Government regulations discourage Bitcoin payments

[Jostern]

The government is one of the reasons why people prefer to hold bitcoin in their wallets for longer periods of time instead of using it for payments.  Apart from the government, the dramatic fluctuation of bitcoin price is another reason why people don’t use bitcoin for their daily transactions.  Furthermore, people naturally prefer to hold bitcoin for longer periods of time than spend it, because it is a store of value with potential returns.

As for satoshi, I don’t know how he would feel or whether he would be happy or disappointed,  but that doesn’t matter. What matter is that the project is a successful one.

Firstly, my primary motive of going into bitcoin is for bitcoin investment and holding, whatever that comes before that is just secondary, I agree with you that Government is one of the reasons why people aren’t using bitcoin for transactions, and also some people doesn’t accept bitcoin for payment because of it’s volatility and they don’t want to loose some certain amount of money, it’s quite understandable for people who fear volatility because they absolutely knows nothing about bitcoin, so for me since my primary motive of going into bitcoin is a store of value, but that doesn’t stop me from my peer to peer if the need arises, so it’s just about doing what works for us with investing in bitcoin.

[As-Soon-As]

So of encouraging people to spend Bitcoin these regulations seem to encourage people to hold Bitcoin. Do you think Satoshi would be happy with Bitcoin today or would Satoshi be disappointed that Bitcoins original purpose as peer-, to-peer electronic cash is no longer the focus?

Bitcoin will gain the most popularity from transactions, because gradually accepting this payment makes it possible for everyone to reach the message of Bitcoin. Bitcoin holding and Bitcoin transactions are the processes through which Bitcoin has gained the most popularity, that is why Bitcoin will gain the most popularity now and it is true that Bitcoin will gain more popularity in the future. However, for me, Bitcoin transactions and holding are the two most popular,
because Bitcoin holding will protect you from inflation. As a result, you will not have to face any trouble regarding transactions, within a moment you can congratulate the stream of Bitcoin from one end to the other using only an internet connection.

[The Cryptovator]

Now it seems that we are focusing more on Bitcoin as a store of value than on Bitcoin as a payment method. I feel that governments have ruined Bitcoins transaction side with their regulations.

I won’t blame the government for Bitcoin payments. Because the government has not yet accepted Bitcoin as legal tender. Rather, merchants and users are losing interest in Bitcoin payments due to transaction fees and duration. Otherwise, you have to use a centralised system for payment with zero fees and instant like a centralised wallet to the same wallet with no transaction fees. It’s just an internal transaction, not on-chain.

Unless it’s a big amount of funds, merchants and users won’t use Bitcoin payments. Even I am not interested as well. Why do I have to pay $5 transaction fees to make $10 payments? Rather, I can use my card for these types of transactions. That’s why investors consider Bitcoin as store value rather than Bitcoin payment in daily life.

[Don Pedro Dinero]

Unless it’s a big amount of funds, merchants and users won’t use Bitcoin payments. Even I am not interested as well. Why do I have to pay $5 transaction fees to make $10 payments? Rather, I can use my card for these types of transactions. That’s why investors consider Bitcoin as store value rather than Bitcoin payment in daily life.

These days it’s much cheaper than that – around $0.10. The problem is that if consumers pay by card, they don’t pay any fees, whereas they do when paying with Bitcoin. To get round this, there’s the LN option, but it hasn’t really taken off.

And, yes, in a sense the regulations ‘discourage’ payments in bitcoin, but governments do what they have to do. They’re thinking about raising revenue, not about making the world a better place.

[Royal Cap]

For example capital gains tax in some countries says that even if Bitcoin is used for payments Bitcoin can be taxed if Bitcoins value has gone up. So of encouraging people to spend Bitcoin these regulations seem to encourage people to hold Bitcoin. Do you think Satoshi would be happy with Bitcoin today or would Satoshi be disappointed that Bitcoins original purpose as peer-, to-peer electronic cash is no longer the focus?

First of all, I want to say that Bitcoin is not anonymous, Bitcoin is pseudonymous. That means that everyone can see all your information on the blockchain publicly, but no one can know your own identity until you publicly disclose it. And besides, Bitcoin is not just something that everyone is holding now, many websites use Bitcoin as a payment method. For example, I myself bought an RDP and paid through Bitcoin. And speaking of Satoshi, I think Satoshi would have been happy. Because Bitcoin is not yet fully regulated. It depends on how you use it. There are various privacy tools that you can use to hide your complete identity.

[Marvelockg]

For example capital gains tax in some countries says that even if Bitcoin is used for payments Bitcoin can be taxed if Bitcoins value has gone up. So of encouraging people to spend Bitcoin these regulations seem to encourage people to hold Bitcoin. Do you think Satoshi would be happy with Bitcoin today or would Satoshi be disappointed that Bitcoins original purpose as peer-, to-peer electronic cash is no longer the focus?

No matter the strength that lies in the asset you are creating, as long as the government can touch it in a way, you sure should be ready to experience some set back and changes which are what the government have been long known for. because of the fact that the fiat is equally loosing her value, it is more reasonable to spend the fiat as a medium of payment that spending bitcoin even if the issue of fees is not put into consideration.

if you are not directly spending your bitcoin but converting it to fiat when there is a need to spend it, government regulation won't really affect you and unfortunately, that is part of the reason why investors prefer to spend in fiat while holding on to their bitcoin.

[OcTradism]

No matter the strength that lies in the asset you are creating, as long as the government can touch it in a way, you sure should be ready to experience some set back and changes which are what the government have been long known for. because of the fact that the fiat is equally loosing her value, it is more reasonable to spend the fiat as a medium of payment that spending bitcoin even if the issue of fees is not put into consideration.

Governments can do many things because they have power in their countries but if you understand about Bitcoin blockchain, Bitcoin private keys, self custodial storage as well as Bitcoin blockchain history, you will know that governments can not freeze and seize bitcoins in non custodial wallets of citizens by a remote action.

Governments only can seize citizen bitcoins by arrest that person, and ask for the wallet or private keys to seize that bitcoin fund. They must have valid reasons to do that legally on a citizen, and it's not a thing can be enforced arbitrarily.

As users, when we want to use our bitcoins, we must be well aware about existing laws and regulation in a nation we are living in. It's important to avoid legal problems and take care of our bitcoins as safest as possible.

[Tamaperdana]

Because Bitcoin was originally designed for peer-to-peer transactions I think that as more people use Bitcoin for payments demand will grow and Bitcoins value will rise and eventually people will see Bitcoin as a store of value.

Now it seems that we are focusing more on Bitcoin as a store of value than on Bitcoin as a payment method. I feel that governments have ruined Bitcoins transaction side with their regulations.

For example capital gains tax in some countries says that even if Bitcoin is used for payments Bitcoin can be taxed if Bitcoins value has gone up. So of encouraging people to spend Bitcoin these regulations seem to encourage people to hold Bitcoin. Do you think Satoshi would be happy with Bitcoin today or would Satoshi be disappointed that Bitcoins original purpose as peer-, to-peer electronic cash is no longer the focus?

I'm not sure if Satoshi would be happy about all this. But if we look at Bitcoin's current development, he should be happy and proud. Bitcoin has grown into a significant asset, and many people have been helped by it. Many have had their lives changed for the better by Bitcoin. Bitcoin also helps people because it's a store of value. So, that's clearly a truly positive thing. So, I think that even though the peer-to-peer system isn't working well yet and not many people are using it, Bitcoin has already had a huge impact on many people. So, yes, that would definitely make Satoshi happy. Regarding government regulations that complicate all of this, imposing taxes and other things on people who transact with Bitcoin, that's unavoidable, so we have to accept it, because what can we do? We're just ordinary people whose voices may not be heard much.

[WatChe]

The government is one of the reasons why people prefer to hold bitcoin in their wallets for longer periods of time instead of using it for payments.  Apart from the government, the dramatic fluctuation of bitcoin price is another reason why people don’t use bitcoin for their daily transactions.  Furthermore, people naturally prefer to hold bitcoin for longer periods of time than spend it, because it is a store of value with potential returns.

As for satoshi, I don’t know how he would feel or whether he would be happy or disappointed,  but that doesn’t matter. What matter is that the project is a successful one.

Bitcoin since its launch has shown enormous increase in its price and not many assets in human history have shown such massive increase in short duration. This is prime reason why people are now hodling Bitcoin for long term and not using it for daily payments. Government regulations are also a problem because in many countries Bitcoin is totally illegal while in some its usage is allowed after government regulations, which seriously compromise user privacy.

Can't say about Satoshi but one thing is clear that Bitcoin is created for benefit of the humans and through long term hodling the purpose is served.

[PVequalNRT]

Now it seems that we are focusing more on Bitcoin as a store of value than on Bitcoin as a payment method. I feel that governments have ruined Bitcoins transaction side with their regulations.

For example capital gains tax in some countries says that even if Bitcoin is used for payments Bitcoin can be taxed if Bitcoins value has gone up. So of encouraging people to spend Bitcoin these regulations seem to encourage people to hold Bitcoin. Do you think Satoshi would be happy with Bitcoin today or would Satoshi be disappointed that Bitcoins original purpose as peer-, to-peer electronic cash is no longer the focus?

I don't think the government has discourage Bitcoin transactions. Millions of Bitcoin transactions are processed every day and no government anywhere can stop it. Even with regulations, there is little to what the government can do because transactions happen on the chain and it's from your wallet, the government can't do anything about it. It's when you are using a centralized exchanges the government can track your activities with Bitcoin.

What you do, the government don't know, this is why it's encouraged that if you want to do anything, your privacy is important, don't do kyc and don't use centralized exchanges.

[letteredhub]

Now it seems that we are focusing more on Bitcoin as a store of value than on Bitcoin as a payment method. I feel that governments have ruined Bitcoins transaction side with their regulations.

Bitcoin transactions have been never ruined by governments and if you can see any ruin from this chart, please tell me.
https://bitinfocharts.com/comparison/bitcoin-transactions.html#alltime

Number of transactions in blockchain per day is almost x 4 since 2018, is it an indicator of ruin?

Governments did not succeed with their attempts to filter and censor Bitcoin transactions, together with increasing transactions number daily over years, there is no ruin by any reason, not only by governments.
https://b10c.me/projects/016-miningpool-observer/

I think the transaction numbers in the chart would have increased beyond what is given in that chart since 2018 if not for how people considers much the volatility of bitcoin more than even the government tax policies on bitcoiners.
Popular opinion shows how business owners has always given the excuse of bitcoin volatility than any capital tax gains. They fear that the price might fall, making the value drop and making them struggle with losses. Perhaps as bitcoin halving continues it would get to a time when bitcoin's volatility would slow down from how it is currently and more entrepreneurs would give interest to it for payment option in their businesses.

[Aanuoluwatofunmi]

Any advances in Bitcoin should not be considered under the fair regulation of the government over the network because this is more of a decentralized network, and we don't expect the influence of a government on the market performance. Everyone should use Bitcoin based on their independence and affordability. Government regulation will not help with the situation but will make things worse than we may ever imagine.

[henmark]

Unless it’s a big amount of funds, merchants and users won’t use Bitcoin payments. Even I am not interested as well. Why do I have to pay $5 transaction fees to make $10 payments? Rather, I can use my card for these types of transactions. That’s why investors consider Bitcoin as store value rather than Bitcoin payment in daily life.

These days it’s much cheaper than that – around $0.10. The problem is that if consumers pay by card, they don’t pay any fees, whereas they do when paying with Bitcoin. To get round this, there’s the LN option, but it hasn’t really taken off.

And, yes, in a sense the regulations ‘discourage’ payments in bitcoin, but governments do what they have to do. They’re thinking about raising revenue, not about making the world a better place.

That is not true at all. When you pay cash, yes, there is no fee, you just pay true cash. However, when you do use credit cards, that is actually something that you pay on it, both the payer and the shop actually, depending on when you get it. Credit card is a "credit" card, as in loan, so you are spending money that you do not have, and bank takes that into consideration, so that is the part for the buyer.

The shop on the other hand, depending on your deal with the bank, you could be getting that money today, as in literally instantly but that would take a lot, and I mean a lot, like %1 of the payment, to make that happen or you wait 14 days and pay nothing, and most places need the money quickly instead.

[Antotena]

Any advances in Bitcoin should not be considered under the fair regulation of the government over the network because this is more of a decentralized network, and we don't expect the influence of a government on the market performance. Everyone should use Bitcoin based on their independence and affordability. Government regulation will not help with the situation but will make things worse than we may ever imagine.

The government regulation can't do anything to the network, it's far from reachable because the network itself is decentralized. I think regulations falls under what the government can control and not the network. If the government limit the amount people can invest in Bitcoin, it will affect Bitcoin transaction that people can do. If the government want people to use an exchange to monitor who and who have Bitcoin, this will limit the Bitcoin transaction.

Another thing I have discovered is that people are buying Bitcoin ETF instead of real Bitcoin, I don't know if I can call that regulations or the people prefered that as an investment but having Bitcoin ETF over real Bitcoin is going to affect the Bitcoin transaction and how adoption will growth. If people don't use the network, it will be boring, blocks are going to be empty.

[Agbe]

Government regulations are only in the centralized exchanges and not the non custodial wallets therefore bitcoin payment is still on the saver side and all what we need now is for people to buy bitcoin from from non custodial wallets though that will need some level of trust and the buyers will be well known to people.

In 2021 to 2022 when I became fully aware and have the interest on bitcoin, exchanges p2p, we were selling and buying without government tax but from 2023, taxation became incredible. And till now investors/traders use the exchanges that has the less payment of tax collection from traders.

[Alpha Marine]

Profit doesn’t necessarily have to come from coverting your coin to fiat, unrealized profit is still profit. You can still be taxed while spending your coin even if no fiat is involved. Depending on the jurisdiction where bitcoin is taxable, when you spend an apprentiated bitcoin, it can also realise a capital gain.

Yes, I know this, and it is like this with every other asset. That is how capital gains tax works. Transferring your bitcoin is seen as taking profit. Except there has been no profit made from the bitcoin. Bitcoin is seen as a property in many countries, so selling it, swapping it or using it to pay for things will be taxed.
Governments of various countries won't view Bitcoin as a currency because that would mean they are accepting that there is an alternative currency for people to use, and this could drive demand away from the local currency. So if it is viewed as property, it solves all their problem.
As long as there is a capital gains tax on Bitcoin, then it is treated as property, and if you transfer that property to someone else, then tax would be deducted on the profit.

The point I was making in my previous post is that if you have not made any profit from the Bitcoin, spending or swapping it won't require any tax. Tax would only be required when you have made profit from it.

[Hypnosis00]

The question "would Satoshi be happy or sad with the current state of Bitcoin" is asked a million times already.

But this is a different context.

The only thing we could do is find the real Satoshi and ask him.

You are kidding, are you a kid? 

Guessing what Satoshi would answer is pure speculation and it find it pointless.

its only pointless if you don't get the point of the story.

Blaming the governments for discouraging BTC adoption is an easy option. I don't think that capital gains tax is what's stopping the crypto enthusiasts from spending their BTC. You just don't spend an asset, whose price is about to increase a lot tomorrow(or after several months).

I didn't say it will make them stop spending it, but my point is it will not gain adoption for what is supposed to be the very purpose of Bitcoin.
Ask Satoshi what he made Bitcoin for, I'm sure it's not for holding alone.

We need to spend it like fiat or even compete with it, thing is governments are already intruding on us, we are supposed to be decentralized with no government involvement but they are leading us into their net now.

[Odusko]

Because Bitcoin was originally designed for peer-to-peer transactions I think that as more people use Bitcoin for payments demand will grow and Bitcoins value will rise and eventually people will see Bitcoin as a store of value.

The fact that Bitcoin is viewed more as an assets, and store of value, but that doesn't elude the other aspect of Bitcoin functionality like being p2p payment between two different people that doesn't require third party involvements.

Now it seems that we are focusing more on Bitcoin as a store of value than on Bitcoin as a payment method. I feel that governments have ruined Bitcoins transaction side with their regulations.

For example capital gains tax in some countries says that even if Bitcoin is used for payments Bitcoin can be taxed if Bitcoins value has gone up. So of encouraging people to spend Bitcoin these regulations seem to encourage people to hold Bitcoin. Do you think Satoshi would be happy with Bitcoin today or would Satoshi be disappointed that Bitcoins original purpose as peer-, to-peer electronic cash is no longer the focus?

When we talk about the capital gain tax this can differ from country to country, like in my country there is no such tax on Bitcoin investments yet, but I know in the future crypto tax is going to be implemented.

[retreat]

Now it seems that we are focusing more on Bitcoin as a store of value than on Bitcoin as a payment method. I feel that governments have ruined Bitcoins transaction side with their regulations.

The government regulations somewhat discourage the use of Bitcoin for payments, and that's something they should do. We have known that the government doesn't like Bitcoin and doesn't want Bitcoin to be widely used as an alternative to their currencies. The government just doesn't want their people to use Bitcoin more and could have less control over transactions in their society. 

But that's not the only thing that makes people discouraged from using Bitcoin for payments. Fees and waiting times are also considerations for why not that many people use Bitcoin for their payments. Just imagine having to wait for a transaction to be confirmed and pay a fee just to buy a cup of coffee. It doesn't make much sense when you can use cash or a regular payment app and complete the transaction almost instantly.

Do you think Satoshi would be happy with Bitcoin today or would Satoshi be disappointed that Bitcoins original purpose as peer-, to-peer electronic cash is no longer the focus?

I don't know exactly what he's thinking. But seeing how Bitcoin keeps growing the way he envisioned, I guess he should be happy with Bitcoin's development. Even though there are some things that might annoy him, like Bitcoin becoming more concentrated in a few entities, and maybe a lot of people using Bitcoin as a speculative asset. But Bitcoin hasn't changed, it's still decentralized money and is still governed by consensus and the community. That should still make him happy and feel that Bitcoin is still on track as an electronic payment system that doesn't rely on third parties.

[Sanitough]

When we talk about the capital gain tax this can differ from country to country, like in my country there is no such tax on Bitcoin investments yet, but I know in the future crypto tax is going to be implemented.

I was curious about your post because I believe that in every country where Bitcoin is not banned, capital gains tax is always present.
So I checked your post history and I saw that you posted on the Nigerian local board, so I presume you are from Nigeria..

And here's what I found about your taxes, maybe you didn't read this one.

https://www.pwc.com/ng/en/assets/pdf/nigeria-finance-act-2023.pdf

The key changes introduced by the FA 2023 are
highlighted below:
1. Taxation of gains on the disposal of digital assets
including cryptocurrency at the rate of 10%.

So you are just not aware that your country already has capital gains tax.