stop Bitcoin from before until now even until later as long as electricity and the internet are still in the world.

While they keep trying hard to find ways to limit user login to access things related to bitcoin and crypto, we also have a lot of strategies to get access. One of them is VPN and there are other ways we can do it.

[pooya87]

I wanted to give an example of a country that banned a software wallet.

As far as I remember the case they did NOT ban the software (bitcoin core) in UK, they enforced copyright laws on the paper alone accepting the claims by the scammer regarding his ownership of the paper published by someone else!

As for what governments can do about wallets, absolutely nothing. Bitcoin and its implementations are open source protocol and open source software. Governments can not "regulate" that at all. The only thing they can do is to regulate usage of bitcoin in centralized services. For example they could regulate supermarkets (which they already are) to ask for you to provide an ID if you want to pay with bitcoin!

[hZti]

As for what governments can do about wallets, absolutely nothing. Bitcoin and its implementations are open source protocol and open source software. Governments can not "regulate" that at all. The only thing they can do is to regulate usage of bitcoin in centralized services.

Well they could obviously regulate bitcoin as much as they want, but they could not enforce those regulations! They could easily ban all websites that are suspected to share bitcoin wallet programs and also they could give you some kind of punishment if you are watched with bitcoin wallets on one of your devices. Also they could ban all bitcoin apps from the appstore. Yes this would not destroy bitcoin, but it would definately stop large scale use of bitcoin, since you would loose a lot of average users.
The only question would be if there is any use for the government to do that. Illegal stuff can be done with basically any currency, and it is probably more easy to fight against the actual illegal stuff, then to fight bitcoin. If you fight bitcoin, the illegal stuff will still happen, it will just not be paid with bitcoin. So for that reason I will be sure that all those sanctions on bitcoin will never happen.

(which they already are) to ask for you to provide an ID if you want to pay with bitcoin!

That is very interesting and I have not heard of that. Are there many supermarkets that accept bitcoin and have you paid there already? How did this with the KYC go? What should be the consequence if they report your name after the KYC?

[Yamane_Keto]

Ok, I deleted the UK part. I wanted to take it as an example of the government's approach against the "wallet program" regardless of the reasons, but all discussions were confined to the legal basis for the ban.

So far, we have not heard any government approach against self-custodial open source wallets, and we hope that governments do not impose such restrictions. The weakest point, in my view, is the developers, who must try to hide their identity.

[Pmalek]

That is very interesting and I have not heard of that. Are there many supermarkets that accept bitcoin and have you paid there already? How did this with the KYC go? What should be the consequence if they report your name after the KYC?

pooya87 doesn't look like the type of guy who would undergo KYC and share his personal details with some supermarket chain that probably has no idea how to safeguard such records. Using bitcoin in the UK isn't illegal, so you aren't going to get into trouble for using it. The government want's to tax you when you exit crypto and go back into fiat. That's the reason they are keeping tags.

[taufik123]

That is very interesting and I have not heard of that. Are there many supermarkets that accept bitcoin and have you paid there already? How did this with the KYC go? What should be the consequence if they report your name after the KYC?

pooya87 doesn't look like the type of guy who would undergo KYC and share his personal details with some supermarket chain that probably has no idea how to safeguard such records. Using bitcoin in the UK isn't illegal, so you aren't going to get into trouble for using it. The government want's to tax you when you exit crypto and go back into fiat. That's the reason they are keeping tags.

He wouldn't be that easy to hand over KYC, let alone just making a transaction at the supermarket with Bitcoin payment which shouldn't require any KYC or ID.

The UK government only wants to benefit from every transaction made in crypto.
They tax when someone wants to exit crypto and return to fiat.

Just like in my country Indonesia, the application of crypto tax is getting stricter, and every local Crypto Exchange is required to be under government regulation, so that the government can provide rules regarding crypto tax collection on crypto asset buyers and sellers and also on crypto asset miners.
The only difference with the UK is that cryptocurrency regulation in Indonesia is only limited to commodities, nothing more than that.

[Z-tight]

So far, we have not heard any government approach against self-custodial open source wallets, and we hope that governments do not impose such restrictions. The weakest point, in my view, is the developers, who must try to hide their identity.

They cannot impose any restrictions on open source self custody wallets, governments have their focus on centralized exchanges and services because they know these services are data farms and they follow government regulations, it is also easy for them to trace and seize funds of users because the exchange holds all the keys and they just have to ask.

But it is impossible to regulate an open source self custody wallet, BTC's are stored on the blockchain, so the wallet holds no funds, it only generates the keys which the users hold themselves, how do you regulate and restrict them when they own their funds and can even import it in a different wallet software at anytime, the government are not so foolish, they know what is practicable.