Topic: Will the Government use the Blockchain as a tool for control? (Read 345 times)

The true reason for which the bitcoin is being innovated is getting used in some countries. The same have made the functioning more effective against the traditional system. As the middle man gets removed a big revenue is saved out of it. This middleman profit gets into the treasure of the government.

Blockchain technology helps with the transparency, but the same isn't liked by the government. Being transparent keeps them good with the administration, but the government won't be able to bribe. For this reason it is less likely to see blockchain usage by the governments.

Blockchain is much larger than just a cryptocurrency so definitely Bitcoin can be ignored if someone or some company or nation wanted to take advantage of the immutability of the blockchain.  Besides the government or a company will always aim for full control of anything that they wanted to creater or build, so I guess the kind of blockchain to use here is a centralized one.


The government wanted to have a share of the pie no mattet what industry it is.  That is why they always implement regulation on everything to keep track of whatever financial gain they can have may it be cryptocurrency or other kind of ventures.



Movies is just a movie writer's imagination.  So we shouldn't take the scenes as a facts.  They are often fiction though it might have some influence from what is happening in the present time.  But still a movies shouldn't be taken seriously unless it is a documentary production.

Different governments are actually making use of the blockchain technology in various departments. Though they do not support the freedom of financial management via blockchain (I.e. bitcoin) then also they are using it for their data integrity issues. Just now read that Spanish telecom company is accepting bitcoin payments which is indirect use of blockchain related services. Though not real soon but in the future treaty might get formed to control the blockchain space and work on technological advances which may help for humanities further tech leaps.

Given that a blockchain decentralizes money and sets it apart the state, it's kinda contradictory with it being a government tool as well. Sure, chain analysis does some work (even though it's mostly fundamentally flawed), but it does the supposed work it thrives to in the first place. But there isn't anything beyond that.

Blockchain, and to be precise, Bitcoin's blockchain will rather be an escape from governmental tools.

That has been the case for the "black market crypto usage" topic as well and everyone will do it as they see fit. Normally, they do not realize that dollar has been used for cocaine purchases as well, it is common, it is said that every single 20 dollar bill in the world has a bit of cocaine trace on it, well not the newly printed ones I am sure, but the ones from the 80's for sure.

That’s why we should not be seeing crypto and immorality as a connected thing, it's immorality and humans, no matter what they do, what they use, what money, what product, what item, doesn't matter, some people will do the immoral thing over the moral one and there is no stopping them.

So they're just shoehorning a technology into a problem. That's not how you make a solution.

Blockchain has certain properties which makes it excel in applications that require immutability such as auditing. It is not good for much else.

*A caveat, you only get the immutability if the nodes are spread apart in different geographic regions and are operated by different organizations, so that there is no overlord of it all to compromise it.

Well, that's why CBDCs can spell disaster for Bitcoin. Once governments start implementing their CBDCs they will surely limit the access to Bitcoin by using the government's digital coin. Many governments want to restrict the use of Bitcoin and that is the order of the day in many countries. Bitcoin threatns their control and they will regulate at their own pleasure to restrict access to cryptos.

Well it depends on the country and their government, each of them are very different based on their own geography and economy.
For example when Venezuelan created their own CBDC called Petro it was meant to basically raise funds and make some money for the government that was running low on budget. It failed because of that.
When Chinese created their own CBDC it was meant to be used for fact payments and to compete with bitcoin adoption. It only gained success after they started limiting people's usage of bitcoin.
There are other cases but they are not released yet but the one we are working on is meant to be used for import/exports based on my speculation (which can be wrong) but we have to wait for them to be released.

transparency is indeed one of the good thing about the implementation of CBDCs. unlike fiat money, which the government can't track of, CBDCs can now easily be traced via blockchain. however, i don't think the government will employ this 100%. so its constituents has still the option of using their fiat and other payment methods. those who will use CBDCs should know the risks of using it.

only a few governments use this technology and publish it if they use this technology ,
as we know that many governments are against this system, aren't they, but they secretly use this system to track the activities of their citizens in all ways without us know it, especially in the tax system

This is an interesting question. I believe their goal is to be able to track your carbon footprint and tax you if it's too high.
It's all about the money that they can make from this.

We have to ask ourselves what it is that they have to gain from switching to CBDCs.
No more money spend on printing and storing cash.
Full tracking
No more ways to avoid taxes
Great way to gather information about people's spending habits

That is also what I am thinking.  I believe that government will use blockchain to spy on peoples financial transaction.  Well, on a positive note this will enable the government to track down illegal transactions and be able to know people accounts that is behind  money laundering and people who finance rebels and terrorist.  On the negative side, normal people will be exposed to government exploits especially if the person become the target of interest of the government.

That may be the case but in a democracy, the people can make a case for blockchain to be implemented in the electoral process. A democratic government cannot refuse such demands for a more transparent and fair elections. I have little faith in governments and their systems, government are all about control we have so very little control of our lives, we have been systematically programmed to function in a certain way to achieve a particular result. Bitcoin and blockchain technology is the only thing standing between them and total dominance.

If I'm going to roughly guess — they'll take advantage of public blockchains to pursue people(not necessarily criminals only) who are careless concerning privacy(straightly depositing and withdrawing through KYC exchanges). With Chainalysis and such + carelessness, Bitcoin's privacy can suck really bad.

Ok, so you went straight to the point. Governments do not want to have anything with it as it is a decentralized technology and they like to stay in control. As you say, they won't even want to use blockchain for their CBDCs... so in that sense, what would they use this technology for?

Control of what?
Also, if they cannot put under their power cryptocurrencies since it is naturally decentralized, then how come?Governments are also interested in this technology because they are wanting to tax every transaction given that the impression of being profitable, is known on their end.You might be referring to third party wallets or applications. But on that sense, it is not completely under their control. If they are using blockchain as a control tool, why can't they directly regulate it? 'coz that would be impossible, atleast at the present, to happen.

I'd more view it as their way to adapt with this technology rather than aiming to put this technology under their power. It's been years or a decade for this technology but still, only few countries allowed it to be used as a mode of payment.

If we’re talking about CBDCs, that’s where the government have the control. Even if it means that they are going to outright ban Bitcoin, they can’t. If you look at China right now as they are anti-crypto and still doing the crackdown, there are still some Chinese crypto enthusiasts who are still using Bitcoin and always find ways and loopholes to trade, buy and sell with their own Chinese Yuan, etc.

Blockchain would be used in any financial system, whether government or private. But they will make things centralized. Bitcoin is illegal in my country, but a few financial institutions use it, though not directly through the government. Of course, they are a centralized organization that controls their financial system. So, yes, they are using Blockchain as a control tool.

First of all, Bitcoin, like any National currency can be used immorally by people... that doesn't make the cryotocurrency bad. It's people abusing/misusing it, like they would abuse/misuse any good thing for evil. And it's important to note that Bitcoin underlining technology makes exposing bad users easy compared to fiats/national currencies which are quite opaque and are heavily used by drug lords and for other immoral purposes. You could call them dark currencies without being wrong due to their lack of Transparency which is part of the fundamental feature of True Blockchain.

In regards to whether governments will use Blockchain as tool for control... that really depends on whether they weaken or completely discard the features that makes Blockchain harder to use a tool for control. By the way, it can nolonger be a True Blockchain if the features are weaken or discarded... it will become a false Blockchain. So, you will have to make sure bad people in governments do not tamper with Blockchains Features/Ideals/Standards like its Transparency, Decentralization, Fair rule-based protocol, Participatory governance/consensus, Censorship-resistance, Immutability, Permissionlessness/Trustlessness, , Immutability, Pow, etc.

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 Bitcoin or The Bitcoin System is analogous to a decentralized and interconnected Android Operating system, while alternative Blockchains are like modified Android operating system. All of them most likely won't be in existence if Bitcoin wasn't invented. They owe Bitcoin a lot of respect and should be built to be better/safer Blockchains rather than lowering their standards.

Bitcoin was never any of that!
At some point around 2013 the illegal usage began to grow because some newbies were lied to about bitcoin's anonymity but even then bitcoin was not a currency that is used for illegal activities.

It is not hypothetical when a handful of CBDCs are created and in use and more are in testing phase ready to be deployed.

Has it really? I don't think so. Some government have jumped on the hype wagon but not to help them with "financial policies".
 
But the governments are already in full control of the monetary policy. What do you think CBDCs are going to change?

I don't think governments have any use for blockchain technology because this technology only works best in decentralized mode but the governments want to centralize that which means it makes no sense in their hands.
This is also why CBDCs aren't considered "cryptocurrencies" and some of them don't even use the technology. After all D stands for digital...

I do not think that governments around the world are interested in using blockchain technology to improve the electoral process. If they did they were already using it, as we already have the means and tech do do it. Besides, using it this way would not allow them to manipulate elections, which I think they always do. As for the health industry, proposals are being done and there are already a few projects specifically dedicated to this industry as is the case of VEchain.

Do you really think that CBDCs are going to be based on blockchain technology? I don't think so.
The Blockchain has it's pros, but the main cons are wasting too much energy and not being able to handle billions of transactions per day.
The governments would most likely use a payment/transaction system, which doesn't waste that much electricity and can potentially handle a gigantic amount of transactions without getting stuck. I think that the governments would prefer a centralized transaction system, rather than trying to adopt blockchain technology. Perhaps they want a system with reversible transactions, which is a feature we don't want in the blockchain.

Ever since the introduction of bitcoin, many institutions, companies, organizations and government as a whole have been keen to the adoption of the blockchain technology already because of it secured and trusted network of protocols that it is built on, they now have the clear difference of this decentralized network from the centralized cloud storage system they have been using earlier before bitcoin and blockchain technology was introduced, i believe everything goes in a gradual process and with time, they will not only make use of the blockchain alone but together with bitcoin digital currency it was made with.

Governments are already harnessing the power of blockchain. Read this article below,

https://inc42.com/buzz/blockchain-this-week-west-bengal-districts-to-use-blockchain-for-issuing-birth-certificates-chinese-city-using-it-to-track-convicts-on-parole-and-more/

Having said that, these are not the only use cases where blockchain can be used. I specifically see blockchain is being used in maintaing land records. This is one area which can be explored to use blockchain at scale.

From signs majority of the power houses around the world are showing, it seems they're open to the idea of a blockchain technology adoption but don't want to acknowledge the importance of Bitcoin to this technology. The sad part is that the cryptocurrency market has grown to the extent that each technology in the industry can stand on its own without the influence of Bitcoin but that doesn't mean bitcoin doesn't still have control over all the price of the cryptocurency in the market.
I see the government wanting to sideline Bitcoin as they try to paint it as harmful to the growth of their nation by calling it a dark currency been used by corrupt organization to launder money and the government will start financing this rumors just to make them more believable. Already we see movies been made and Bitcoin is always the currency been used when illegal money is been move around, and this aren't no coincidence but a plan to sidelines Bitcoin while the blockchain technology gets adopted but that won't work.

Blockchain can be used to track anyone especially if they're use private blockchain which only the developer and the core team know where the coins arrive and where the coins from. It will become worst since no one aware where the coins from and how they can hide it from governments, especially they need to KYC on the local exchanges so the government become more easy to track it. Unlike Bitcoin which is pseudonymous.

I am not sure if governments would make use of blockchain technology, they seem to be very comfortable and have gotten used to centralized systems. The governments of the world themselves focus on the centralization of the power and even in the cases of the best democracies they only separate the power to a handful of departments.

They could go and try to implement blockchain technology for payment systems or patent registration, but they will likely program it so they can do whatever they want with their master key.

If it is the government that will use blockchain, then expect that it is used with a certain control mechanism. You don't expect the government to make use of a tool to let people have their absolute freedom. That's not how a government functions. As a matter of fact, if we go back to how governments are formed in the first place, theories would tell you that it's because we need to be controlled. In the process, we have to sacrifice a certain amount of our freedom.

Having said this, I don't expect the government to use the kind of blockchain that Bitcoin uses. For one, I can't imagine the government using an immutable blockchain for its CBDC.

Many people used Bitcoin for other purposes, not only for drug sales or drug addiction. You miss a point there.

Governments started to apply blockchain technology for their CBDCs which are far under Bitcoin in quality. Their CBDCs are totally centralized and if you don't believe in their fiat currencies or felt disappointed with their inflationary fiat currencies, you won't support their CBDCs.

Anyway, if you skip Bitcoin and compare altcoins with CBDCs, I would like to choose CBDCs rather than altcoins especially newborn altcoins. It is like you can keep your savings in fiat currencies but should not keep your savings in altcoins.

Governments already has a lot of control in the current banking system, it allows then track flow of transaction, freeze accounts, reverse transactions and demand additional information should there be any suspicion of shady business, or on their discretion (depending on how corrupt the nation is). A CBDC based on the blockchain would just be replicating that level of control on a purely digital network, in the banking system, there's the alternative to hold cash, which cannot easily be tracked or restricted, but besides this, CBDC or fiat is basically one and the same.

A completely blockchain based system is not possible at this time, it would have to be supplemented with the traditional banking system.

Something similar to how China tracks their citizens I guess? That's how I'd imagine governments would work if they wanted to create a system where everything is tracked. I wouldn't expect it in a few years though, especially if we consider how some security measures would probably be done to prevent us from bypassing their laws just by creating new addresses and using them instead when we want to avoid their eyes.
Ban everything as illegal when it's not registered in their system. I reckon stores/services would automatically reject said addresses.

I hate this.  Why do we have to assume that Bitcoin ever was the criminal's Currency?  Silk Road existed, that is a fact.  But I am convinced Bitcoin used to be mostly an obsession for geeks.  Of course some took advantage and used it in other ways.  Bitcoin did become more popular through things like Silk Road, I can not deny this, but it was not how it started.

Dark Web and Silk Road are being talked about in an overly exaggerated way.  It is always talked about as if you can do literally anything you can think of over there and it is not true.  Change my mind.

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It is very easy and can be applied even today.  Obligation to declare any and all Cryptocurrency addresses you own.  Any undeclared address is illegal and suspect.  But it sounds too brutal for now.  So if they actually want to do this, they will do it slow and steady.

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Regards,
PrivacyG

You can't keep track of people's addresses. I can just obtain a new address and use it, how is anyone going to know it is mine if I don't tell anyone?? Also mixers, obfuscate transactions so there is no way of telling where transactions come from. The only way to control anything is through how Welsh said it. See below.

The practicality of this however is questionable. How would one be able to control new addresses being distributed?

It is very possible that for the government to use blockchain technology to keep track of people.  I believe they can use it to store their citizen information.  Aside from that, through blockchain technology, I believe they can able to track down individuals' financial capability and the transactions they made.  The wallet address will work out as a tagging system for every individual's financial statement and since blockchain tech is transparent, the government will easily identify the destination of every person's transaction.  This is a good way to control corruption but also a good way to see people's transactions like an open book.

Only if they implemented it in such a way that addresses had to be tied to government issued ID's, and they were centrally controlling when new addresses are allowed to be distributed. That way they can monitor everyone's cash flow, spending habits, and income. That would be the only way they'd be able to leverage the Blockchain to their advantage, at least one that makes sense.

Do I think it's going to happen? Potentially, but I don't think we're quite there yet. It's far more likely that they adapt their current system, and bring more regulation to Bitcoin. Edward Bernay's basically said that if you want to control a population, you need to give them the illusion of choice, and if they strong armed you into only using their currency, effectively banning alternatives, then you'd likely have people rebelling. Giving people the illusion of choice, but requiring them to use fiat for certain benefits would probably be the way to go.

Obviously, at the moment we aren't anywhere near the market share that would be required for the government to think about implementing something like this.

While governments can certainly use CBDC to increase their control , blockchain also allow us just to use bitcoin and use our freedom when we need.

Intensive use of Technology have reduced our privacy considerably over the last decades, and this movement will continue. However,  we now have an alternative to achieve some degree of privacy and freedom in our financial lives.

I would not expect governments to use blockchain in any legitimate capacity. Venezuela's attempt to rollout a CBDC cryptocurrency is our 1st indication of this.

While blockchain can be useful for eliminating middle men in a trust capacity, translating to greater efficiency and lower labor costs. There isn't much incentive in government to implement cost cutting measures. Lack of competition and incentive to produce efficient solutions to problems, trends more towards bloat, waste and abuse. Than it does an idyllic arrangement where problems are solved with a minimum of cost.

While blockchain is useful for other things, its best role could be validating transactions in assets like bitcoin.

A better question might be how blockchain can be used to improve upon existing technologies like BTC. Satoshi did an outstanding job on the engineering and development side of things. The next step could be devising methods to protect inflation protected HODL assets like bitcoin from wild speculation and prevent it from being traded as if it were an equity.

The big issue that governments are trying to address is the anonymity factor that is provided by the blockchain. Although it is "open-book", addresses are essentially anonymous unless there is a way to stake them somewhere. And even then, using a mixer and a new address it is almost impossible to track the people holding funds.
I feel like if there was a way to use Blockchain technology which remains decentralised but gets rid of this anonymity factor and thus allowing investigators to track transactions and criminal activity, then governments and economic institutions would begin implementing Blockchain large-scale as this tech is quite obviously the future of the web. This is quintessential issue though is that getting rid of anonymity also means introducing a factor of centrality.

CBDCs are already here, it’s no secret that governments around the world who were anti-bitcoin and even those who were on the fence about cryptocurrency are now publicly having discussions about CBDCs.
Like they say, a good thing in the hands of a bad man could very well be used for evil. The most common use of blockchain for government would be electoral process and health care sector, which in my opinion is a very good development. I don’t see how they can use blockchain technology to further their wars and make bombs. The blockchain is an open book so I think any malicious act that may be attempted could easily be traced back to the source thus discouraging such actions.

10 years ago, blockchain was just the technology behind Bitcoin, a currency used by the Drug lords in illegal markets on the Dark Web.
Today, the blockchain is seen as one of the technological wonders of our time. The way blockchain technology has been seen by society has been growing along the years. From the slums of the dark web to the hypothetical implementation of CBDCs, blockchain technology has been highly regarded as a technology that can be used by the government to help them with financial policies and a lot more.
 
In a few years, we will probably see the entry of CBDCs as state digital currencies supported by the blockchain technology, but this will not be something good. Rather than that, they will use it as a tool for control and monetary policy, so I do not think that what they want to do with it will benefit society. Much to the contrary, they already know what the potential of this technology actually is, and they will use it for something nefarious.
 
How do you see governments making use of the blockchain technology in a few years?