What happens in the government if Bitcoin takes over?

[beetcoin]

bitcoin can't take over. if it were that dangerous to the establishment, they'd do everything in their power to stop it.

Yes, they will still have ways of controlling it and people, in fact i think bitcoin is beneficial to them, they know fiat money failed, and bitcoin is the perfect solution.

nope, the establishment depends on fiat money to get rich. bitcoin removes the banks, especially if it gains enough steam. banks are an industry that deals with trillions of dollars. all they'd have to do is throw some money at politicians and shit will go down.

[taipo]

What happens in the government if Bitcoin takes over?

Just look back at the Governments, music and film industries reactions to torrents. So just replace 'music and film industries' with 'Banks', and you pretty much have your answer.

[Watermelondea]

And what happens to Bitcoin if the goverment takes it over and starts controlling it?

[deisik]

And what happens to Bitcoin if the goverment takes it over and starts controlling it?

Evidently, they would drop it in favor of fiat...

[taipo]

And what happens to Bitcoin if the goverment takes it over and starts controlling it?

Evidently, they would drop it in favor of fiat...

or bastardise it to the point that it might as well just be fiat.

[deisik]

And what happens to Bitcoin if the goverment takes it over and starts controlling it?

Evidently, they would drop it in favor of fiat...

or bastardise it to the point that it might as well just be fiat.

This is one of the reasons why Bitcoin will ultimately fail as a medium of exchange (even if it doesn't get banned in the interim)...

[Pente]

Property taxes
Mineral taxes
Oil extraction taxes
Road taxes
Import/Export taxes
Sales taxes
Travel taxes


Governments won't have any trouble collecting taxes. What they won't be able to do anymore is to run a deficit. Governments that try to run a deficit will quickly be marginilized just like in 3rd world countries.

I think this will ultimately mean less war, less prisons, and less welfare.

[Gianluca95]

There are two possibilities:

1) Government will try to regulate it.
2) Government will try to ban it

[sana8410]

Most governments get their money from taxes. If these become impossible to collect, how will the government support itself? They would no longer have control over any currency. Would BTC taxes have to be enforced? Should an alternative be sought? How can a government survive without money?

I'd like to see people's opinions on anything related to this, as I feel that most forum members are better versed in such themes than I am, and I'm open to what everyone has to say.

A sales tax would make sense. Businesses collect when you make a purchase and send it to the government just like a lot of states do right now.

Your right, if government can't tax bitcoin than will tax the goods and the  services you purchase with bitcoin.At this point,government won't have any issue to get the money from tax,but in the future, if probably will exist only virtual currency’s they will come out with ways to tax/collect money.

[validium]

Most governments get their money from taxes. If these become impossible to collect, how will the government support itself? They would no longer have control over any currency. Would BTC taxes have to be enforced? Should an alternative be sought? How can a government survive without money?

I'd like to see people's opinions on anything related to this, as I feel that most forum members are better versed in such themes than I am, and I'm open to what everyone has to say.

A sales tax would make sense. Businesses collect when you make a purchase and send it to the government just like a lot of states do right now.

Your right, if government can't tax bitcoin than will tax the goods and the  services you purchase with bitcoin.At this point,government won't have any issue to get the money from tax,but in the future, if probably will exist only virtual currency’s they will come out with ways to tax/collect money.

Their first targets will be exchanges like coinbase

[niothor]

Most governments get their money from taxes. If these become impossible to collect, how will the government support itself? They would no longer have control over any currency. Would BTC taxes have to be enforced? Should an alternative be sought? How can a government survive without money?

I'd like to see people's opinions on anything related to this, as I feel that most forum members are better versed in such themes than I am, and I'm open to what everyone has to say.

Please let me know why would taxes become impossible to collect with bitcoin..

How are you going to avoid paying property tax or vat with bitcoin?

[validium]

Most governments get their money from taxes. If these become impossible to collect, how will the government support itself? They would no longer have control over any currency. Would BTC taxes have to be enforced? Should an alternative be sought? How can a government survive without money?

I'd like to see people's opinions on anything related to this, as I feel that most forum members are better versed in such themes than I am, and I'm open to what everyone has to say.

Please let me know why would taxes become impossible to collect with bitcoin..

How are you going to avoid paying property tax or vat with bitcoin?

It would only make it a bit hard for them to collect taxes but not impossible

[niothor]

Most governments get their money from taxes. If these become impossible to collect, how will the government support itself? They would no longer have control over any currency. Would BTC taxes have to be enforced? Should an alternative be sought? How can a government survive without money?

I'd like to see people's opinions on anything related to this, as I feel that most forum members are better versed in such themes than I am, and I'm open to what everyone has to say.

Please let me know why would taxes become impossible to collect with bitcoin..

How are you going to avoid paying property tax or vat with bitcoin?

It would only make it a bit hard for them to collect taxes but not impossible

Probably only a tiny bit ..

I have a question for this guys who claim that with bitcoin you can avoid taxes , will you also avoid paying speed tickets when bitcoin replaces fiat?

[deisik]

To sum it up, nothing will change substantially for an average Joe if Bitcoin would take over and replace fiat...

[Lethn]

What happens in the government if Bitcoin takes over?

Just look back at the Governments, music and film industries reactions to torrents. So just replace 'music and film industries' with 'Banks', and you pretty much have your answer.

Yes, there will be multiple takedowns like Silkroad and the governments will try to pretend they have authority over it all but what will happen is several more sites and organisations spring up in their place.

[JorgeStolfi]

Well when the government dont get their income from taxes anymore they will just find another way.
I think we dont know half the things they probably have in mind to get the money.
When there is a will, there is a way.

What ways could they have up their sleeve? That is what I'm mostly concerned about.

The don't need any new ways.  Not paying taxes is already a crime, whether you transact in dollars, in euros, or in something else.  If you earn bitcoin and do not pay taxes on that, they can take your car and house and/or send you to jail.

Or do you think that they cannot find out about your bitcoin income?

[Chef Ramsay]

The bankers and their buddies have begun to take notice of what BTC has to offer and they are likely going to get in if they haven't already. They need to leave the fiat bag w/ the regular people
http://coinbrief.net/fed-bitcoin/
The Federal Reserve Sees A Bright Future For Bitcoin

At this point the U.S. Federal Reserve is well aware of Bitcoin, including all of its advantages and disadvantages. The Federal Advisory Council, which regularly consults with the Board of Governors of the Federal Reserve, held a meeting on May 9 where the banking industry representatives discussed whether Bitcoin poses a threat to the traditional financial system and regular consumers.
The verdict: Bitcoin is potentially risky only for people who buy it, but as these risks are addressed over time, the digital currency could drastically change the world’s finances for the better.
First of all, the FAC’s report notes that “Bitcoin’s nascency makes it more curiosity than threat” and it only accounts for a “fraction of today’s global fund flows.” In other words, Bitcoin is still in its adolescent stages with plenty of room to grow. In fact, the FAC sees the possibility of Bitcoin having a great impact in the long term as “the network self-refines and adoption increases, requiring traditional payment processors to adapt and respond.”
Greater Financial Inclusion

The FAC’s meeting report lists several of Bitcoin’s most popular advantages, including lower transaction fees for merchants than credit cards. In addition, the report notes that digital currency “enables cheap international remittance to the developing world and the developed world’s ‘unbanked,’ expanding financial inclusion.” Essentially the FAC is acknowledging that the vast majority of people on Earth don’t have access to a bank, and that Bitcoin could give them more power over their money.
The Federal Reserve even sees a scenario where traditional banks join the cryptocurrency fun and “participate increasingly in Bitcoin fund flows,” an idea that is supported by the fact that more people are using accounts with multiple currencies. It appears that the Fed sees nothing intrinsically wrong with financial institutions dealing in cryptocurrency.
Consumer Protection

Bitcoin’s greatest flaw, according to the FAC report, is the risk it poses to consumers who buy the digital currency. This risk is mainly that Bitcoin is highly susceptible to theft, a problem magnified by unsecured wallets and unreliable exchanges like Mt. Gox.
However, the Fed suggests a few solutions. “Supervised risk management of Bitcoin exchanges” would ensure their solvency, and further regulations could require that the exchanges invest in appropriate cybersecurity measures to prevent hacking. These efforts would theoretically prevent another Mt. Gox from occurring in the future.

They need the media to keep the boobs in usd as long as possible.

[ShakyhandsBTCer]

Well when the government dont get their income from taxes anymore they will just find another way.
I think we dont know half the things they probably have in mind to get the money.
When there is a will, there is a way.

What ways could they have up their sleeve? That is what I'm mostly concerned about.

The don't need any new ways.  Not paying taxes is already a crime, whether you transact in dollars, in euros, or in something else.  If you earn bitcoin and do not pay taxes on that, they can take your car and house and/or send you to jail.

Or do you think that they cannot find out about your bitcoin income?

Dealing strictly in bitcoin would make it very difficult to sufficiently track a person's income. This is especially true for people who do a lot of "side" work as they could simply provide a different address to send payment to for each payment. A person could easily tumble their coins to hide the fact where they originally came from (a particular employer who could then trace them to the employee).

[JorgeStolfi]

Dealing strictly in bitcoin would make it very difficult to sufficiently track a person's income. This is especially true for people who do a lot of "side" work as they could simply provide a different address to send payment to for each payment. A person could easily tumble their coins to hide the fact where they originally came from (a particular employer who could then trace them to the employee).

Currently it seems that, for many bitcoiners, just owning coins is all they want from life. But, in that distant future we are considering, that will be sort of passé:  people will presumably want to spend their bitcoins too. 

Suppose you buy a fancy car with the bitcoins from those "side jobs".  The tax detectives will know about the payment, and will link it to you, from the dealer and other sources.  They check their databases and discover that the payment did not come from any of the addresses that you declared in your tax forms.  What then?

Mixing won't help, quite the opposite. The tax office does not need to find out where your extra coins came from; it is you who will have to explain -- and prove -- to them that you paid the tax on that extra income.

Ditto for coins from "dirty" jobs -- if the tax guys suspect that your extra coins may be related to illegal activity, they will warn the police.  Then it will be you, not the police, who will have to explain -- and prove -- that those coins came from legal activities.

Note that the government does not have to catch every single tax evader.  They only need to catch and sternly punish enough of them to scare most of the other citizens into voluntary compliance. 

[taipo]

To the original questions: "What happens in the government if Bitcoin takes over?"

If Governments were to deem bitcoin to be a real and present threat to their perception of power, or the ability of banks to rule, you will see them targeting the trading of bitcoin for fiat. They would come at all those exchanges and try to lock up those running them for every possible thing they could charge them with from regulation breaches, tax based charges, money laundering to racketeering. Its the only part of the Bitcoin world that is actually potentially smashable by a state power.