Ignore at your own potential peril..
BTCers don't care, apparently
https://coingeek.com/could-taproot-privacy-features-make-btc...
BTCers don't care, apparently
https://coingeek.com/could-taproot-privacy-features-make-btc...
Yes, the US and the EU could deem these cryptocurrencies to be illegal. However, as we saw in China, all that accomplishes is squeezing it out of your borders, or squeezing it to the black market. Making it illegal would also be an insanely strong signal to the entire world that this thing actually is uncontrollable by our current governments, and that they're scared of it.
Knowing they can never actively kill it, just drive it elsewhere, these societies have to take a gamble. Either assume it's eventually going to wither and die after they ban it, thereby protecting their citizens from wasting time and money on the system, or assume it's going continue to grow into being the foundation of a new global monetary system that's going to automate and consume everything that's existed before, and severely miss out on being at the vanguard of that industry.
As long as there's a critical mass of users somewhere, the "who accepts what" problem reduces to a software problem that most people will ignore.
Consider BTC-backed debit cards, which give the illusion of paying in bitcoin where only fiat is accepted by converting the tokens at transaction-time. For a government to prevent things like that will require that government's citizens to bear costs that other citizens don't:
- pay the regulators to keep crypto disconnected from fiat
- pay the payments companies to hire people to comply with the regulators
- tolerate the necessary censorship and subsequent unrest when it is abused
This kind of nonproductive spending will hash out as a drag on that government's currency. It wouldn't be crazy for its citizens to start stocking up on crypto (perhaps illegally) as a hedge against local fiat-collapse. Surely a downward spiral for the local crypto user experience, but a problem for BTC as a whole? I don't think so.
Bitcoin is not an alternative payment system. People keep getting confused on this point, partly because of how bitcoin was marketed in the early days (there obviously is no marketing team, just passionate people telling their stories about what they thought it was).
Bitcoin is the bedrock of an alternative monetary system. Visas and AmExes will be built on top of it, just like they are built on top of dollars.
And the analogy is not Visa competing with AmEx. It's the dollar competing with the Renminbi or Euro.
But that's no more likely to be true than for a USD-rich person. Whatever ill-gotten USD gains have occurred in the past are easily transferrable to BTC, which means that its really just an alternative portal into the same monetary system, or perhaps the next evolution thereof. The only difference is that this time it doesn't have anybody behind the monetary-policy steering wheel.
All that mass lives in EU, US and China, and nowhere else, that’s where the argument breaks down. You can buy a nice rc toy with bitcoin, but some day you may need a place to live in and they will ask you where you got the money from. And you’ll say, ah, that’s from that illegal btc exchange.
As long as you're willing to pay taxes on it as income when you bring it back into whatever system banned it, or whatever system replaced that one, you're going to be able to do it.
Semi-serious jokes aside (the block stream satellite can receive blocks but not broadcast), the protocol can operate under Tor in which the bitcoin core daemon is very well integrated. If worst come to happen, sneaker net is somewhat popular (https://opendime.com) and people have transacted using radio waves as a proof of concept (https://satoshi.radio.br/wp/).
Surely governments would target exchanges instead?
Without the dollars coming from retail investors, the value proposition for speculators disappears.
You could still trade bitcoin (slowly) at that point, but converting to fiat would be difficult.
Does that mean I can then exchange it directly with others without incurring a capital gains tax event?
Point is, shutting down legal exchanges won't happen in the US. Since you can't kill the underlying system or stop people from using it, you only make it impossible to tax.
You could broadcast it on any communications medium. You could theoretically run it over a global ham radio mesh network.
Lots of the network is already running on Tor, so you'd also have to shut that down.
You could embed the information in the pixels of cat pictures and broadcast it via instagram posts.
Unless there exists a global, horrifically authoritarian constriction on the information we are allowed to share, it's not going to happen.
Fortunately, CeFi exchanges are less of the volume these days than DeFi and institutional OTC. When I was using institutional OTC in the United States, they would make markets for me in Monero if I asked. If I said "I want to trade this random erc20 altcoin for Monero" they'd say "say less, we got you", and quote me a very competitive price. Same for moving dollars in and out.
But I've been using DeFi AMMs all year.
The DeFi bridges for bitcoin are fine as well. There are only 1 or 2 permissionless ones for Bitcoin itself, for now, but they're okay. Moving a few billion in volume already this year. The permissioned ones operate under the same risk profile and regulatory profile as exchanges do, so its not a deal breaker if you already use CeFi, and the user experience on any bridge can still be better - depending on what you want to do.
Even Monero has a permissionless bridge too now, on the Secret Network. so you don't even need any exchanges or those sketchy centralized swapping services to move in and out of Monero anymore, and from Secret Network you can bridge to the broader DeFi ecosystem.
This should get even better.