Why do Government Need Bitcoin?

[NovaCrest]

Is it possible that governments wants a piece of Bitcoin to control or manipulate other assets or stocks?? Stay with me here, you know how Bitcoin responds to all these political rantings or government regulations and price always signals the sentiments of what other investors think of the new developments... What if the government could use Bitcoin to misdirect an agenda to paint a picture that investors are in support of something... What if the government wants to use Bitcoin to control the stock markets indirectly because today these assets are behaving like linked asset's...

That's an interesting and sharp observation. Youre right governments and big institutions have definitely noticed Bitcoin's influence on market sentiment.
Could they try to manipulate it? Possibly. They have the resources to buy large amounts and create "signals" with big trades or timed announcements. Weve seen similar tactics in gold, bonds, or even social media.
But heres the good part: Bitcoin is hard to control long-term. Its supply is fixed, transactions are public, and no single entity can print more or reverse transactions. Even if a government bought a lot, they can't stop others from buying, selling, or using it freely.

So while they might try to use Bitcoins price moves to influence sentiment short-term, they cant own or control the network itself. The more they get involved, the more they validate it and the harder it becomes to truly manipulate.

[PrivacyG]

-> Censorship-Resistance. It will probably need an alternative financial system as a back-up/fall-back in case their banks get censored from SWIFT.

It is so much more to it than this.  If they simply needed an alternative, they would create their own Currency that they would use mainly between the countries that are censored from SWIFT.  But Bitcoin can do what an alternative can not, it is globally accepted, many still treat every Satoshi fungible and do not care to look for the invented 'Taint' concept and it can not be taken down either.  Shut down the grid of Russia, The United States, India and China and Bitcoin still exists AND works.  It can do no other Currency ever invented could and it does not have any of the points of failure other Currencies have.  There are no institutions somebody can take over to control how much Bitcoin is printed, there is no politician you can tie down and force to change the economy of Bitcoin.  This is why in my opinion it will never be 'unwanted' by Governments.

[serjent05]

Someone said something on Altcointalk and it got me thinking why do government need Bitcoin?

No, the government does not need Bitcoin.  The government might need the technology behind Bitcoin, the blockchain technology, but even without it, the government can smoothly proceed with its activity.

By adopting the technology, the government does not need to adopt Bitcoin or make a stock of it, they can just create their own blockchain technology unique from Bitcoin but with the principles and features of Bitcoin.  It is not hard because the Bitcoin source code is open to everyone.

[Queen uloma]

Why government need Bitcoin is because Bitcoin it self has made people without bank account to receive money and also send money, which in the other hand it's really helping the government, the government also can use Bitcoin to collect tax from the citizens, even during any crisis or emergency Bitcoin can still operate very well even more than banks., if the government decide to use Bitcoin or any other asset, you will see that the stress and frustration that banks give us will stop, because nobody will be on the queue for any reason.

[Fuso.hp]

Fiat is losing trust from its people. Even the USD is not guaranteed to be always in power. Neither will the next fiat to dominate. No currency will always be on top but bitcoin exists outside of this whole fiasco which makes it more reliable for countries. Knowing that they will be fine as long as they have bitcoin no matter what happens with fiat.

The government does not need to make any decisions based on fiat currency because they themselves control fiat currency. The main point here is that the government wants to control and dominate everything. If in the future the price of Bitcoin increases a lot and it becomes acceptable to all kinds of people. Then if the government does not have Bitcoin, then they will suffer. The crypto-based assets will be reduced. Most of the control will be in the hands of the common people. No government wants to let this happen.

It is more important to keep up with the times, where developed countries are directly approving the use of Bitcoin in their countries and are making many decisions about Bitcoin, the governments of developing countries also think about these issues and they also decide to buy Bitcoin. Basically, the way an investor thinks about his investment, the government of a country also thinks about Bitcoin investment. The main purpose of our investment is to hold it for a long time and ensure a good amount of profit at the end of a certain period. Now, instead of leaving excess funds in the reserve fund of a country, if they buy Bitcoin and keep it for a few years if that Bitcoin gives them a good amount of profit, then it is good for the economic condition of any country and everyone wants this development of the country, I hope, that is why the governments of different countries are buying Bitcoin thinking about these issues.

[HONDACD125]

Why government need Bitcoin is because Bitcoin it self has made people without bank account to receive money and also send money, which in the other hand it's really helping the government, the government also can use Bitcoin to collect tax from the citizens, even during any crisis or emergency Bitcoin can still operate very well even more than banks., if the government decide to use Bitcoin or any other asset, you will see that the stress and frustration that banks give us will stop, because nobody will be on the queue for any reason.

And why would the government want its citizens to start using Bitcoin and abandon banks? Because if people actually start using Bitcoin more than banks, either for storing their money or for making transactions, the governments will only lose control over their finances and financial holdings and I don't think they would like that. For taxes, they don't specifically need to use Bitcoin because they can tax the citizens more easily if there are no cryptocurrencies involved, especially cryptocurrencies like Bitcoin which allow and promote decentralization.

Even if they put a lot of regulations, they will still not be able to tax transactions or holdings from non-custodial wallets if their users know how they can keep their wallets private and anonymous, because if your wallet has no traces that leads them to another centralized platform with your identity, they can never know it's your wallet, so they won't be able to tax you for your holdings or transactions, etc.

[melinoe]

That’s a realistic take. Governments are fine with systems they can monitor and control, and banks give them exactly that. Bitcoin, especially when people use self-custody properly, takes a lot of that control away, which explains the resistance. They may regulate it or use it selectively, but fully replacing banks doesn’t really fit their interests

Yep. They would only allow it for as much as to control what they can, the people that use it - too.

[Hatchy]

Someone said something on Altcointalk and it got me thinking why do government need Bitcoin?
Yes I'm genuinely curious. I'm not talking about generic answers like making a strategic reserve or the likes
Something that would make them neglect the fact that Bitcoin is decentralized and doesn't need a Central Authority.

Every country wants to be a major player in the latest technology, aiming to dominate others with a competitive edge.
Cryptocurrency has been a major topic of discussion for several years. Governments initial views on Bitcoin were widely known to be completely unacceptable. It makes one wonder what changed their minds. Now, not only do they want to be involved with Bitcoin, but they even wish to make it a reserve currency.
The motivation is clearly a desire for control. They aim to reassure the public about a system that many had previously denounced as a failure. Their intention is to leverage this technology to address national economic issues. They may frame this as a simple act of adoption, but their fundamental interest in Bitcoin is well understood

[taufik123]

-snip-
So in regards to what they say or what they do or the kinds of policies and/or practices that might come about, we are going to have various governments speaking out of both sides of their mouths, whether they purport to be in favor of bitcoin or not, many times, they might be in favor of only a certain kinds of bitcoin (or certain visions of what they believe bitcoin is or should be), even though they may well prefer to try to un-invent bitcoin (or un-discover it) which does not seem very practical, even if some governments might try to pursue various kinds of draconian paths in regards to bitcoin... or maybe smile on the outside while dividing and conquering certain bitcoin players, and/or arresting/jailing certain kinds of bitcoin persons (such what seems to be taking place with the Samurai developers).  Surely Ross Ulbricht's situation was an injustice, even though he was released from jail around 12 years after getting put there.

I agree with you that the attitude shown by the government is indeed often ambiguous and even too contradictory.
The "two sides of the mouth" behavior towards the government is not just an inconsistency,
it is a false initial framing because Bitcoin is not a digital currency that can be chosen or rejected as usual policy because Bitcoin already exists enough, is known globally and is permissionless.

Thus, the government's involvement is not only because it requires Bitcoin,
but Bitcoin makes a real impact on the systems that have been managed by the government such as the financial system, taxation, capital control and law enforcement.

If the government ignores Bitcoin then it will push the system into a dark area and if it bans it too harshly or provides regulations that are completely prohibitive then it will not be effective,
therefore the government has an ambiguous attitude towards Bitcoin, sometimes friendly,
sometimes repressive and then Bitcoin will adapt to the rules of the government and the government will be forced to adapt to the reality of Bitcoin.

The government arrested some of the actors, some of the developers of the Bitcoin wallet,
just to let them know that they still have full control even though Bitcoin literally cannot be controlled by anyone completely.

[laijsica]

-snip-
So in regards to what they say or what they do or the kinds of policies and/or practices that might come about, we are going to have various governments speaking out of both sides of their mouths, whether they purport to be in favor of bitcoin or not, many times, they might be in favor of only a certain kinds of bitcoin (or certain visions of what they believe bitcoin is or should be), even though they may well prefer to try to un-invent bitcoin (or un-discover it) which does not seem very practical, even if some governments might try to pursue various kinds of draconian paths in regards to bitcoin... or maybe smile on the outside while dividing and conquering certain bitcoin players, and/or arresting/jailing certain kinds of bitcoin persons (such what seems to be taking place with the Samurai developers).  Surely Ross Ulbricht's situation was an injustice, even though he was released from jail around 12 years after getting put there.

I agree with you that the attitude shown by the government is indeed often ambiguous and even too contradictory.
The "two sides of the mouth" behavior towards the government is not just an inconsistency,
it is a false initial framing because Bitcoin is not a digital currency that can be chosen or rejected as usual policy because Bitcoin already exists enough, is known globally and is permissionless.

Thus, the government's involvement is not only because it requires Bitcoin,
but Bitcoin makes a real impact on the systems that have been managed by the government such as the financial system, taxation, capital control and law enforcement.

If the government ignores Bitcoin then it will push the system into a dark area and if it bans it too harshly or provides regulations that are completely prohibitive then it will not be effective,
therefore the government has an ambiguous attitude towards Bitcoin, sometimes friendly,
sometimes repressive and then Bitcoin will adapt to the rules of the government and the government will be forced to adapt to the reality of Bitcoin.

The government arrested some of the actors, some of the developers of the Bitcoin wallet,
just to let them know that they still have full control even though Bitcoin literally cannot be controlled by anyone completely.

A significant reason for the ambiguous position of governments is their inability to enforce control over this asset. The government is not able to deliberately remove this system and fully accept it. But from the outside we understand that they are inflexible towards Bitcoin.

Although not a large number of countries, the number of Bitcoin holders in many countries is in the double-digit percentage or close to it. The government's fear is that the digital form of fiat is entering an uncontrolled financial system that will cause a crisis of fiat. But most of the time it is not trying to see the increase in wealth in a positive light. Most of the financial system is correct which is equivalent to the transformation into digital gold but the main problem of the government is the inability to control.

The repressive mechanisms are already failing, as the public gradually increases the level of Bitcoin adoption and considers alternative digital gold, this reality will clearly force the government's decision to raise it to the level of acceptance.

[Wind_FURY]

Someone said something on Altcointalk and it got me thinking why do government need Bitcoin?
Yes I'm genuinely curious. I'm not talking about generic answers like making a strategic reserve or the likes
Something that would make them neglect the fact that Bitcoin is decentralized and doesn't need a Central Authority.

I believe not all countries/nation-states/governments need Bitcoin, BUT if your government is under an "anti-imperialist" regime, then it would PROBABLY need Bitcoin.

Why?

-> Censorship-Resistance. It will probably need an alternative financial system as a back-up/fall-back in case their banks get censored from SWIFT.

Or if you are too imperialist, it would work out too

?

How?

If you're "too imperialist", you want a currency that you can control absolutely. What can this "too imperialist" government do if it says not to send/donate Bitcoin to an address controlled by a peaceful protest group, and users still donate to that group? What can it do if it says to stop buying Heroine from the Dark Markets, but users still buy Heroine from the Dark Market?

It has been more than TEN YEARS and Bitcoin transactions have never been censored.

[Rubuchi]

Someone said something on Altcointalk and it got me thinking why do government need Bitcoin?

No, the government does not need Bitcoin.  The government might need the technology behind Bitcoin, the blockchain technology, but even without it, the government can smoothly proceed with its activity.

By adopting the technology, the government does not need to adopt Bitcoin or make a stock of it, they can just create their own blockchain technology unique from Bitcoin but with the principles and features of Bitcoin.  It is not hard because the Bitcoin source code is open to everyone.

sometimes I used to assume that the government has even acquired enough bitcoin across different countries in the hidden, since the bitcoin is not like the fiat currency even the government is sure of it thriving and if not for anything they will want to have a backup plans too. I am sure government knows very well that they need it and as a result They ate investing in it in the hidden

[Popkon6]

sometimes I used to assume that the government has even acquired enough bitcoin across different countries in the hidden, since the bitcoin is not like the fiat currency even the government is sure of it thriving and if not for anything they will want to have a backup plans too. I am sure government knows very well that they need it and as a result They ate investing in it in the hidden

In countries where Bitcoin is not legal, the governments of all the countries may secretly invest in Bitcoin, this may be a step to improve the economic condition of their country. But you can see in reality that the governments of different countries have accepted Bitcoin as a strategic reserve because they hold this Bitcoin to eliminate the economic shortage of the country. Because Bitcoin is digital gold, Bitcoin has become widely known in this current era and Bitcoin is used secretly and openly in almost every country. If you have noticed, then you will definitely be convinced that all the countries that have accepted Bitcoin as a strategic reserve have been able to succeed economically.

[AprilioMP]

Someone said something on Altcointalk and it got me thinking why do government need Bitcoin?
Yes I'm genuinely curious. I'm not talking about generic answers like making a strategic reserve or the likes
Something that would make them neglect the fact that Bitcoin is decentralized and doesn't need a Central Authority.

Because governments are generally aware of Bitcoin as the best hedge that when they hold Bitcoin as a reserve it will not make them lose value in the long term. When countries generally use gold as a reserve, then what makes them do it and the answer is hedging. Fiat currency with an economic system will at a certain point experience inflation which disrupts the economic system so that by having reserves such as gold, it is possible for them to do something with it.

Trump, on x's home page I found his video saying Bitcoin was something that was born along with the birth of the internet. The point is not that, but the history of Bitcoin until now has proven to be a hedge so it is not surprising that America and other countries are planning and proposing to make Bitcoin a reserve.

[Cryptmuster]

Someone said something on Altcointalk and it got me thinking why do government need Bitcoin?
Yes I'm genuinely curious. I'm not talking about generic answers like making a strategic reserve or the likes
Something that would make them neglect the fact that Bitcoin is decentralized and doesn't need a Central Authority.

Among governments, this is not a widespread phenomenon at the moment. If we look at official sources and official statements, only a few countries show interest in Bitcoin. And note that it all started when they confiscated Bitcoin, held it for some time, and saw the advantage of holding it, when you keep an asset and it grows in value.

Of course, there are countries like El Salvador, which buys Bitcoin on a regular basis, or Bhutan, which mines Bitcoin and also accumulates it quite effectively. But if we take examples like the United States and similar countries, they only confiscate Bitcoin. In that case, why not simply keep it and hope that in the future it will be worth a million? I understand that the state is not an investment institution, but if this works out for them and they are not spending any money, why not do it?

[fullfitlarry]

sometimes I used to assume that the government has even acquired enough bitcoin across different countries in the hidden, since the bitcoin is not like the fiat currency even the government is sure of it thriving and if not for anything they will want to have a backup plans too. I am sure government knows very well that they need it and as a result They ate investing in it in the hidden

In countries where Bitcoin is not legal, the governments of all the countries may secretly invest in Bitcoin, this may be a step to improve the economic condition of their country. But you can see in reality that the governments of different countries have accepted Bitcoin as a strategic reserve because they hold this Bitcoin to eliminate the economic shortage of the country. Because Bitcoin is digital gold, Bitcoin has become widely known in this current era and Bitcoin is used secretly and openly in almost every country. If you have noticed, then you will definitely be convinced that all the countries that have accepted Bitcoin as a strategic reserve have been able to succeed economically.

Doesn't make sense though for government to invest secretly on Bitcoin, although one case could be China, as they hated Bitcoin for the longest time. But there are a lot of analyst who says that they have amassed a lot in secret and they and the US are in the race for the most amount of Bitcoin as a reserve.

But for other countries, it might be good to declare how much they have like El Salvador. So that other countries will have a idea on how much they got and the profits that they've made so that maybe their government might want to invest too and not be left out in the future.

[MusaPk]

Among governments, this is not a widespread phenomenon at the moment. If we look at official sources and official statements, only a few countries show interest in Bitcoin. And note that it all started when they confiscated Bitcoin, held it for some time, and saw the advantage of holding it, when you keep an asset and it grows in value.

Of course, there are countries like El Salvador, which buys Bitcoin on a regular basis, or Bhutan, which mines Bitcoin and also accumulates it quite effectively. But if we take examples like the United States and similar countries, they only confiscate Bitcoin. In that case, why not simply keep it and hope that in the future it will be worth a million? I understand that the state is not an investment institution, but if this works out for them and they are not spending any money, why not do it?

So far we have not seen positive attitude of governments towards Bitcoin and that's understandable because Bitcoin is something that can't be controlled by a single entity. The governments for centuries are in full control of financial system of there countries. Big powers like USA and China won't fully adopt Bitcoin in place of USD and Chinese Yuan because they are comfortable with them. There are few small economic powers that have adopted Bitcoin or investing in it but majority of big powers are yet to embrace Bitcoin. As an individual investor, we must not be worry about government adoption because bitcoin has it's own benefits and it don't need support of governments to go high in price.     

[Showlove01]

Someone said something on Altcointalk and it got me thinking why do government need Bitcoin?

No, the government does not need Bitcoin.  The government might need the technology behind Bitcoin, the blockchain technology, but even without it, the government can smoothly proceed with its activity.

By adopting the technology, the government does not need to adopt Bitcoin or make a stock of it, they can just create their own blockchain technology unique from Bitcoin but with the principles and features of Bitcoin.  It is not hard because the Bitcoin source code is open to everyone.

sometimes I used to assume that the government has even acquired enough bitcoin across different countries in the hidden, since the bitcoin is not like the fiat currency even the government is sure of it thriving and if not for anything they will want to have a backup plans too. I am sure government knows very well that they need it and as a result They ate investing in it in the hidden

Any Government that is investing in Bitcoin secretly simply because they have made Bitcoin illegal in their country is a bad Government and some Government are really bad because they don't help the society and yet they keep on enacting rules and regulations that will affect the growth of the society that is the individuals. It is very wrong to stress and suffer people when you can not help them when you are suppose to and those governments that has made Bitcoin illegal, it is obvious they don't want progress in their country and this has made some persons engaged in activities that they are not suppose to engage themselves but due to circumstances.

[Ambatman]

Wow already in page 8 just under a few days
This is a first for me.
Not really used to creating thread that attracts large audience
They are usually quite niche.

Will be locking the thread since I have gotten some level of understanding what others think about the matter
And majority share same view with me.

Thanks for your contribution....