Replying to Avatar Chad

I have a general question about crypto.

Let's say crypto starts gaining traction as money to the point where the govt feels threatened.

They respond by banning all business dealings with it.

Even if they can't control or even identify transactions on the blockchain, they can still see who publicly accepts crypto (by looking at website payment options, audits, investigations, etc).

This would make the vast majority of people avoid crypto, and businesses dealing in crypto illegally couldn't scale.

This seems like the likely scenario as the govt will not just let this much power slip away.

Isn't this a fundamental problem?
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makeasnek 1y ago

Governments have tried this before, and failed. There are many reasons for this:

1. Bitcoin is international. Your government can ban it all it wants, but the blockchain still keeps making more blocks regardless.

2. Technical censorship (blocking access to the network) is impossible to do perfectly. Things will slip through and people will still be able to access their Bitcoin, just with a few extra steps.

3. Bitcoin's market cap is 850 billion dollars. You are effectively sanctioning your own country by not letting it connect to this economy which ranks in the top 25 countries by GDP. The bigger Bitcoin gets, the more true that becomes.

4. Bitcoin's promise is more efficient payment systems. By not letting your country participate in this, you will be stuck using slow, legacy payment systems. This makes your economy less efficient, which makes it less competitive on the global market all else being equal.

5. There is a lot of international investment going into crypto technology. If you don't let people tinker with and use crypto in your country, you are going to miss out on that investment and the jobs it creates.

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Lucky Kite 1y ago

1) This can change. Govnts agree on all sorts of things to consolidate power. If the EU/US agree to ban use of bitcoin, then it becomes less valuable elsewhere also.

2) doesn't matter because of 1) - you can spend only on dark markets, and they need to be able to change it for currency they can spend (food etc), so only in countries that allow bitcoin exchange legally.

3) True, but that's not a reason, wiping that out is actually GOOD for fiat currency. Countries ban certain foreign currencies to bolster their own. Banning bitcoin would wipe that and that would be good for fiat. At worse there will be as many winners as losers.

4) Visa is efficient. Its works fine. Bitcoin privacy is better but not good enough. Govnt's aren't not banning Bitcoin because they think its fast and efficient, no minister has ever thought that.

5) So, there's plenty of useful things govnts can invest in - you know roads/rail/hospitals/housing/manufacturing - actual things!

The OP was right to ask this question, and probably knows the answer: A govnt can block its use any time it likes with little consequence to the state. It probably won't though, because Bitcoin is a good Trojan horse, and a spying tool for govnts. It gives them immense control, and the bigger it gets the bigger the Trojan gets , until boom!

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Lucky Kite 1y ago

Bitcoin is a zero day Trojan, the govnt are waiting for the right time to ban it. The bigger it gets the more power they will gain when they ban it,