Will the government attack BitCoin? | Bitcointalksearch.org

Malawi

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One bitcoin to rule them all!

Quote from: Qoheleth on April 11, 2013, 09:04:30 PM

At that time, the government quietly prints a bunch of USD and buys enough BTC with it to last a couple years. Money enters the economy. Huge inflation out of nowhere. US dollar loses confidence and inflation becomes hyperinflation. People run for BTC, and before long nobody wants to hold dollars any longer than necessary. All of a sudden, $15T+ doesn't sound that difficult to pay off, right? And the government changes the rules, makes BTC legal tender, and sends its creditors the pittance they're owed.

As long as Bitcoin is mainly traded against US dollars, it strenghtens the dollar. Reason is that most of the world population are not from the US.

Also - If a wealthy investor uses his Dollars to buy some guys bitcoins, that person is more likely to spend them on items and services than the investor was. This in turn strenghtens the dollar. It takes away idle/speculation money and puts them into the real market.

Tirapon

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Quote from: Qoheleth on April 11, 2013, 09:04:30 PM

Warning: below post is a pipe dream, which I'm sharing just to make a rhetorical point.

Quote from: crazyfingers on April 11, 2013, 08:49:34 PM

More importantly in the coming years it is inevitable that the dollar will continue to lose value. The national debt is what, $15+ trillion? Trillion+ dollar deficits have become the norm. There is another tens of trillions in unfunded or underfunded liabilities. The Fed is stuck between a rock and a hard place, with interest rates way artificially low but not being able to raise them without crashing the economy. The only way out for them is to print money and that makes cryptos a problem for them.

The US federal government has a $15T+ debt. They could just print $15T+ and pay it all off, but that'd hyperinflate the dollar and tank the economy.

But if there was another currency poised to take over in a hyperinflation scenario? Maybe you could do it without messing up the economy.

Imagine it! Bitcoin is getting popular. Rising against the dollar, more and more folks using it, there's some companies where you can get your salary in BTC, some stores where you can use it to buy bread.

At that time, the government quietly prints a bunch of USD and buys enough BTC with it to last a couple years. Money enters the economy. Huge inflation out of nowhere. US dollar loses confidence and inflation becomes hyperinflation. People run for BTC, and before long nobody wants to hold dollars any longer than necessary. All of a sudden, $15T+ doesn't sound that difficult to pay off, right? And the government changes the rules, makes BTC legal tender, and sends its creditors BTC to pay off the USD-denominated pittance they're owed.

I came to pretty much the same conclusion:

https://bitcointalksearch.org/topic/what-if-the-government-wants-bitcoin-to-succeed-167767

Malawi

full member

Activity: 224

Merit: 100

One bitcoin to rule them all!

If bitcoin becomes a mainstream currency, it will be just like any other currency.

Nobody is stopping you from placing your money in Euro, Zloty or zimbawian dollars.

Your goverment may want to know how much you have, but that is for pure tax reason.
BTW: If you end up having to pay taxes on your bitcoin gains, you will also get a deduction at your bitcoin losses.

Qoheleth

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Spurn wild goose chases. Seek that which endures.

Warning: below post is a pipe dream, which I'm sharing just to make a rhetorical point.

Quote from: crazyfingers on April 11, 2013, 08:49:34 PM

More importantly in the coming years it is inevitable that the dollar will continue to lose value. The national debt is what, $15+ trillion? Trillion+ dollar deficits have become the norm. There is another tens of trillions in unfunded or underfunded liabilities. The Fed is stuck between a rock and a hard place, with interest rates way artificially low but not being able to raise them without crashing the economy. The only way out for them is to print money and that makes cryptos a problem for them.

The US federal government has a $15T+ debt. They could just print $15T+ and pay it all off, but that'd hyperinflate the dollar and tank the economy.

But if there was another currency poised to take over in a hyperinflation scenario? Maybe you could do it without messing up the economy.

Imagine it! Bitcoin is getting popular. Rising against the dollar, more and more folks using it, there's some companies where you can get your salary in BTC, some stores where you can use it to buy bread.

At that time, the government quietly prints a bunch of USD and buys enough BTC with it to last a couple years. Money enters the economy. Huge inflation out of nowhere. US dollar loses confidence and inflation becomes hyperinflation. People run for BTC, and before long nobody wants to hold dollars any longer than necessary. All of a sudden, $15T+ doesn't sound that difficult to pay off, right? And the government changes the rules, makes BTC legal tender, and sends its creditors BTC to pay off the USD-denominated pittance they're owed.

NikolaTesla

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Quote from: HappyBitCoinUser on April 11, 2013, 08:26:36 PM

Obviously BTC is a threat to big government and big banks, so they can't just sit idle and watch.

It's not threat to government, as long as merchants charge sales tax and speculators pay capital gains.

It's only a threat to banks if banks refuse to adapt. They could adopt it and create hosted wallets / accounts and Visa/MC/Amex could build a credit system on top of it, and they would make money faster than any of us here have. Historically, trying to oppose new technology has proven to be futile every time. Companies that adapt are the ones that make it.

zedicus

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CryptoTalk.Org - Get Paid for every Post!

its already happening.. but its not them i think its banks.. via bots and ddos! We must re-route there arse to black hole!

https://bitcointalksearch.org/topic/youre-being-lied-too-crash-172619

They want the volatility to get in the press as NEGATIVE in a big way!
its working.. bots are creating a landslide and the herd just follows blindly..

We need maximum per day drop limits and cooling periods like the real stock exchanges and we will be fine!

eshroom

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Quote from: HappyBitCoinUser on April 11, 2013, 08:26:36 PM

Obviously BTC is a threat to big government and big banks, so they can't just sit idle and watch.

Obviously.

crazyfingers

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Quote from: NikolaTesla on April 11, 2013, 08:35:59 PM

Honestly I don't believe in this whole "government hates bitcoin" thing. People say that without any evidence whatsoever. Nobody in government has ever demonstrated hostility to bitcoin, in fact the new regulations seem to imply they are perfectly fine with it as long as you don't launder money and you remember to pay your capital gains.

They really don't have any reason to want to kill bitcoin. They make the same amount in taxes either way, since you have to pay capital gains, and you have to pay them in your country's currency.

They could actually generate quite a bit more revenue, in fact, if they jumped into the bitcoin market themselves.

Also keep in mind that a lot of VC's in Silicon Valley are jumping head first into bitcoin-related companies, which they would absolutely not do if there was any question about the legality or any possibility the government is about to kill it. VC's get a lot of legal advice before investing in ideas.

IMO the U.S. government has plenty to lose from widescale adoption of bitcoin. People buying gold and other tangibles directly with BTC aren't paying tax on their gains. More importantly in the coming years it is inevitable that the dollar will continue to lose value. The national debt is what, $15+ trillion? Trillion+ dollar deficits have become the norm. There is another tens of trillions in unfunded or underfunded liabilities. The Fed is stuck between a rock and a hard place, with interest rates way artificially low but not being able to raise them without crashing the economy. The only way out for them is to print money and that makes cryptos a problem for them.

Rallye

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Quote from: NikolaTesla on April 11, 2013, 08:35:59 PM

Honestly I don't believe in this whole "government hates bitcoin" thing. People say that without any evidence whatsoever. Nobody in government has ever demonstrated hostility to bitcoin, in fact the new regulations seem to imply they are perfectly fine with it as long as you don't launder money and you remember to pay your capital gains.

They really don't have any reason to want to kill bitcoin. They make the same amount in taxes either way, since you have to pay capital gains, and you have to pay them in your country's currency.

They could actually generate quite a bit more revenue, in fact, if they jumped into the bitcoin market themselves.

Also keep in mind that a lot of VC's in Silicon Valley are jumping head first into bitcoin-related companies, which they would absolutely not do if there was any question about the legality or any possibility the government is about to kill it. VC's get a lot of legal advice before investing in ideas.

This^ +5

proudhon

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Quote from: cbeast on April 11, 2013, 08:30:45 PM

They won't need to, we do a pretty good job ourselves.

A million, this.

Qoheleth

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Spurn wild goose chases. Seek that which endures.

Quote from: crazyfingers on April 11, 2013, 08:37:57 PM

Couldn't a lot of those services just move to Tor and / or small financial haven countries?

The online wallet guys, sure.

But overseas or "anonymous" exchanges have the problem of getting your money into them, and miners who try to mine over Tor will eat big stale rates, especially as blocks begin to grow.

Of course, this is all assuming "the government" (human lawmakers and bureaucrats with complicated incentives) cares enough to take punitive action at all.

crazyfingers

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Quote from: Qoheleth on April 11, 2013, 08:35:06 PM

I'm not familiar with other "the government"s, but if you mean the US federal government, if they retaliate I seriously doubt it'll involve conspiracy theory tier stuff.

More likely, it'd take the form of strict regulation of exchanges, wallet services, and miners who interact with the traditional money system - the three classes of user that FinCEN has already warned may qualify as MSBs.

Couldn't a lot of those services just move to Tor and / or small financial haven countries?

NikolaTesla

newbie

Activity: 28

Merit: 0

Honestly I don't believe in this whole "government hates bitcoin" thing. People say that without any evidence whatsoever. Nobody in government has ever demonstrated hostility to bitcoin, in fact the new regulations seem to imply they are perfectly fine with it as long as you don't launder money and you remember to pay your capital gains.

They really don't have any reason to want to kill bitcoin. They make the same amount in taxes either way, since you have to pay capital gains, and you have to pay them in your country's currency.

They could actually generate quite a bit more revenue, in fact, if they jumped into the bitcoin market themselves.

Also keep in mind that a lot of VC's in Silicon Valley are jumping head first into bitcoin-related companies, which they would absolutely not do if there was any question about the legality or any possibility the government is about to kill it. VC's get a lot of legal advice before investing in ideas.

crazyfingers

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Quote from: ManBearPig on April 11, 2013, 08:31:30 PM

Quote from: HappyBitCoinUser on April 11, 2013, 08:26:36 PM

Obviously BTC is a threat to big government and big banks, so they can't just sit idle and watch.

Legislation. Only way to kill the beast.

They could try and stop it but would only drive it underground, like every other legislatively-created black market.

Qoheleth

legendary

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Spurn wild goose chases. Seek that which endures.

I'm not familiar with other "the government"s, but if you mean the US federal government, if they retaliate at all I seriously doubt it'll involve conspiracy theory tier stuff.

More likely, it'd take the form of strict regulation of exchanges, wallet services, and miners who interact with the traditional money system - the three classes of user that FinCEN has already warned may qualify as MSBs.

ManBearPig

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