Government Crackdowns are Inevitable
I think a lot of people that are in the cryptocurrency space, believe that if we become reputable enough, the government wont step in and try to stop user growth. The problem with ideology is cryptocurrency is more than likely, a net negative for governments. If we look at a currency like bitcoin, it pulls away money, which in return pulls away monetary policy from the Fed and other organizations. The government isnt just going to let this happen. The entire debt based model that governments use today, only works with inflationary currency, which is why the fed targets a small amount of inflation a year.
The United States isnt even that bad compared to other countries, where citizens will do anything in order to get their money out of a local currency. Governments that rely on citizens buying into the current system, or not being able to leave the current system, are going to be the first to step up, like we have seen. Theres a reason why places like China have taken a stance against cryptocurrency. However, there is a much bigger threat looming than just keeping people in the system.
If there comes a time where full anonymous payments become possible with bitcoin (there will be in the next few years), governments are essentially going to lose out on a massive amount of tax dollars. If people flock to anonymous currencies with large liquidity, many are not going to pay taxes. We can believe that people will do the right thing, but the majority probably wont, especially if they believe the taxes are too high. This is precisely the reason that the recent bill was brought up which would make it illegal to not disclose cryptocurrency ownership. The government would not be able to function without being able to tax high net worth individuals who seek to hide their assets.
To the government, they want the system to stay the same. Technological change is a variable that is not something they greet with open arms. They want to rely on what has worked for them in the past, inflate the currency, push people to the stock market, increase stock prices, which benefit companies, continue. The government probably doesnt really even want you to own gold, but they are fine with it as long as it remains hard to move, store and transfer securely and as long as a large amount of people are investing in it.
If we see the day where cryptocurrencies overtake the value of gold investment, there might actually be an economic revolution on how mainstream governments work. However, no matter how proactive a government is, or how forward thinking they are, I would still expect them to crack down in some way or another. I would expect at the least almost all governments to follow suit with making it illegal to not disclose the amount of coins you own. The higher the price rises as well, the more governments are going to take interest.
-Calaber24p
This is why we need to support decentralized exchanges.
Nice post. Governments can do anything and they want to preserve situation like it is now. But evolution of money will be stronger in my opinion.
I dont think governments will ever move away from fiat currencies. They might just slightly alter it and how they use it, but unless they change their whole debt based ideology, things wont change.
We have to push governments to switch to economy of value instead.
This sounds like bad news for cryptos in the future. I hope not.
Maybe in terms of price, but good crypto will always be relevant even if its just a niche thing.
Like steem, i guess?
I am very curious to see what will happen during the next financial crisis.
I forsee crypto values exploding, followed by some form of a crackdown on the exchanges. Who knows!
Venezuela starting their own cryptocurrency is probably the funniest/craziest thing I've seen in a long while.
yeah it would be interesting to see
Correct!
When TPTB get their entire cash-cow threatened ($"Fiat currency"$) they will do everything in their power to defend it .. Just as they have from the very start in 1913.
Dont expect them to give away all their power and income without a fight ..
I hope it will be peaceful takeover!
The only way to really clamp down would be to go after the fiat exchanges like Coinbase. However, very soon we'll have decentralized exchange protocols and the ability to swap directly in a crypto wallet without the need for centralized exchanges. There just needs to be more fiat gateways. From what I read many more options are coming.
We already have such decentralized exchange. This is BitShares.
Check its web site: https://wallet.bitshares.org
China blocked BTC precisely because that's how folks were getting profit out of the country. Fat lot of good it's done them...
https://www.cryptocoinsnews.com/china-bitcoin-ban-to-extend-to-low-cost-mining-local-report/
The problem with change is that it comes regardless of the obstacles in the way - governments won't be able to stop this long-term while they may win short-term battles. The problem with cryptocurrency is that it's pure game theory - it only takes one nation (cough cough Japan) to accept Bitcoin as a currency and support it economically before money starts shifting to their borders. People cashing in and out of Yen. How are you going to enforce it in another sovereign state?
Governments don't understand cryptos. If they understood fully, they'd be raging lunatics trying to stop it. In my mind, cryptos have the potential to unseat most governmental functions. What will happen to governments when we realize we do not need them?
They will flail, and I'm sure flail harder as things progress and they get a greater understanding of what cryptos can become.
Taxing will never go away. And remember, when you sell your cryptos on an exchange, you generate a taxable event. Using a decentralized exchange, and putting ZCash or Monero transactions in between to anonymize yourself, only works if the vendor you're purchasing from is also anonymous. If they have to report anything to the government, there goes your public key and your anonymity.
Perhaps purchases across border might work for a while, but eventually I'm sure governments will start to cooperate to get this kind of information.
The only way out would be to have a middle man to keep things anonymous. The vendor ships to the middle man, who then ships to you without knowing anything about the transaction or contents. They simply know an address and take possession of the package.
I guess my point is, governments will still be able to collect their taxes, but they won't know how much money people have in the "bank" and won't be able to freeze/confiscate/etc.
BitShares provide your middle man. You must just transfer fiat money to BitShares and when is on its blockshain you are in another, let say, cyber state. As long as you trade there in BitShares decentralized exchange (DEX) no tax collector can trace and reach you. And there is no authority on BitShares from where tax collectors can demand data about your account.
I write a post about IRS ambush ob Coinbase exchange: https://steemit.com/cryptocurriences/@tombort/why-irs-can-bust-you-on-centralized-exchanges-and-not-on-bitshares
If you decide to withdraw your profits you have control over reporting your profits and pay taxes for them.
Check its web site: https://wallet.bitshares.org
also @stan and @docmaestry write some useful posts about BitShares!
I tried using BitShares but it was a bit confusing at first. I confess I haven't been back. But I didn't think that BitShares let you convert fiat into cryptos... only cryptos into other cryptos. I'll check those folks out, thanks a lot for the info :)
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Se you around.
Yeah, governments will try to slow down the crypto hike a hard as they can. But crypto world offer us common people a power to move things a lot in our favor .
In my post: https://steemit.com/cryptocurriences/@tombort/fed-start-to-monitor-crypto-movement I wrote about how they start to oppress us,
and in this another one https://steemit.com/cryptocurriences/@tombort/why-irs-can-bust-you-on-centralized-exchanges-and-not-on-bitshares I spoke about pros and cons of decentralized exchanges which can be controled by IRS.
And, by the way, On BitShares exchange you can trade gold and silver as pegged assets which are pegged to the value of gold and silver. Any time you can convert this assets in BTS tokens and exchange this tokens for fiat money or for another crypto.
Awesome Stuff! Check BitShares home page: https://wallet.bitshares.org In my opinion, BitsShares is Bitcoin successor. Also @docmaestry writes excellent posts about BitShares. I deeply recomend them.
and for the end this is a story how governments rape us with controlling money https://steemit.com/cryprocurrencies/@tombort/what-is-money-and-what-is-crypto.
I'll be appreciated if you review and comment my posts.
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