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Bitcoin is borderless. Lets say for example, a government decides to ban all bitcoin/fiat exchanges in their jurisdiction, what will people who want to obtain B

Bitcoin is borderless. Lets say for example, a government decides to ban all bitcoin/fiat exchanges in their jurisdiction, what will people who want to obtain Bitcoin do? Answer: They will obtain Bitcoin either directly (on the black market, as payment for labour or services), or they will obtain it overseas, where said government has no jurisdiction. In both of these cases, if hidden from the government in question, this is actively harmful to the government because it becomes assets which the government has no ability to levy taxes on. Another problem is that governments which attempt to restrict bitcoin usage will suffer the economic and brain drain which will occur as people move themselves, their businesses and their money overseas to somewhere more friendly to Bitcoin, whose economies will prosper as a result. Also aided by having a stronger monetary base which can't be devalued by central bankers. Governments don't want to say "we're going to make Bitcoin legal," because they don't yet know how to deal with collecting tax in a world of Bitcoin use. They also don't want to just say "we're going to make it illegal," because they would be doing so at their own peril. Good luck enforcing any prohbition anyway. We've seen how prohibition of alcohol played out in the 1920s. We also know that many drugs, despite being illegal for many decades, are easily obtainable anywhere there is a demand for them, and largely at the loss of the governments banning them, who could've been collecting taxes all along on drugs sold. The main reason cannabis is becoming legal in many places now is because it is hugely profitable, and governments want their slice of the pie.

dasil003 8y ago
All this idealism remains to be proven. If Bitcoin can cross the chasm to be a de-facto transaction method then it might have enough leverage to force governments to capitulate, but we are still very very far from that point, so you shouldn't treat it as a foregone conclusion. I grew up in Brazil during hyper inflation, and I have Argentinian friends now, so I understand what it means to obtain currency overseas or on a black market, and I can assure you it's a huge hassle and not something people want to do unless their local fiat currency has major problems. If governments with strong currencies start moving against bitcoin, transaction volume will decrease, investors will lose confidence, and the value will crash out. This doesn't require a coordinated effort, it just requires a handful of major countries to start seeing things a certain way.

dasil003 8y ago

All this idealism remains to be proven. If Bitcoin can cross the chasm to be a de-facto transaction method then it might have enough leverage to force governments to capitulate, but we are still very very far from that point, so you shouldn't treat it as a foregone conclusion. I grew up in Brazil during hyper inflation, and I have Argentinian friends now, so I understand what it means to obtain currency overseas or on a black market, and I can assure you it's a huge hassle and not something people want to do unless their local fiat currency has major problems. If governments with strong currencies start moving against bitcoin, transaction volume will decrease, investors will lose confidence, and the value will crash out. This doesn't require a coordinated effort, it just requires a handful of major countries to start seeing things a certain way.