Government acknowledging bitcoin is not always a good thing

[Bastketsrus]

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.

Exactly! Government “acknowledgement” sounds good, but if it’s just for taxes and control, it defeats the whole point of Bitcoin. Not all recognition is real adoption.

[WatChe]

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

If we look at original idea proposed by Satoshi which is P2P electronic cash transfer, the idea eliminates the need of middle men (i.e. the banks) to transfer funds between two entities. The government legislation's are putting the middle men back in place and that destroys the idea proposed by Satoshi. The government approved cryptos are CBDC, which they can control.

We need to understand that decentralised Bitcoin has it's own use cases and is not designed for governments to use as central currency.

[Justbillywitt]

However upon inspection, sometimes you will realize that the government acknowledging bitcoin is not actually a good thing.

Why People are always happy when government of a country acknowledged bitcoin, is because the people in that country can buy bitcoin freely without fear of being harassed by government agencies and other law enforcement bodies when they see people dealing with bitcoin. It is also seen as good thing because they won't be scared of conducting bitcoin transactions in public places. It is seen as good thing because banks can then facilitate the process of purchasing bitcoin, without investors account being frozen. You won't be doing your activities in fear, once bitcoin has been legalized in that particular country.

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.

Government approval doesn't stop any business from accepting bitcoin for transaction purposes. It is left for individuals and businesses to decide if they want to accept bitcoin or not. On the contrary I think government approval gives business owners more confidence in accepting bitcoin as means of payments.

[BALIK]

Governments who were once discouraged from investing in Bitcoin, are slowly becoming interested in it. They have learned from their mistakes. Some governments feel that if they had taken a positive view of Bitcoin earlier, they could have benefited more from Bitcoin investment today. Some governments have already changed their view on Bitcoin. They are now discussing how to become large holders. There may be start a competition in governments on how much Bitcoin they can accumulate. If governments can impose taxes on the use of Bitcoin, they will definitely try their best to legalize Bitcoin.

As OP said, they care and legalize it because they want to tax people who invest in bitcoin, not because they want to invest in it. So far, El Salvador is the only government that uses public money to invest in bitcoin, no other government has invested in bitcoin. They also never expressed regret for not adopting bitcoin sooner. Don't misunderstand or exaggerate the importance of bitcoin to the government, they don't need it as much as we think, their purpose is just to tax and control us more.

In the future, if the government wants to own bitcoin, it means they just want to diversify their national reserves. Governments and central banks do not speculate like us and institutions, they seek safe haven assets to protect their economies. That is why so far, despite many rumors about governments and banks planning to hold bitcoin, sadly no one has done it yet.

[john_egbert]

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

If we look at original idea proposed by Satoshi which is P2P electronic cash transfer, the idea eliminates the need of middle men (i.e. the banks) to transfer funds between two entities. The government legislation's are putting the middle men back in place and that destroys the idea proposed by Satoshi. The government approved cryptos are CBDC, which they can control.

We need to understand that decentralised Bitcoin has it's own use cases and is not designed for governments to use as central currency.

Yep, governments are the bane of decentralization, by their nature.

BTC is for everyone, so we cannot go and say to them - don't try to get more

[Danica22]

Anyone, regardless of their place of residence, has been able to invest in Bitcoin without the approval of any state for the past 16 years. The idea behind Bitcoin is that states cannot stop or interfere with the operation of the Bitcoin network. Personally, I do not see any positive changes in the use of Bitcoin compared to the time when many governments did not regulate the cryptocurrency sector and considered Bitcoin to be an asset that was about to lose investor interest.

What do you think about bitcoin ETFs approval? Do you think we would have billions of dollars flowing into the markets every month without the involvement of institutions like Blackrock? Do you think we, the retail investors, will have enough trillions of dollars to take bitcoin's market cap to $2 trillion? Or can Tesla or Microstrategy freely invest in bitcoin if the government doesn't allow them to do so?

Not stopping there, we are expecting bitcoin price to reach $1 million per bitcoin, I wonder how that can be achieved without government support?

[john_egbert]

What do you think about bitcoin ETFs approval? Do you think we would have billions of dollars flowing into the markets every month without the involvement of institutions like Blackrock? Do you think we, the retail investors, will have enough trillions of dollars to take bitcoin's market cap to $2 trillion? Or can Tesla or Microstrategy freely invest in bitcoin if the government doesn't allow them to do so?

Not stopping there, we are expecting bitcoin price to reach $1 million per bitcoin, I wonder how that can be achieved without government support?

Agreed.

And BTC cannot be "closed" for these entities - it's a game that everybody can enter, so to speak.

[Solosanz]

What do you think about bitcoin ETFs approval? Do you think we would have billions of dollars flowing into the markets every month without the involvement of institutions like Blackrock? Do you think we, the retail investors, will have enough trillions of dollars to take bitcoin's market cap to $2 trillion? Or can Tesla or Microstrategy freely invest in bitcoin if the government doesn't allow them to do so?

Not stopping there, we are expecting bitcoin price to reach $1 million per bitcoin, I wonder how that can be achieved without government support?

Anyone including institutions can buy Bitcoin without asking government permissions.

In centralized exchanges there are two options when you want to create account, for personal or business. Without ETFs approval, as long as the current investors want to buy Bitcoin, it should be same.

Many companies invest in Bitcoin just because of the hype.

[Obari]

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.

I agree with you on this absolutely and I’ve always had this thought because I think that, government acknowledgement of bitcoin has actually limited privacy and given more rooms to KYC and I could remember vividly when there was a raid and ban on exchanges in my country, I had a discussion with a friend and I told him that, exchanges will be back but this time with a more precise and possibly more strict KYC and that was what actually happened and almost all the exchanges operating in my country as centralized and I think we users are even making things difficult for exchanges to be decentralized because people barely trust the decentralized exchanges and rather would preferred the centralized exchanges for their safety and I guess that’s human for us.

Long story short, go covenant acknowledge and support for bitcoin and cryptocurrency isn’t totally a good thing but you know the saying that, every good thing has it’s negative impacts as well.

[Iranus]

Anyone including institutions can buy Bitcoin without asking government permissions.

In centralized exchanges there are two options when you want to create account, for personal or business. Without ETFs approval, as long as the current investors want to buy Bitcoin, it should be same.

Many companies invest in Bitcoin just because of the hype.

As far as I know, large institutions like public companies like Tesla or Microstrategy cannot arbitrarily buy bitcoin or any asset. They are heavily regulated by governments and regulatory agencies, which means they need to be licensed and approved by the SEC. If the SEC rejects, they can't buy bitcoin.

I also believe that without ETFs, traditional institutional investors would not be involved in bitcoin. Yes, they can invest in bitcoin without an ETF and they could have done it years ago. But have you ever wondered, why didn't they do that, why did they only start investing in bitcoin when ETFs were approved and only invest through that?

[BitHodlers]

What do you think about bitcoin ETFs approval? Do you think we would have billions of dollars flowing into the markets every month without the involvement of institutions like Blackrock? Do you think we, the retail investors, will have enough trillions of dollars to take bitcoin's market cap to $2 trillion? Or can Tesla or Microstrategy freely invest in bitcoin if the government doesn't allow them to do so?

Not stopping there, we are expecting bitcoin price to reach $1 million per bitcoin, I wonder how that can be achieved without government support?

Agreed.

And BTC cannot be "closed" for these entities - it's a game that everybody can enter, so to speak.

That is the beauty of Bitcoin right there. Whether you like or dislike someone or something it does not matter, it doesn't give you any power to prevent them from adopting Bitcoin. People can form opinions about this, but they are often worthless as this is one of the core features of Bitcoin. Buying Bitcoin does not give you power over it, regulating Bitcoin does not give you any power either. In fact, it has zero effect on Bitcoin itself. The price and rate of adoption are all externalizations, 1 Bitcoin remains 1 Bitcoin.

I also believe that without ETFs, traditional institutional investors would not be involved in bitcoin. Yes, they can invest in bitcoin without an ETF and they could have done it years ago. But have you ever wondered, why didn't they do that, why did they only start investing in bitcoin when ETFs were approved and only invest through that?

The ETFs and a more Bitcoin friendly government is helping this cause. The previous government in the USA was very corrupt and they were manipulating everything in a bad way. Trump is not perfect, but nothing and nobody is worse than the current democrats.

[CryptoBuds]

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

If we look at original idea proposed by Satoshi which is P2P electronic cash transfer, the idea eliminates the need of middle men (i.e. the banks) to transfer funds between two entities. The government legislation's are putting the middle men back in place and that destroys the idea proposed by Satoshi. The government approved cryptos are CBDC, which they can control.

We need to understand that decentralised Bitcoin has it's own use cases and is not designed for governments to use as central currency.

Are governments bringing middlemen back, are they destroying the idea of ​​Satoshi, or are Bitcoin investors destroying its decentralization?

I see people don't care about decentralization anymore, they only care about price, how to get the best profit...and to help the price increase, they support government intervention, centralized organizations and as you have seen, most of them are happy, cheering every time a country legalizes and issues regulations for bitcoin.

Personally, I wouldn't blame the government entirely, because what is happening is also our choice.

[irhact]

Government approval doesn't stop any business from accepting bitcoin for transaction purposes. It is left for individuals and businesses to decide if they want to accept bitcoin or not. On the contrary I think government approval gives business owners more confidence in accepting bitcoin as means of payments.

Government approval does determine if businesses in the country can accept Bitcoin because when the government doesn't legalize Bitcoin as a currency and you're accepting it, you can be questioned and get accused for money laundering since large amount of Bitcoin cen be laundered in your business. We need the approval of government before any currency can be used legally. As a business owner and you decide to be accepting Bitcoin by the side, you can go ahead but don't make it official in your business until you have verified that's okay with the government. Government support for Bitcoin gives it more legitimacy in the eyes of individuals.

[peter0425]

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

If we look at original idea proposed by Satoshi which is P2P electronic cash transfer, the idea eliminates the need of middle men (i.e. the banks) to transfer funds between two entities. The government legislation's are putting the middle men back in place and that destroys the idea proposed by Satoshi. The government approved cryptos are CBDC, which they can control.

We need to understand that decentralised Bitcoin has it's own use cases and is not designed for governments to use as central currency.

I do not think the initial plan was to make bitcoin replace fiat currency. It is not just possible since fiat currencies are always controlled depending on the needs of a particular country's economy. A lot of people have liked bitcoin so much to the point that they are wanting to make bitcoin the only currency and replace fiat but this would not be possible. Fiat will always exist and bitcoin can co-exist with it offering an alternative way of transacting with others.

[Wapfika]

I do not think the initial plan was to make bitcoin replace fiat currency. It is not just possible since fiat currencies are always controlled depending on the needs of a particular country's economy. A lot of people have liked bitcoin so much to the point that they are wanting to make bitcoin the only currency and replace fiat but this would not be possible. Fiat will always exist and bitcoin can co-exist with it offering an alternative way of transacting with others.

I remember during my early days here in the forum users are claiming that Bitcoin will replace fiat since it’s P2P same @Watche comment. Back then we have no idea what will be the government action when Bitcoin becomes so popular and adopted by many people.

I believe Satoshi wants to create a currency that can be an alternative to fiat that is more convenient and we have total control and privacy to our money.

I agree that fiat can’t be replaced so I believe alternative is the right term since they can co-exist to each other.

[tottong]

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.

In that context we also can't say that bitcoin is not a good thing because on the other hand they get tax benefits through exchanges that implement KYC.
This is a kind of throwing stones and hiding their hands because basically they get tax revenue from exchanges but they seem embarrassed to say it.
For official transactions it might make more sense because they need to maintain the stability of fiat currencies so implementing regulations on that could create problems because we know that bitcoin transactions are much faster and easier to do.

Everything may be related but how can regulations achieve benefits for each rule that is imposed because if not, exchanges will never be given permission to operate in their jurisdiction.

[finaleshot2016]

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

If we look at original idea proposed by Satoshi which is P2P electronic cash transfer, the idea eliminates the need of middle men (i.e. the banks) to transfer funds between two entities. The government legislation's are putting the middle men back in place and that destroys the idea proposed by Satoshi. The government approved cryptos are CBDC, which they can control.

We need to understand that decentralised Bitcoin has it's own use cases and is not designed for governments to use as central currency.

I do not think the initial plan was to make bitcoin replace fiat currency. It is not just possible since fiat currencies are always controlled depending on the needs of a particular country's economy. A lot of people have liked bitcoin so much to the point that they are wanting to make bitcoin the only currency and replace fiat but this would not be possible. Fiat will always exist and bitcoin can co-exist with it offering an alternative way of transacting with others.

The real objective of BTC is to make it as an asset for p2p transaction and right now, it’s playing the role of being a global asset.You don’t need tonreplace something if you want to lead, it’s enough to have a massive adaptation that will make BTC show its greatest potential. Both are different things and have different purposes, our main objective is to make it the leading, no one needs to be stepped by BTC.

[Questat]

Let’s face it, as long as global adoption seems too far to be realized due to government’s opposition, and that majority of the country’s government are still not aligned with bitcoin’s perspective, government acknowledging bitcoin will never create positive impact. That’s the reality so far.

And most likely, they only come to acknowledge bitcoin only to warn the people about its negative effects to their lives, and later on convince the people to put their trust on to them and together they will banned bitcoin, or if not banned, at least they will keep avoiding it.

[skarais]

Let’s face it, as long as global adoption seems too far to be realized due to government’s opposition, and that majority of the country’s government are still not aligned with bitcoin’s perspective, government acknowledging bitcoin will never create positive impact. That’s the reality so far.

And most likely, they only come to acknowledge bitcoin only to warn the people about its negative effects to their lives, and later on convince the people to put their trust on to them and together they will banned bitcoin, or if not banned, at least they will keep avoiding it.

In my opinion, the positive impact that can be expected with clear regulations from a government on bitcoin is that we can use bitcoin legally. The government certainly does not want bitcoin to be a threat to its national financial and economic system, so the regulations that are made must have been well considered so that the new system does not replace the same system. Governments are against decentralization because they are centralized financial systems that can be controlled. Bitcoin cannot be controlled and the governments will certainly try to make the best approach to benefit from it instead of banning it.

Every regulation that is made will certainly have negative and positive impacts. If we are able to find the negative impacts of the regulation, then we should also be able to find the positive impacts. We can never expect the government to be as perfect as possible, that is very impossible.

[Mate2237]

Let’s face it, as long as global adoption seems too far to be realized due to government’s opposition, and that majority of the country’s government are still not aligned with bitcoin’s perspective, government acknowledging bitcoin will never create positive impact. That’s the reality so far.

And most likely, they only come to acknowledge bitcoin only to warn the people about its negative effects to their lives, and later on convince the people to put their trust on to them and together they will banned bitcoin, or if not banned, at least they will keep avoiding it.

That's true most news about Bitcoin from some countries that I have come across is only emphasising on discouraging people about Bitcoin as they try to portray Bitcoin in a bad light, Bitcoin is one thing that I can say that there are lot of interest is due to it fast growing profile and the interest varies some has good interest while others has bad interest.



So trying to make so that you get to know the reason why any government is trying to hype Bitcoin will be important because it will put the interest of the government in perspective