Is the Government threatened by Bitcoin

[Kakashi2020]

In my opinion if Bitcoin or any decentralized coin becomes overly popular, the government will take steps to either control it, make money from it, or simply ban it by making it illegal like what China did.

 

[cks003]

Intervention by central bank/government to halt the trading of virtual currencies is mainly due to the worry that banks may lose their role over monetary policy.  In the event of inflation, deflation or financial crisis, central bank usually plays a very important role in adjusting interested rate, money supply etc.  For example, in the event of inflation, central bank may implement tight monetary policy by increasing interest rate and reducing money supply.  But the bank has no authority over virtual coin which is traded in a block chain technology.  In other words, the monetary policy is now in the hand of investors and speculators.  That is the main reason why Governments are always alert of the widespread of virtual currencies.  

[anyone01]

They may be either afraid or too ignorant to recognize the capability that blockchain possesses. Centralization might be removed from the sector from its very roots. And one day people dont need them anymore. As soon as this area matures, nobody can placed limits to the opportunities and possibilities one will have. Despite the fact that they fear bitcoin, what do they do? they're actually helpless. They cannot shut down bitcoin.

[Kakashi2020]

On 11/5/2018 at 6:33 PM, cks003 said:

Intervention by central bank/government to halt the trading of virtual currencies is mainly due to the worry that banks may lose their role over monetary policy.  In the event of inflation, deflation or financial crisis, central bank usually plays a very important role in adjusting interested rate, money supply etc.  For example, in the event of inflation, central bank may implement tight monetary policy by increasing interest rate and reducing money supply.  But the bank has no authority over virtual coin which is traded in a block chain technology.  In other words, the monetary policy is now in the hand of investors and speculators.  That is the main reason why Governments are always alert of the widespread of virtual currencies.  

The funny thing about block chain technology is that no one is owning up to be it's inventor.  And since there's no inventor, no one knows the reasons and motives for such invention.  And the worst part is everyone refers to it as block chain technology but I haven't seen or heard anybody explain it in a logical and scientific way.

[janie1984]

There's only a limited amount of currency to be mined for Bitcoin and the use of Bitcoin has already been approved in Japan, so while on some level it might threaten governments and their currencies it seems unlikely that they will move to outlaw it. China is an expection to the rule due to their authoritarian government and the heavy control they have over citizens lives. Also bitcoin was originally used by human traffickers, drug cartels, and other nefarious organizations so it's entirely reasonable for governments around the world to be suspicious of them. Saying "they cannot shut bitcoin down" is a bit extreme, there's a very simple solution for managing bitcoins use and it invovles taxation and regulation. By controling bitcoin through the same methods they control pretty much every other aspect of life, one can guarantee that the government will make money off of bitcoin even if they don't directly control it.

[cks003]

It is not the Government is threatened by the Bitcoin, it is the very livelihood of a laymen on the street who will be affected if the virtual coin is widely used.  Government through central banks around the world use monetary and fiscal policies to either increase or decrease money supply.  It can be interest rates, tax, printing more money etc, and the daily borrowing/lending costs, transaction costs etc are in turn affected.  The free market was the main culprit that brought down the economy in 1929s, and the episode gave birth to mix economy.  The role of the central authorities with cooperation from the private sector ensure the smooth running of the economy.  Without the check and balance from central authorities, private sector will reap larger than usual benefits/profits; imagine that laypersons have to pay to use street light, too much pollution, hospitals charge exorbitant prices, schools will be closed to those who cannot afford etc.  These happen because the money supply now is controlled by the so called free market.

[Kakashi2020]

5 hours ago, cks003 said:

It is not the Government is threatened by the Bitcoin, it is the very livelihood of a laymen on the street who will be affected if the virtual coin is widely used.  Government through central banks around the world use monetary and fiscal policies to either increase or decrease money supply.  It can be interest rates, tax, printing more money etc, and the daily borrowing/lending costs, transaction costs etc are in turn affected.  The free market was the main culprit that brought down the economy in 1929s, and the episode gave birth to mix economy.  The role of the central authorities with cooperation from the private sector ensure the smooth running of the economy.  Without the check and balance from central authorities, private sector will reap larger than usual benefits/profits; imagine that laypersons have to pay to use street light, too much pollution, hospitals charge exorbitant prices, schools will be closed to those who cannot afford etc.  These happen because the money supply now is controlled by the so called free market.

I do partially agree with you that free market posts dangers when unchecked.  But if it's side by side with controlled banking, I think such dangers could be minimized.