Government regulations discourage Bitcoin payments

[Swordsoffreedom]

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 just uses all sorts of reasons to try to discourage the use of Bitcoin. We can't expect them to roll out the red carpet for Bitcoin payments. Also, merchants don't seem all that interested in it either. You could say that Bitcoin isn't really supported for everyday payments and more people are choosing to just hold it. But that shouldn't be a big deal because even without government regulation, Bitcoin can still grow and remain a decentralized payment alternative

Before maybe yes, they try to discourage people and always say Bitcoin is illegal money. Now everything change and many people look at it as good alternative form of currency.

The problem here, many people don't view Bitcoin as currency. Because they rarely use it for that matters. Most of people buying Bitcoin now, use it for investment matters. Then I think this is how we get an issue here.

If this mindset will not be corrected, for sure in future many will still look at Bitcoin as good investment. Not a good form or alternative to their fiat currencies.

Government have certainly tried to discourage people from using Bitcoin as a currency. But they are not the biggest obstacle, tho. We are, the holders.

Why do I say that? Just look at El Salvador, Bitcoin became legal tender there in 2021. But multiple surveys over the past 5 year have found that fewer than 10% of people actually use it as a currency. Most would rather treat it as an investment and chase gains instead.

Let's be honest for a second, most of us do not really want to spend our Bitcoin. Everyone wants to hold it and get rich from it, yet they expect governments and other people to use it as a currency. LOL.

[PVequalNRT]

When we talking about bitcoin transactions being taxed we shouldn't forget how impossible that can be for the government of lost country because of bitcoin decentralized nature, if government want to tax cryptocurrency transactions, stable coins like USDT and the rest will be easily taxed because of their decentralized nature, but bitcoin on the other hand can be transacted unnoticeable or government inability to collect the tax deductions from each user wallet when they send or recieve bitcoin.

The government can only tax what they know and this is why they like Centralized exchange with the way they subject everyone to kyc. If you do transaction on any exchange and the exchange is compliance with your country, I don't think you can escape tax. It may take years, but once they know that you have been doing transactions and you don't pay tax, you will be paying double of those years that you skipped.

Transactions that are done on decentralized exchanges and from one wallet to another are likely going to be hard to tax even if they are stable coins or Bitcoin. The government can't look at any network and says this transaction belongs to this person, it's not possible.

[vs2014]

Bitcoin is created to make online transactions easier without depending any banks or other apps where a person can fully control his funds. Nowadays people would like the hold bitcoin to grow more instead of using it for transactions or buy things. Other reason could be, people don't wanna spend bitcoin cause they may pay taxes when its value increases.

I think Satoshi might feel disappointed that Bitcoin is not being used as much as expected for everyday payments. I think better rules could encourage people to use bitcoin more without making the things complicated

[henmark]

The government just uses all sorts of reasons to try to discourage the use of Bitcoin. We can't expect them to roll out the red carpet for Bitcoin payments. Also, merchants don't seem all that interested in it either. You could say that Bitcoin isn't really supported for everyday payments and more people are choosing to just hold it. But that shouldn't be a big deal because even without government regulation, Bitcoin can still grow and remain a decentralized payment alternative

Before maybe yes, they try to discourage people and always say Bitcoin is illegal money. Now everything change and many people look at it as good alternative form of currency.

The problem here, many people don't view Bitcoin as currency. Because they rarely use it for that matters. Most of people buying Bitcoin now, use it for investment matters. Then I think this is how we get an issue here.

If this mindset will not be corrected, for sure in future many will still look at Bitcoin as good investment. Not a good form or alternative to their fiat currencies.

I would say that is not true that much anymore. With payment processors being a bit of a jerk lately, I have seen a lot of things change, and for that reason I think we should be looking at the situation a bit differently; it's not the same, and we need to be careful about it.

I understand it is not really an easy thing to handle, but the reality is that we should be looking at this like it is something that can be easily done because we are replacing it, look at transactions of Bitcoin- we are growing exponentially. Banks, for example, are fine; moving money from one bank to another is not in danger. However, paypal and so fort is in danger; people hate paypal, and they all look for alternatives- Wise, Payoneer, other stuff, but crypto is a big one as an alternative.

[Y3shot]

I think, bitcoin has already grown beyond the imagination of satoshi and at this point, wether it is been used for store of value or as a regular currency for our daily  transactions, what would matter most to satoshi now is the fact that, bitcoin is functional and serving several purposes and not just some Pump and dump projects.

Thank you satoshi.

Using Bitcoin to acquire things just like traditional currency is a matter of time. Right now, there are so many locations and businesses that accept Bitcoin, and if you check a few years back, you can't find this. Bitcoin is still growing, and people are still adopting it.

One thing we need to know is that we shouldn't expect governments to accept Bitcoin quickly; they will first resist it, and with time, they will notice that they need Bitcoin more and will have no choice but to accept it.

[danadc]

One thing we need to know is that we shouldn't expect governments to accept Bitcoin quickly; they will first resist it, and with time, they will notice that they need Bitcoin more and will have no choice but to accept it.

I hope that moment arrives soon. I know it will happen eventually, but the process should be accelerated so people can learn more about Bitcoin. People don't do much with Bitcoin because they don't understand it properly. Regulations, governments, and many other organizations aren't interested in people learning about Bitcoin because they would cease to be part of an economy dominated by governments, banks, and other powerful entities.

It's not in their best interest for people to have a more accessible lifestyle; otherwise, they'll work harder for less pay and depend on their salaries, never having the opportunity to become wealthy.

[#CapsLOck]

One of the other considerations is the on-chain vs. real world payment distinction. An increase in Bitcoin activity doesn't always mean increased usage of BTC for purchasing goods and services. Some of the transactions could be related to exchanges. Wallet management. Or Layer 2 activity. While tax considerations can dissuade spending, other factors like merchant acceptance. Price fluctuations and transaction costs are equally important. It is important that these factors should be seen individually before deciding that regulation is the primary problem.

[OsaiEmma]

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.

You're basically saying people are putting the cart before the horse, hmmm, that is true. But I think if people hodl and use Bitcoin mainly for transaction purposes, and that is what Bitcoin's demand depends on, then it will be less desirable. There are faster, cheaper, and more convenient means of payment out there that will make Bitcoin less desirable. If it weren't for SegWit, it would have been worse. So I don't agree with your premise.

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.

Truth is, with or without government's intervention, most people will prefer Bitcoin as a store of value than just a means of payment.

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?

Now this is a very interesting question; nobody can confidently answer this question, but we can infer an answer. On this note, I want to ask you a question in return: Do you think Satoshi knew Bitcoin has the potential to increase in value? Do you think Satoshi had in mind to combat inflation while designing Bitcoin? We all know the answer to all these questions is YES! How do I know? Well to start with the first question, Bitcoin has the potential to increase in value, and Satoshi knew this, afterall he made Bitcoin disinflationary and limited, these features are the bedrock for an asset that wants to be a store of value—this is also linked to the last question. Now, seeing he knew all this, do you still think Satoshi will be disappointed with how Bitcoin is? I'd say NO!—I am by no means claiming Satoshi knew what will happen, I'm just inferring an answer based on logic and hypothesis.

If we say we want to use Bitcoin as a means of exchange more than a store of value, then we'll have to eliminate its ability to be a store of value, or make it less desirable, because inasmuch as that feature is there, people will opt for it much more than the former—i don't think anyone would prefer hodling to carry out online commerce to hodling for profit.

[legiteum]

Now this is a very interesting question; nobody can confidently answer this question, but we can infer an answer. On this note, I want to ask you a question in return: Do you think Satoshi knew Bitcoin has the potential to increase in value? Do you think Satoshi had in mind to combat inflation while designing Bitcoin? We all know the answer to all these questions is YES! How do I know? Well to start with the first question, Bitcoin has the potential to increase in value, and Satoshi knew this, afterall he made Bitcoin disinflationary and limited, these features are the bedrock for an asset that wants to be a store of value—this is also linked to the last question.

Bitcoin's 21M limit is a constant variable in the code and the number was arbitrary. It could be changed with one line of code.

It's clear that Bitcoin's use as an investment instrument was a complete accident. Bitcoin was clearly designed as a means of value transfer that could be done without a government-certified entity in the pathway and one which resisted a 51% attack, which was the primary problem with previous attempts at decentralized digital currencies.

By the way, when talking about "Satoshi", you need to talk about the fact that he/she/they were just building on what others had already done...

[Bit-Mj1014]

Giving the fact that Bitcoin has gone a long way from where it started, I'm talking base on adoption and price rate, I think Bitcoin is in a good place even if people spend there Bitcoin or not, and Satoshi won't be disappointed because given that he is a smart person he would've anticipated what is happening with the government now.

[SOKO-DEKE]

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.

You may have a point there. If many governments in different countries legalized Bitcoin, the rate at which people will be transacting with Bitcoin would increase significantly. However, the fact that some governments refuse to legalize Bitcoin is one of the reasons behind its slow adoption and why many people are not using it for transactions.But let us also understand that we don't need to put all the blame on governments. the reason people focus more on Bitcoin as a store of value it because it fast increase in value.and even in places where Bitcoin is legalized, only a few people are willing to spend their Bitcoin. This is because they believe its price seriously increase in the future, so they prefer to spend their fiat currency rather than their Bitcoin.Even me I don't like spending my Bitcoin because I see it as a store of value, and I don't want to misuse the opportunity I have now. I have made that mistake before by spending my Bitcoin, and I don't want to repeat

[Muba20]

The emergence of Bitcoin was largely focused on peer to peer transactions, but it was not created for any specific purpose, rather to provide people with a wide range of financial benefits. How can people transact money at low cost without a third party is possible only through Bitcoin. However, governments oppose Bitcoin because they cannot impose appropriate taxes on it. If the common people get the benefits of Bitcoin, then people's interest in the conventional financial system will decrease a lot. That is why governments always try to discourage the common people from using Bitcoin by enacting laws. Those who have gained knowledge about Bitcoin have come forward to use it on their own. Despite such opposition from the government, the use of Bitcoin is gradually increasing. In the future, governments will also come forward to use Bitcoin for their own benefit. Bitcoin offers many advantages to a user, now users can use Bitcoin for any purpose according to their convenience. And it is now clear to everyone that despite the many benefits of Bitcoin, governments cannot control it, so they try to discourage its use.

[ZAINmalik75]

Bitcoin is created to make online transactions easier without depending any banks or other apps where a person can fully control his funds. Nowadays people would like the hold bitcoin to grow more instead of using it for transactions or buy things. Other reason could be, people don't wanna spend bitcoin cause they may pay taxes when its value increases.

I think Satoshi might feel disappointed that Bitcoin is not being used as much as expected for everyday payments. I think better rules could encourage people to use bitcoin more without making the things complicated

I don't know but I personally think that there is nothing wrong in the ways people use Bitcoin even today. Whether someone is using Bitcoin to make profits or using it as a store of value, at the end of the day, they are still using Bitcoin and its adoption is constantly increasing and that's what matters. When it comes to its use case as a payment method or currency, I think that will also increase over time.

Currently, Bitcoin and cryptocurrencies aren't widely accepted around the world, there are only a few countries where people can spend their bitcoins directly, but with time, things will change, and when more outlets, businesses and merchants start accepting it as a payment, I'm sure more people will start using it. For the time being, Bitcoin is still doing pretty good even if it's not mainly being used for what it was created.

[serjent05]

Now this is a very interesting question; nobody can confidently answer this question, but we can infer an answer. On this note, I want to ask you a question in return: Do you think Satoshi knew Bitcoin has the potential to increase in value? Do you think Satoshi had in mind to combat inflation while designing Bitcoin? We all know the answer to all these questions is YES! How do I know? Well to start with the first question, Bitcoin has the potential to increase in value, and Satoshi knew this, afterall he made Bitcoin disinflationary and limited, these features are the bedrock for an asset that wants to be a store of value—this is also linked to the last question.

Bitcoin's 21M limit is a constant variable in the code and the number was arbitrary. It could be changed with one line of code.

Yes, it could be changed with one line of code but on top of that, there must be a consensus.  If there is none, this one line of code will never be executed.

By the way, when talking about "Satoshi", you need to talk about the fact that he/she/they were just building on what others had already done...

If you are talking about Satoshi modifying the code with that one line you stated, then it won't happen without the consensus of miners, node operators, developers and lastly the economic participants.  Satoshi might have the influence, but Bitcoin today is not in his grasp anymore, even if he appeared out of nowhere and proposed a change to Bitcoin's supply.

[Etranger]

Take Ukraine, for example — one of the leaders in Bitcoin adoption and number of holders, by the way. Yet the government insists that crypto will never be recognized as a means of payment. Why? Because it allegedly undermines the hryvnia's monopoly, which is — wait for it — the very cornerstone of inflation control and the country's monetary stability. Never mind that neither control nor stable inflation has existed for a long time now. If you ask me, that’s just an excuse to ensure as few people as possible have legal access to crypto.

[Faisal2202]

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?

Satoshi became a billionaire, so I am 100% sure he would be happy that one of his projects made him a billionaire, and now it will soon become something big. Maybe he will become a trillionaire too, but how much money can force him to come out and sell his funds? If all these billions he has in his wallets can't force him, then how much money can?

Well, if I were in his place, I probably would have sold my coins haha. But it also suggests he might not be alive anymore or might already have more funds than he could ever need to risk a gamble this big.

[HustleZ]

Giving the fact that Bitcoin has gone a long way from where it started, I'm talking base on adoption and price rate, I think Bitcoin is in a good place even if people spend there Bitcoin or not, and Satoshi won't be disappointed because given that he is a smart person he would've anticipated what is happening with the government now.

Bitcoin is in a way better place than it was at the start, either it be according to price or according to adoption and usage as a currency. But the main things is that a relatively higher percentage of Bitcoin holders are investors and not regular users that use bitcoin for peer to peer transactions which was the main reason bitcoin was made for. So i dont think that bitcoin fulfilled that purpose to the fullest and hope so we will see more bitcoin-based transactions when the fees rates decrease and adoption increases

[danadc]

Bitcoin is in a way better place than it was at the start, either it be according to price or according to adoption and usage as a currency. But the main things is that a relatively higher percentage of Bitcoin holders are investors and not regular users that use bitcoin for peer to peer transactions which was the main reason bitcoin was made for. So i dont think that bitcoin fulfilled that purpose to the fullest and hope so we will see more bitcoin-based transactions when the fees rates decrease and adoption increases

The more adoption there is, the easier the path becomes. It can't be integrated all at once, even though things with BTC have increased significantly since its inception. It has garnered a lot of attention from governments, from those stock market investors who hadn't yet made up their minds, and from institutional investors who are now buying heavily and absorbing market downturns.

We can't wait for that moment to arrive; the important thing now is to accumulate.

[OsaiEmma]

Now this is a very interesting question; nobody can confidently answer this question, but we can infer an answer. On this note, I want to ask you a question in return: Do you think Satoshi knew Bitcoin has the potential to increase in value? Do you think Satoshi had in mind to combat inflation while designing Bitcoin? We all know the answer to all these questions is YES! How do I know? Well to start with the first question, Bitcoin has the potential to increase in value, and Satoshi knew this, afterall he made Bitcoin disinflationary and limited, these features are the bedrock for an asset that wants to be a store of value—this is also linked to the last question.

Bitcoin's 21M limit is a constant variable in the code and the number was arbitrary. It could be changed with one line of code.

It's clear that Bitcoin's use as an investment instrument was a complete accident.

It's been a while I saw you around, hope you're doing good.

Anyway, I think you're wrong on this part, this is not what Satoshi said. Below is an email correspondence between Satoshi and Martin Malmi (Sirius)

My choice for the number of coins and distribution schedule was an
educated guess.  It was a difficult choice, because once the network is
going it's locked in and we're stuck with it.  I wanted to pick
something that would make prices similar to existing currencies, but
without knowing the future, that's very hard.  I ended up picking
something in the middle.  If Bitcoin remains a small niche, it'll be
worth less per unit than existing currencies.  If you imagine it being
used for some fraction of world commerce, then there's only going to be
21 million coins for the whole world, so it would be worth much more per
unit.  Values are 64-bit integers with 8 decimal places, so 1 coin is
represented internally as 100000000.  There's plenty of granularity if
typical prices become small.  For example, if 0.001 is worth 1 Euro,
then it might be easier to change where the decimal point is displayed,
so if you had 1 Bitcoin it's now displayed as 1000, and 0.001 is
displayed as 1.

Ripple is interesting in that it's the only other system that does
something with trust besides concentrate it into a central server.

Satoshi

(Source).

Maybe it's just a line of code that can be changed, but the consensus state of Bitcoin makes it impractical. And I don't for a second believe that Bitcoin became a speculative, investment asset by chance. This is what he also said in the same correspondence:

Definitely.  This will be an absolutely essential feature once things
get going, making it so you can lock your wealth up with strong
encryption and back it up more securely than any physical safe.

And, if you read down to the latter part of the email correspondence, you'll see where they brought up the idea of having an exchange for Bitcoin trading and all that. Bitcoin didn't just stumble and get to where it is today.

Although, I believe that he didn't think government will adopt it the way they did today, but he definitely thought of its value increasing over time. He also thought it would be widely adopted, and also it would be traded with other currencies—he saw it as a financial instrument. He didn't pitch it as an investment because he wanted users to come to that conclusion on their own (source). But I'm pretty sure he didn't completely rule that out—afterall, speculative assets are speculative because people anticipated that the price will increase so they purchase it—and more times than one, Satoshi anticipated value increase in Bitcoin.

References: link 1, link 2

Now look at the full picture:
- A value increase anticipation.
- A trading feature (exchange for currencies).

Now tell me, isn't this the core feature of a speculative asset?

Bitcoin was clearly designed as a means of value transfer that could be done without a government-certified entity in the pathway and one which resisted a 51% attack, which was the primary problem with previous attempts at decentralized digital currencies.

By the way, when talking about "Satoshi", you need to talk about the fact that he/she/they were just building on what others had already done...

You're completely right here, but it is not limited to this fact alone.

[Aljawaab]

‎I think governments policy can only affect exchange banks because if someone holds their Bitcoin and never us e exchange, how would the government know about them? (I am a newbie, am still learning)
‎