Why Bitcoin Could Be Banned or Criminalized in the Coming Years

The title is alarmist and IMO very, very unlikely (global economy, ban being practically unenforceable, crypto-native assets getting integrated in incumbent financial institutions etc).

That being said, the points raised and the concerns about harmful regulation is worth taking seriously.

More specifically, now with the digital assets "travel rule" ratified by the FATF (which is expected and on its way to result in legislation in most global jurisdications). A bit oversimplified: Any VASP (virtual asset service provider ~= private business holding, transmitting, issuing or exchanging digital assets on behalf of customers) are expected to request and verify information of wallet holders (the usual KYC/AML with name/passport/etc) for any ingoing and outgoing transfers. They are also expected to send this information onward to any other VASP they transfer to on behalf of users (e.g. if you transfer BTC from your Kraken account to a friends' Coinbase account, Kraken and Coinbase are on the hook to coordinate this information between each other).

In practice, forcing any business that touches digital assets to draconian regulation can be very effective in hampering adoption - IMO we've already seen a similar thing play out where tax requirements for both individuals and businesses coupled with regulatory uncertainty have made it an accounting nightmare to be fully compliant with retail payments in crypto.

I don't see an outright blanket ban on individuals holding or transacting Bitcoin. But overly restrictive and draconian regulation in some shape or form is very much likely.

The idea that the Fed would replace the USD with a decaying digital currency in order to disincentivize saving is pretty wild. People would be furious that their ability to save for retirement is being sabotaged in order to strong-arm them into higher levels of spending as a form of economic stimulus. People barely tolerate tax increases — imagine how angry they'd be if the government literally started taking money right out of their account purely as a way of manipulating their behaviour.

> I bring this up to remind you of the government we are dealing with, and the actions they take when times are excessively difficult.

They are referring to an action take in 1933. Almost everyone involved in that decision is dead, from the voters to the president is dead.

> The Fed aims for inflation to try to reduce the debts of the government.

The Fed aims to keep the economy at full employment and inflation stable.

> the Fed however, has had great difficulty in stimulating economic inflation in recent years, in large part due to the naturally deflationary effects of technology and automation.

The Fed has had problems stimulating inflation and growth recently recently. This has nothing to do with technology and automation and everything to do with interest rates being so very low. (which is caused by a global savings glut, and an aging population) Also we had no problem with deflation in the 70's even though we were also automating jobs and advancing technology.

> Now that you understand your part in the economy from the perspective of central banks and economists.

This isn't even a strawman. This makes me thing that he's never actually read a mainstream economists. And that his only experience with mainstream economics, is other people ranting about mainstream economics.

But the biggest critique of all, is that even if his "theories" (which are all a somewhere between wrong and a stretch) are correct the conclusion doesn't follow. Imagine we're in a depression and a large chunk of the populace prefers bitcoins to dollars. This will cause them to spend dollars, keeping people from hoarding dollars, and keeping the velocity up. This only really becomes and issue if salaries become denominated in bitcoin. And there are a lot of reasons you don't want to pay someone a bitcoin salary, and a lot of reasons you don't want to be paid a bitcoin salary. With one of the biggest being the tax implications.

Two of the largest and most powerful Lobbyists are the United States are the Motion Picture Association (MPAA) and the Recording Industry Association of America® (RIAA.) They didn't like every pleb across the entire world stealing every movie and song ever created. They tried to ban bittorent. They failed. So too shall bitcoin succeed. Disclaimer: I'm biased.

The article kind of lost me at times, but on the high level topic of (US) government regulation as an existential threat to crypto:

- The US government is very slow moving, and crypto is quickly gaining popularity amongst the voting public and institutional investors (with access to lobbyists). Once the gov't realizes that crypto is a threat and is able to position itself to form legislation, actually passing the legislation would piss off a lot of groups that the gov't is incentivized to make happy.

- Crypto is technological progress, and banning it would push innovation out of the US and into countries that decide not to regulate

- Banning crypto is an authoritarian act, and is basically an admission by the gov't that it prioritizes tight gripped control over our liberties (not that this point is actually all that unlikely...)

I'm biased, but Occam's Razor applied to the above points makes me feel like the banning of crypto is unlikely... Am I missing something?

This is obviously the way. Sovereigns will assert their control on any monetary asset. They have, they do and they will.

It is not that far of a leap to consider a timeline where all wallet addresses are simply registered and crypto assets lose their fungible quality. Assets in registered wallets will simply not be relayed to unregistered wallets. That simple. There will be an international wallet address clearing house. Hey Coinbase, want to keep your license to operate? Comply. Paypal? Comply.

You know this is coming. If you don't know, look up all the rules dedicated to banking and securities. Or simply remain blissfully unaware. They won't ban the technology. That's too pedestrian and 1934.. err 84. They'll simply control how you can use it.

The question is how does the crypto asset community rally to head this inevitability off at the pass.

IDK, reading stuff like below makes me discard the whole article:

> Saving money, whether in or outside of a bank, does NOT contribute to growth

Literally next line

> Taking out loans and new debt contributes to economic growth.

Where does the money for a load come from though? Does the author not see the connection there (making him kind of unfit to explain complex economic mechanisms), or just dishonestly ignores this part to support his thesis (which makes him unfit to waste my time)?

I was not aware we were in a Depression.

This is what happens when you go spend too much time on a topic and start believing every remote possibility to bring life to your conclusion. So many unlikely things have to happen for this to work - US $ cash completely phased out, everyone moving to digital currency, fed/cbdc setting rules such as savings cap to discourage spending, fed trying to track every possible transaction etc. I mean come on. This is the USA. People aren't even willing to be tracked if they are COVID infected - let alone widespread payment tracking in general. And savings cap? Good luck with that. He needs to talk to more people to get a diverse perspective on alternate modes in which fed can work - vs. believing his own conspiracy theories.

I appreciate the theory, but I believe that this time really is different:

- Bitcoin is widespread enough that many average people (Coinbase says over 10mil Americans have an account) own some amount.

- There is enormous distrust in institutions and government, which is why crypto is popular in the first place. Banning it would be extremely difficult politically and drive many conspiracy theories and further erosion in trust.

- The Supreme Court, and courts in general, have been packed by Republicans and have enough libertarian-leaning and originalists that doubt the centralized state, I'm unsure if a ban would be upheld constitutionally.

- In 1934 people were simply less educated than they are today with the internet at their finger tips, and news spreads fast. I doubt the gold ban would be possible today given the legitimate outrage vs. 1934.

- Crypto is far easier to store and use surreptitiously than gold is, and on a massive scale. Furthermore, offshore exchanges are extremely popular and are accessible globally. I'm not sure you can ban Americans from using every crypto exchange except US-regulated ones.

Government attempts to force everyone, at the point of a gun, to exclusively use tightly controlled, government manipulated "digital currency" will be a spectacular failure. Expect to see an explosion in bartering, the use of ad-hoc "currencies" (both physical and digital) and precious metals as this absurd scheme is rolled out.

Aside from the utter economic disaster that will result from central planners by the implementation of this scheme, just look at the situation in and around Nashville for the predictable disaster that will result from the first power or internet outage when legal, physical currency is eliminated. Without physical cash or a means of exchange it would be absolute chaos. This is perhaps the worst idea in history (which is choked with terrible ideas).

The article started with a good example but the conclusion is off. By the logic being used the Fed would need to ban the purchase of gold, bonds and many other assets to prevent saving.

I think providing programmable money to the masses could be really beneficial.

Unfortunately institutions exist to maximise control, and the horror of a CBDC just gets worse the more you think about it.

The financial elite are done taking everything of value from the little people. If they still want more, and they always do, they are going to have to go after their own kind.

REVOLUTION is the very real possibility if/when "negative interest rates" or "stealing citizens money" starts.

Citizens had all trust DESTROYED by the economic elites in 2008. A massive number of Wall Street and finance companies showed how corrupt and how much damage they cause real citizens. Trust is GONE.

Citizens will view that their money is being stolen. All of this is about draining more money from workers and transferring it to companies and the wealthiest 1%. Slavery is when the powerful financially steal workers earned money, against their permission, in an unjust way. In a way that is a system of theft is from poor workers over to the wealthy.

That leads to revolt. Every time "negative interest" goes through your brain, force yourself to replace it with "stealing that causes revolt". It gives you a chance to wake up to see how workers will view it.