Government acknowledging bitcoin is not always a good thing

[peter0425]

We often deliver news about a certain country acknowledging bitcoin or cryptocurrencies and immediately assume that it is good news because finally they will have clear regulations when it comes to crypto. Another reason why this is considered a pro is because people trust bitcoin more and thinks of it as official when endorsed by the government.

However upon inspection, sometimes you will realize that the government acknowledging bitcoin is not actually a good thing. First of all, the government's acknowledgement is limited to only being a speculative asset and not as a currency that can be used for official transaction. Second, their rules and regulations usually include AML and KYC which totally strips away investors' privacy and disregards decentralization. Third, governments only acknowledge bitcoin to implement high taxes which only drives investors away.

So at the end, not all kinds of acknowledgement is good.

[OcTradism]

Their rules and regulations usually include AML and KYC which totally strips away investors' privacy and disregards h. Third, governments only acknowledge bitcoin to implement high taxes which only drives investors away.

Governments are not always good and create many setbacks for their citizens. Their central banks are root causes of fiat currency inflation and recession so let's ignore their bad words of mouth about and against Bitcoin.

Bitcoin is itself and its blockchain existence is for everyone to use, including good and bad people. Nevertheless, it is not convincing reason to attack Bitcoin and make it as a bad one and likely to be used only by criminals.

AML and KYC are tools for governments but can not help to protect their citizens from privacy to safety.

Why KYC is extremely dangerous - and useless.

[pooya87]

Centralized authorities are not known to mix well with decentralized networks. They always seek control and surveillance which always translates into more restrictions. It can be more severe when we talk about Bitcoin which is a payment system that they will definitely want to control.

It's not just AML/KYC nonsense targeting the "investors" but it can be more severe than that trying to surveil and restrict the network itself by doing thins like demanding miners follow some oppressive censorship laws, forcing nodes to comply with same KYC nonsense, forcing developers to make changes they demand, and other crazy things like that.
Regardless of how successful these attempts can be (which are very difficult in a decentralized network) they can still be disruptive and damaging.

[Rashlyowl]

(1) BTC is not money, that is an asset.
(2) There are AML, KYC & centralized.
(3) Government just wants taxes.

Those 3 points are the conclusion of your thread, you are one of those who have a negative view on this. Yes, government involvement is not always good, but it is not always bad either. Did you know according to Bitbo data, more than 3,5% of the BTC supply is held by public companies?



Based on the same data, the top 5 public companies are based in the US.



Their role in buying BTC is because of regulatory support, if the US had banned crypto, I don't think we would have reached $100,000 by now. We have to be honest that the actions of those public companies influence people to believe in BTC & that is what makes BTC surpass Aramco, Meta & Silver in market capitalization now.



Don't blame external parties, if you feel the government is doing something bad with their KYC & AML, never use CEX or another centralized entities.

[₿itcoin]

Dude, you know Satoshi gave us hope, keep the sovereignty untouched by using Bitcoin. But while govt starts intervening in bitcoin holding, trading, and mining bitcoin, they are just attempting to hunt the sovereignty of Bitcoin in the first place.

As pooya87 said, govts centralized control over decentralized systems forces us to do KYC for nodes, also they are raising censorship pressure on miners, even core developers. Actually, they are not satisfied in any way, they want to keep every step of the individual under surveillance. I'm not against regulation. Some regulation might be inevitable for the vast adoption of Bitcoin, but that should be limited to the institutional and corporate levels. should not interfere at the individual level.

[nemesis_incarnate]

It's inevitable, it was, and will be - adoption of BTC would be well with or without govs stepping out, however, they are speeding these processes up, in exchange for their cut and influence.

[justinlamode]

Government acknowledging Bitcoin is supposed to be a good thing but in reality, they will come up with regulation which defeats the purpose of Bitcoin. Another thing that happens with government recognition of Bitcoin is the purpose of taxation, just like you rightly stated, although I don't have much problem with that because taxes are for the development of the country. What I only find uncomfortable is that when the government acknowledges Bitcoin, they will want to control it like they do with fiat, that is basically how the government operates.

[Ruttoshi]

Anything that the government gets involved in is not because they like it or want to promote it but because they want to get control over it. Government have tried their best in the past to see how they can take down bitcoin by spreading FUD but they didn't succeed because it's decentralized and solves some unique problems.

As the rate of adoption increases, the government have come back again to bitcoin to see how they can control it by censorship and go against any service that supports the privacy of bitcoin. Their involvement is all about their selfish interests to see how they can stylishly control it and put everything about bitcoin in their surveillance but I believe that it wouldn't work.

[Fiatless]

So at the end, not all kinds of acknowledgement is good.

Majority of investors are just concerned about the price of Bitcoin. That's why they will acknowledge the government and institutional investors for the increase in the price. But people who care about privacy are concerned because this move is driving Bitcoin system towards centralization. I am afraid that we might be heading to an era where the government will increase censorship of miners and force Bitcoiners to obey KYC rules before they can engage on any transaction.

[Ishicryptic]

Centralized authorities are not known to mix well with decentralized networks. They always seek control and surveillance which always translates into more restrictions. It can be more severe when we talk about Bitcoin which is a payment system that they will definitely want to control.

It's not just AML/KYC nonsense targeting the "investors" but it can be more severe than that trying to surveil and restrict the network itself by doing thins like demanding miners follow some oppressive censorship laws, forcing nodes to comply with same KYC nonsense, forcing developers to make changes they demand, and other crazy things like that.
Regardless of how successful these attempts can be (which are very difficult in a decentralized network) they can still be disruptive and damaging.

Anyhow we choose to define government it always ends with authority and centralization, so anything that goes against these principles are considered to be rebellious and they will by all means try to regulate it. Bitcoin is decentralized and goes against this principles of centralized control therefore any involvement by a government in holding it as a reserve or being crypto friendly should be viewed with skepticism. They will come up with all sorts of crypto regulations to subdue Bitcoin decentralization in their domain.

Cryptocurrency is not banned in my country yet there are lots of restrictions on crypto transactions, some top crypto exchanges have disabled their p2p services in the country because of government regulations and allegations, our Central Bank has prohibited our banks from facilitating crypto transactions. The undertone is that they are not comfortable with what they annot control and they give unfounded excuses that money laundering goes through exchanges, forgetting that most scams scams go through the centralized banking system.

[Helena Yu]

I'm not sure if we talks about tax, most likely they don't have a specific implying tax rate for Bitcoin, they would consider the gain of Bitcoin as income tax. As we know income tax is high, AFAIK tax for capital gain is lower.

I also not agree with the first one, many countries who accept Bitcoin as an asset didn't make Bitcoin is illegal as a currency, check this site https://en.wikipedia.org/wiki/Legality_of_cryptocurrency_by_country_or_territory

But I do agree if government acknowledging Bitcoin isn't always good.

[FortuneFollower]

So at the end, not all kinds of acknowledgement is good.

Majority of investors are just concerned about the price of Bitcoin. That's why they will acknowledge the government and institutional investors for the increase in the price. But people who care about privacy are concerned because this move is driving Bitcoin system towards centralization. I am afraid that we might be heading to an era where the government will increase censorship of miners and force Bitcoiners to obey KYC rules before they can engage on any transaction.

What we can do about it? Only watch how it all unfolds.

[alani123]

I think the way El Salvador treated its bitcoin wealth building is a good example of why mixing state and bitcoin can be a very bad thing.

El Salvador did very little to help the masses of the people in the country. Poverty remained rampant, state infrastructure wasn't improved and individual freedoms also took a big nosedive.

Changing monetary policy alone will do jack shit to improve the people's lives. El Salvador, which is hailed as a prime example of "bitcoin success" is now a textbook example of this. The country is still ruled by an autocrat, its prisons became some of the world's most brutal in record time, due process was abolished... This isn't the future people should envision for bitcoin. Because if Trumpism becomes the norm for BTC, we're screwed.

Bitcoin is just going to make things worse if it gets associated with these traits.

[melinoe]

^ BTC is associated by the people.

It's still on its own - it's just that people all around it become interested in it more - good or bad, BTC doesn't care.

[guybrushthreepwood]

We often deliver news about a certain country acknowledging bitcoin or cryptocurrencies and immediately assume that it is good news because finally they will have clear regulations when it comes to crypto. Another reason why this is considered a pro is because people trust bitcoin more and thinks of it as official when endorsed by the government.

However upon inspection, sometimes you will realize that the government acknowledging bitcoin is not actually a good thing. First of all, the government's acknowledgement is limited to only being a speculative asset and not as a currency that can be used for official transaction. Second, their rules and regulations usually include AML and KYC which totally strips away investors' privacy and disregards decentralization. Third, governments only acknowledge bitcoin to implement high taxes which only drives investors away.

So at the end, not all kinds of acknowledgement is good.

It's a double edged sword. If you want bitcoin to be recognized by the state then you're going to have to play by their rules and generally speaking I'd rather them be pro bitcoin than anti bitcoin and therefore try to ban it and we'd all be screwed then. The good thing is is you can still choose whether you want to comply with AML or other such procedures and if you don't there are ways around doing so so you can still have and use bitcoin in the way you politically want to do so, but be aware there may be legal consequences for doing that. One positive aspect of them accepting or legalizing it properly is that the price is likely going to continue to rise in terms of dollar value and without government acceptance I don't think it would be where it is now.

[betswift]

Anything that the government gets involved in is not because they like it or want to promote it but because they want to get control over it. Government have tried their best in the past to see how they can take down bitcoin by spreading FUD but they didn't succeed because it's decentralized and solves some unique problems.

As the rate of adoption increases, the government have come back again to bitcoin to see how they can control it by censorship and go against any service that supports the privacy of bitcoin. Their involvement is all about their selfish interests to see how they can stylishly control it and put everything about bitcoin in their surveillance but I believe that it wouldn't work.

I agree on the control part - but it cannot be avoided, in fact, because BTC is for everyone - and governments are their own party with interests too.

And they play it out safe, little by little.

[michellee]

@OP, you are right and that is what happened now. With many local exchanges, the government force its citizens to do KYC and report it to them. We can not deny that because if we don't do that, they can easily judge us breaking their law and we will get in trouble.

We lose privacy when the government apply KYC to us but we can not do anything. In the future, we may see stricter regulation from the government especially if Bitcoin prices soar to the very highest price. The government will think that more money come to them from the Bitcoin user tax.

So besides good news, there will be bad news for us.

[henry_of_skalitz]

@OP, you are right and that is what happened now. With many local exchanges, the government force its citizens to do KYC and report it to them. We can not deny that because if we don't do that, they can easily judge us breaking their law and we will get in trouble.

We lose privacy when the government apply KYC to us but we can not do anything. In the future, we may see stricter regulation from the government especially if Bitcoin prices soar to the very highest price. The government will think that more money come to them from the Bitcoin user tax.

So besides good news, there will be bad news for us.

It's a double-edged sword.

You trade regulated and legal ways to go around with KYC and other stuff like that, because government = control, as it was outlined..

[Fiatless]

So at the end, not all kinds of acknowledgement is good.

Majority of investors are just concerned about the price of Bitcoin. That's why they will acknowledge the government and institutional investors for the increase in the price. But people who care about privacy are concerned because this move is driving Bitcoin system towards centralization. I am afraid that we might be heading to an era where the government will increase censorship of miners and force Bitcoiners to obey KYC rules before they can engage on any transaction.

What we can do about it? Only watch how it all unfolds.

Absolutely nothing bro. We cannot stop the government from using Bitcoin as a reserve. Corporate organisations will keep accumulating and we cannot intervene. But we can choose to enjoy freedom as long as it lasts by using only decentralized platforms and privacy tools. We can also enlighten people that they can use Bitcoin without any third party.

[ultrloa]

We often deliver news about a certain country acknowledging bitcoin or cryptocurrencies and immediately assume that it is good news because finally they will have clear regulations when it comes to crypto. Another reason why this is considered a pro is because people trust bitcoin more and thinks of it as official when endorsed by the government.

However upon inspection, sometimes you will realize that the government acknowledging bitcoin is not actually a good thing. First of all, the government's acknowledgement is limited to only being a speculative asset and not as a currency that can be used for official transaction. Second, their rules and regulations usually include AML and KYC which totally strips away investors' privacy and disregards decentralization. Third, governments only acknowledge bitcoin to implement high taxes which only drives investors away.

So at the end, not all kinds of acknowledgement is good.

Not a good thing for instances that we will be force to do those strict KYC requirements and we upload facial recognition every time we do transaction using the local platforms we currently used.

This is really the disadvantage of government intervention and regulation since with their presence we already lose our privacy due to that matter.

But we cannot do anything with those implementation since those situation is mandatory and we need to follow those requirements they asked us to comply. Government is there just to manipulate us that's and people need to be more careful on other more implementation done by their officials.