Please stop blaming "the government" for lack of Bitcoin mass payment adoption

[legiteum]

There's a lot of disinformation and incorrect notions going around about the legality of Bitcoin, cryptocurrencies and digital currencies.

Here is a good place to start if you want the facts about Bitcoin's legality:

Legality of cryptocurrency by country or territory

What you can learn from is that for almost all purposes, Bitcoin (and by extension cryptocurrencies and digital currencies) are not meaningfully curtailed by government regulation on individuals. Even China's ban on Bitcoin hasn't stopped Binance from trading $90 billion per month there. Based on this, you would be hard-pressed to find a civilized country where you could be put in jail for owning or trading Bitcoin. They exist, but they amount to a tiny fraction of the world's economy.

And yet in the face of these facts, a near constant refrain from many crypto enthusiasts is that the reason Bitcoin hasn't replaced the world's sovereign currencies like the USD and the Euro is because there's a conspiracy of government regulations to stop it. They can't point to how exactly this works, but more importantly, they seem to ignore the fact that Bitcoin transactions can take 30 minutes to complete and cost 30 US dollars, making the transaction unthinkable for all but a microscopic fraction of worldwide daily transactions. And while more centralized blockchain-based approaches improve this situation somewhat, they are still orders of magnitude away from the scalability necessary, and the key pair requirement for end-users is clunky and makes it hard to adopt.

When I first designed the Haypenny transaction platform, my first task was to calculate the number of monetary transactions going on in the whole world on any given day, and then calculate that number for peak times of the year (e.g. Christmas), and then multiple that by a factor for the peak hours of the day, and then multiplying that by a factor of five to account for "peak-second" loads (yes, my professional background is whole-internet scale systems in case you couldn't tell ).

The number you arrive at when you do these calculations is that you'd need a system that could handle a transaction load in the signal-digit millions of transactions per second if you wanted to replace daily credit card and physical cash transactions worldwide. And you'd need to handle several hundred billion transactions a month.

That is what is required for a currency to replace the current status-quo, and Bitcoin and other blockchain-based cryptocurrencies can't do it, and they can't even get close.

And it should go without saying that transactions would need to cost far less than today's transactions in order to replace the status-quo: people don't make a major change to their long-held behavior unless there is a significant incentive to do so.

And then there's the usage model. Not only does any new technology that replaces the exact functionality of an existing one need to be far cheaper in order to have a chance, it needs to be easier for end-users, too. Requiring every consumer to have a private key is something we've been dreaming about since about 1994 (I was there ), but its a pain in the ass that most consumers don't want to deal with.

These are the reasons there is not mainstream adoption of Bitcoin for everyday payments, not some conspiracy by "the government".

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[kryptqnick]

The Wikipedia article op is referring to can be helpful, but it's important to note that it can be outdated or misinterpret certain things, as well as assume it's legal somewhere when it's just not illegal.
In any case, I agree that the lack of adoption is not on the governments. If we're talking about democracies, laws change actively when there's a strong public demand for something. The demand for Bitcoin as a form of payment is simply not high enough to prompt major changes and adoption. It can change over time, but let's also not forget that Bitcoin blockchain doesn't scale well (I'm talking about the limit of processed transactions per minute and transaction fees when the network gets congested). The op is correct to point at the importance of scalability.
Of course, people here can say that there are alternative, off-chain solutions to address that problem, but then we lose some of that decentralization and financial freedom that came with Bitcoin.

[PytagoraZ]

These are the reasons there is not mainstream adoption of Bitcoin for everyday payments, not some conspiracy by "the government".

However, the fact is that there are still many countries that prohibit bitcoin. In my country, bitcoin can be owned as an asset but not as currency. So anyway, without legality from the government, Bitcoin will remain in a gray area

It seems that currently Bitcoin is still in a "gray" area, even though countries ban it, in fact they are not serious about banning it because the government does not carry out raids or confiscate Bitcoin. It seems like the government is doing this on purpose, because if all countries agree to ban and eliminate the circulation of bitcoin then at least the country can mass close all crypto exchanges.

In my opinion, if bitcoin is legalized as a currency in all countries it will not shift the position of USD because bitcoin has a limited amount and there will be problems with transaction volume as you said, but at least it can be used as an alternative currency in cross-border trade

[_BlackStar]

Not all governments are against bitcoin and its adoption - while many governments support and give permission for its adoption and trading. Some countries do not legalize bitcoin completely - they prohibit its adoption, but allow users to trade and invest in it.

The growth of the crypto industry has very likely pushed governments to open up the space and adjust their regulations to be more profitable – not just for the industry, but also for themselves. I've read that wikipedia article a long time ago and of course there have been a lot of changes that have occurred over time. Legality is a major issue hindering adoption growth – but adoption need not be forced.

[philipma1957]

There's a lot of disinformation and incorrect notions going around about the legality of Bitcoin, cryptocurrencies and digital currencies.

Here is a good place to start if you want the facts about Bitcoin's legality:

Legality of cryptocurrency by country or territory

What you can learn from is that for almost all purposes, Bitcoin (and by extension cryptocurrencies and digital currencies) are not meaningfully curtailed by government regulation on individuals. Even China's ban on Bitcoin hasn't stopped Binance from trading $90 billion per month there. Based on this, you would be hard-pressed to find a civilized country where you could be put in jail for owning or trading Bitcoin. They exist, but they amount to a tiny fraction of the world's economy.

And yet in the face of these facts, a near constant refrain from many crypto enthusiasts is that the reason Bitcoin hasn't replaced the world's sovereign currencies like the USD and the Euro is because there's a conspiracy of government regulations to stop it. They can't point to how exactly this works, but more importantly, they seem to ignore the fact that Bitcoin transactions can take 30 minutes to complete and cost 30 US dollars, making the transaction unthinkable for all but a microscopic fraction of worldwide daily transactions. And while more centralized blockchain-based approaches improve this situation somewhat, they are still orders of magnitude away from the scalability necessary, and the key pair requirement for end-users is clunky and makes it hard to adopt.

When I first designed the Haypenny transaction platform, my first task was to calculate the number of monetary transactions going on in the whole world on any given day, and then calculate that number for peak times of the year (e.g. Christmas), and then multiple that by a factor for the peak hours of the day, and then multiplying that by a factor of five to account for "peak-second" loads (yes, my professional background is whole-internet scale systems in case you couldn't tell ).

The number you arrive at when you do these calculations is that you'd need a system that could handle a transaction load in the signal-digit millions of transactions per second if you wanted to replace daily credit card and physical cash transactions worldwide. And you'd need to handle several hundred billion transactions a month.

That is what is required for a currency to replace the current status-quo, and Bitcoin and other blockchain-based cryptocurrencies can't do it, and they can't even get close.

And it should go without saying that transactions would need to cost far less than today's transactions in order to replace the status-quo: people don't make a major change to their long-held behavior unless there is a significant incentive to do so.

And then there's the usage model. Not only does any new technology that replaces the exact functionality of an existing one need to be far cheaper in order to have a chance, it needs to be easier for end-users, too. Requiring every consumer to have a private key is something we've been dreaming about since about 1994 (I was there ), but its a pain in the ass that most consumers don't want to deal with.

These are the reasons there is not mainstream adoption of Bitcoin for everyday payments, not some conspiracy by "the government".

I am USA based I can send cash for no cost using Zelle.
I do not need to use BTC for sending money in the USA.

Zelle is pretty much irreversible way to send money.

I use it often enough and I know I must be careful and not enter the worth info as I can lose the cash I send.

Does Zelle have weaknesses yes it does.

Does sending BTC have weaknesses yes it does.

But If I am selling something and you pay me with Zelle I am pretty safe.

So I agree with you that btc simpley is not a great way to send money/wealth.

It is  a very good way to get money out of a bad country or a country that becomes bad.

So if you are middle class you should have some in case you need to leave your country.

[BlackHatCoiner]

Bitcoin is not trying to replace the status quo of financial transactions. It kinda began with that motto, but scaling issues didn't take long time to appear.

What Bitcoin is trying to replace, at least from my perspective, is a sociopolitically vulnerable monetary system whereas the state intervenes and monopolizes in money creation. In this new monetary system, people's money is not de-valuated due to a few senators' decisions. It does not belong to a government, and is fully transparent.

That's what Bitcoin trying to replace. (And of course, peer-to-peer cash via the Internet rocks!)

[Oneandpure]

Its normal with some countries regulation prohibit bitcoin as legal currency payment method but giving space bitcoin could be owned assets for investing or trading. Don't panic too much, even though Bitcoin is still prohibited as means of transaction, there is still hope with the number of transactions increasing from year to year and the potential profits gained from implementing taxes on Bitcoin or crypto transactions. I think there are has chance in the future that Bitcoin will be adopted as a legal means of payment.

You can see how drastically increasing with bitcoin or altcoin values transaction every country, the government won't losses bigger opportunity how to get income trough taxes and will make bitcoin become legal currency transaction in the future and make effective with taxes transaction trough bitcoin.

[Rruchi man]

The government is not the main reason, but we cannot deny the fact that they have in some way contributed to it. If the government of many countries are fully in support of it and have in some way promoted the use of bitcoins, bitcoins will be more in use for payments that it is used currently.
 

And it should go without saying that transactions would need to cost far less than today's transactions in order to replace the status-quo: people don't make a major change to their long-held behavior unless there is a significant incentive to do so.

The hardest set of people to convince to change their long-held behavior are the old and advanced. They will not really see any reason to change unless the system they are used to fails them or the new one like bitcoin offers a better incentive like you have said.

[Fiatless]

Bitcoin is not trying to replace the status quo of financial transactions. It kinda began with that motto, but scaling issues didn't take a long time to appear.

What Bitcoin is trying to replace, at least from my perspective, is a sociopolitically vulnerable monetary system where the state intervenes and monopolizes money creation. In this new monetary system, people's money is not devaluated due to a few senators' decisions. It does not belong to a government and is fully transparent.

That's what Bitcoin trying to replace. (And of course, peer-to-peer cash via the Internet rocks!)

This is exactly what is happening in my country where the government wants to control the currency and amount every citizen has in their accounts. The government is forcing the people to use the local currency while they are well aware that the local money is losing value. Bitcoin has helped many of us to keep our money safe from this authoritarian policy.

Bitcoin has also created alternatives for hedging against inflation. Before now people used precious stones like gold and silver to protect their money from losing value during inflation. Bitcoin is now the leading hedge against inflation and many people in my location are adopting it.

[NeuroticFish]

While you are missing the fact that fiat money means central bank IOUs, usually endorsed by governments, hence they will prefer that (for inflation, for example) so no conspiracy needed, you have a valid point on slow confirmation and high costs (although I think that you've exaggerated "a bit" the fee, these days 2$ was enough, but I know the fees were much higher + some do overpay greatly).

Indeed, Bitcoin is not suitable yet for paying on chain at the grocery store of for coffee. On LN that goes well, but LN (or alternatives, who knows) need to make a leap out of their infancy yet.


Sadly, I fear that at the point we can pay for everything with Bitcoin, we will only get to own some satoshis, because others who don't care about current small problem, will hoard it and will use it as reserve currency.
What I mean is that you're right, but you should consider getting over this and still support bitcoin and stack sats.

[teamsherry]

If bitcoin gas fees continue to be this high, bitcoin would only end up as an investment asset forever, many new investors don't even sere bitcoins innovation anymore, they don't care if  was built better than normal fait currency and traditional banking system , all they know if the price would higher and every one screaming bitcoin to moon, 95% of them are all about their gains, very few bitcoin enthusiast actually hold bitcoin for as lovers.

Bitcoin would reach mass adoption, but would they be adopting bitcoin as that's what we should be asking, as envisioned by satoshi or as an investment asset.

[PrivacyG]

So I agree with you that btc simpley is not a great way to send money/wealth.

It is  a very good way to get money out of a bad country or a country that becomes bad.

So if you are middle class you should have some in case you need to leave your country.

These three statements are very sad but unfortunately true.

You can not rely on Bitcoin any more as a replacement for Fiat in case you ever need it.  Because there is no way I would spend such a hefty Fee for a Transaction worth some grocery shopping.  It was fine back when Fees were low.  Not so much now however.

It is a great deal to own Bitcoin if you need to flee the country.  See how Ukrainians got caught with a lot of money on them at the border control.  You can travel with Elon Musk worth of Bitcoin on you and no body would know a thing.  But for daily usage this is totally unreliable nowadays.

[Easteregg69]

So I agree with you that btc simpley is not a great way to send money/wealth.

It is  a very good way to get money out of a bad country or a country that becomes bad.

So if you are middle class you should have some in case you need to leave your country.

It is a great deal to own Bitcoin if you need to flee the country.

I don't get it. Thinking.. You don't get money just of the country just for leaving.

[Upgrade00]

And yet in the face of these facts, a near constant refrain from many crypto enthusiasts is that the reason Bitcoin hasn't replaced the world's sovereign currencies like the USD and the Euro is because there's a conspiracy of government regulations to stop it.

Bitcoin is not replacing the global currencies and was never designed to do so. Bitcoin is a decentralized currency which offers freedom to its holders and an escape from the centralized system. Bitcoin does not want to become the new fiat.

But if it wants to be, the governments would have to approve of it and find ways to regulate it before using it. The scalability issue is one that limits some merchants from using it, but if that was fixed governments would not still approve of it.

[panganib999]

The Wikipedia article op is referring to can be helpful, but it's important to note that it can be outdated or misinterpret certain things, as well as assume it's legal somewhere when it's just not illegal.
In any case, I agree that the lack of adoption is not on the governments. If we're talking about democracies, laws change actively when there's a strong public demand for something. The demand for Bitcoin as a form of payment is simply not high enough to prompt major changes and adoption. It can change over time, but let's also not forget that Bitcoin blockchain doesn't scale well (I'm talking about the limit of processed transactions per minute and transaction fees when the network gets congested). The op is correct to point at the importance of scalability.
Of course, people here can say that there are alternative, off-chain solutions to address that problem, but then we lose some of that decentralization and financial freedom that came with Bitcoin.

I couldn't agree more, my insight lies along the same spectrum as you guys do, although mine particularly leans more towards the lack of action on the government's part. Because let's be real here. Even if you argue that the government of this certain country's not allowing massive crypto adoption because of the fear of hackers becoming prevalent, the fact remains that it is not bitcoin that is driving these hackers to hack, it's the money to be made in the business and they could very well use any other type of payment channel that doesn't involve cryptocurrency and the results would've remained the same. More robust crime-fighting features and less about putting the blame to crypto is what I'm really at.

This isn't to say that crypto is to be blamed for some boo-boos in the past, for instance. Scammers and Ponzi schemers using crypto as their main driver to mobilize their nefarious plans. While the mechanism is pretty much similar to hackers the fault in this case lies upon crypto, considering the fact that it too, lacks features that would disable users from using it as such.

[legiteum]

And yet in the face of these facts, a near constant refrain from many crypto enthusiasts is that the reason Bitcoin hasn't replaced the world's sovereign currencies like the USD and the Euro is because there's a conspiracy of government regulations to stop it.

Bitcoin is not replacing the global currencies and was never designed to do so. Bitcoin is a decentralized currency which offers freedom to its holders and an escape from the centralized system. Bitcoin does not want to become the new fiat.

But if it wants to be, the governments would have to approve of it and find ways to regulate it before using it. The scalability issue is one that limits some merchants from using it, but if that was fixed governments would not still approve of it.

I agree it was never designed to do so, but many people talk as though it will and then thing the sky is falling when, year after year, most of the world still uses traditional sovereign currencies.

Bitcoin and cryptocurrencies in general are not meaningfully restricted. There is nothing, legally speaking, stopping them from supplanting most of the world's daily transactions. As such, I really don't see any evidence that governments like the US government would try to stop a viable digital currency from taking over most transactions. Why would they care? I guess I was never a big believer in the Illuminati .

[Mrbluntzy]

For Bitcoin to become a mass payment method, the government have to approve for it to be possible, if they don't agree, bitcoin will only be available for payment in those countries that have chosen to allow their citizens use it. If you agree with me, for Bitcoin to become a max payment method, the government will have to make it centralized to enable them control it very well. If Satoshi is not dished out, the government can not make Bitcoin centralized. Bitcoin wasn't created to fight against the bank or to fight against cash. Bitcoin is good the way it is.

[thecodebear]

OP, sure, but I mean also it's not like anyone thinks Bitcoin is going to take over every single monetary transaction in the world. If bitcoin were doing 1/1000th of that  I think we could all agree that would certainly count as extremely mature mass payment adoption. It just seems weird you are trying to set that bar as being every single transaction that takes place in the world.

Also, not really fair to say fees are too expensive and blockchain can't handle it, because of course none of this is going to happen on the base layer of Bitcoin. Payments are all going to be done at 2nd layer, centralized networks, side chains, etc. Mostly only large payments, moving a decent amount of money, on-boarding/off-boarding payment solution networks, or batch transactions are going to be on-chain. Obviously nobody is going to be paying an on-chain fee, even if it is only like $2 to buy $20 of groceries.

In terms of the idea that people need something to be extremely convenient in order to use it. Agreed. And while I'm sure there will be millions of people using LN, and perhaps millions of people using other 2nd layers or side chains or whatever, there's also going to be plenty of people just using centralized networks to make bitcoin payments. And yeah hardcore ideologues are going to shout and scream at that but it's simply the reality. Just as there are tons of trades on exchanges for every one on-chain tx that is going to or from an exchange, there are going to be lots of people using corporate bitcoin payment platforms where likely many hundreds or thousands of bitcoin transactions will be taking place for every one on-chain tx to or from those platforms.


Anyway, I don't know who you are referring to as blaming the govt for lack of bitcoin mass adoption lol, but the sorts of people that blame the govt for everything are usually loons anyway.


Of course the MAIN reason why Bitcoin doesn't have mass payment adoption yet is because it doesn't have mass ownership adoption yet, plus most people would mostly use it so save with right now, not spend. You don't get mass demand for payments until (1) there is already mass ownership, and (2) a ton of that user base have been owning bitcoin for a long time so that they've seen lots of appreciation and feel okay starting to spend it, and probably (3) bitcoin price appreciation has slowed down to earthly level so that it becomes a bit more reasonable to spend bitcoin rather than only save it.


Mass payment is the end game for bitcoin - it is the final stage of bitcoin adoption as it grows organically from one person to mass adoption. You have to go through all the other stages first, namely, (a) risky tech invention, (b) get rich quick scheme, (c) super good investment, (d) store of value / savings, (e) payments. Payments is the final step. Step "a" was like the first couple years of bitcoin's existence. Step "b" was pretty much 2013 through 2017 or perhaps through 2021 but by 2021 pretty much all the get-rich-quicker people has switched over to NFTs and meme tokens or just any newly created random altcoin. Step "c" started in the get-rich-quick phase and continues through today, and nobody is going to want to be spending bitcoin while bitcoin is such an insanely good investment to hold. Step "d" is of course already taking place but we're still mostly in step "c", as its mostly long time bitcoiners who understand its not just a real good investment but is how we should all be saving money that it'll store value long term, but we've still got many years to go until bitcoin is fully out of step "c" and gets far enough along in step "d" that we can even start talking about step "e", payments, being a real use case. I'd say this decade is mostly going to be "investment" phase, next decade "store of value / savings" phase, and by the 2040s I think we'll see the payments phase really get going in a large way. We'll gradually see major retailers start accepting bitcoin, online well before in-person, and that'll probably start maybe late this decade but probably mostly next decade, but I would expect the actual usage numbers of that payment option at merchants to be low until probably the 2040s. Having a novel currency grow organically from one person to mass payment adoption will absolutely take decades, and we're only 1.5 decades in now so there's still a long way to go. And yeah, it's got nothing to do with people's govt conspiracies or whatever you are referencing in your post.

[yhiaali3]

Here we have two financial systems, one is old and has speed and low fees, but its problem is centralization and lack of privacy, and the other is modern, it lacks speed and low fees, but it has decentralization and privacy. Which one will you choose?

Of course, governments will choose the first system because it suits their authority and centralization perfectly, while I think most users will prefer the other system, which enjoys decentralization and privacy, because it suits them more.

So what is the solution ? Is it possible to have one system that suits the government and the people at the same time? The question is: If we get one system that is fast, low-fee, decentralized and private, will governments agree to adopt?

The question is in another way: If Bitcoin were developed to solve all these problems and we obtained the required speed and low fees, would governments agree to adopt mass payments with Bitcoin?

[CODE200]

I'm not blaming them or anything, in fact I like the idea that the government is nonchalant about bitcoin adoption and that it slowly creeps under their noses because that way, we can all just not worry about them thus making us achieve freedom from all control from them plus having the government in the bitcoin space is something that many of us wouldn't like to happen because they're definitely going to be putting in a lot of their regulations in hopes of controlling their citizens that are using bitcoin plus the taxes that you're avoiding for a long time is going to be a thing for you now that the government is involve so no I don't blame them, I like to thank that they're as disconnected to this as possible.

One good example of why the government isn't a necessary thing for mass payment adoption is China, the CCP is always meddling with the people that are using bitcoin there, they seize a lot of mining operations there and they made it clear that they're the only one that should be doing all that mining and that anyone there trying to get into bitcoin is either under heavy restrictions and guidelines or they're outright having problems with the government.