I Predict The Financial Establishment Will Crash Bitcoin

The reason no government is going to allow this currency to gain major steam is one thing and one thing only:

Taxation.

Government is not going to allow people to use a currency which prevents them from getting their share.

 

Isn't that an easy question?

Once opening an account, one would credit that account with any bitcoins received in trade for dollars, yen, services, goods, or whatever.

 

Right, and it's that transaction that will get you caught.

 

Bitcoins don't exist. I can't acquire them.

 

Well, right now I think the major issue driving the move against bitcoin management practices is money laundering (drugs) and terrorism.

But, I agree that using bitcoin to avoid taxes isn't something that a government is going to see as an improvement.

Money tracking is one way of ensuring that taxation is as equitable as the legislative body can make it. And, dodging those checks on equitability means the legislature involved is going to have to take action of some sort.

This isn't something new. We have all sorts of tax dodges, and legislatures work to ensure that taxation is equitable and that the objectives of the population are met.

 

If you have enough bitcoin, can you use it to buy a car?

When you use your credit card, did the money exist when you bought the item?

 

You can buy it with dollars. PM me if you want details.

 

Exactly.

No government is going to allow a currency that they don't control.

That's why you can't walk into 7-11 in California with 1000 Yen bill and buy a sandwich. You can exchange it, but only in certain locations that can verify it's real, and for a fee.

 

Right. And that transaction will be recorded.

They're asking me how people could get caught using bitcoin if it were illegal, and the answer is always in the transaction.

 

Actually, there is a record of the movement of every bitcoin called the blockchain. And governments can and no doubt do access it. But there are techniques that can obfuscate that movement.

To me, it seems like the attractiveness of bitcoin comes from this lack of regulation (allowing easier access to banking for criminal use) and in the volatility that makes an opportunity for trading that those who manage dollars work against.[/QUOTE]

 

Government branches of the US and other nations are stating that they need to take corrective action against bitcoin because of the problem of money laundering and movement.

The agencies involved (such as the DEA) point to what it means to their efforts to control crime.

https://www.reuters.com/article/us-...in-under-money-laundering-rules-idUSKBN1DY0Y2
https://www.dea.gov/divisions/hq/2017/hq072017.shtml

 

I agree that such a record could exist - and probably does exist.

However, if it were that easy I really doubt the DEA, the UK, and the rest would be upset.

 

Well the problem is that it's international. That would mean they wouldn't have access to the transactions.

I mean if a Libyan slave lord sells some girl for 50 bitcoin that's going to be hard to track.

 

And to avoid paying taxes, which is definitely going to get you on the short list of the IRS.

 

I have no idea.

No, you take on a debt when you use a credit cared.

 

In whose account will it be recorded?

 

It's the blockchain. You might want to read up on it, it's a long explanation kinda.

 

I don't know about a dollar limit on that. I'd bet that there is at least a limit that would require a federal report.

I have purchased products and services in other countries with US dollars and I've spent Canadian currency in US stores.

 

You can, so clearly it exists. No one is going to give you a car for something that doesn't exist.

http://spendbitcoins.com/places/c/car-dealers/

Yeah, I meant debit card, not credit card. Regardless, the way you are paid (usually direct deposit), and the way you pay for things via electronic payments, is not real money either. It's an electronic representation of real money, which itself has no inherent value.

 

Sure, in limited cases you can do that.

There were plenty of bars right outside the bases in Japan that take dollars, but you can't walk into the train station and buy a ticket with it.

 

OK. So, the fact that the blockchain is a distributed world wide system doesn't include world wide access to all accounts?

Yikes.

I don't really feel like I need to understand the system entirely. I don't understand our federal currency system in great detail, either, obviously.

It's more that when some issue exists (like money laundering) I have to have some trust that the various nations involved are limiting their regulation to fixing the problem. And, there are reasons for that trust. For example, excesses in US regulation of banking aren't going to be appreciated by other nations, and could put at risk the standing that our currency has in denominating trades.

 

It's one of the scariest things you can look at in detail. It'll keep you up at night for sure. I hate even thinking about all the implications. What scares me more is that I know I don't understand it as well as I should, so what am I not seeing?

 

Yes, If it gets real, they will destroy it.

No doubt about it.

 

So they would have to look thru all the accounts in the blockchain to find the transaction. Sounds like a needle in a haystack.

 

It is possible to get bitcoin anonymously and use it anonymously. It is more difficult to do so in large amounts and many transactions.