Bitcoin News discusses a Russia Proposal to Crackdown on Bitcoin

Details

  1. People face seven years in jail and fines of as much as $7,000 for utilizing BTC in monetary transactions.
  2. Penalties apply to buying crypto with cash or transferring to accounts opened with Russian banks.
  3. For corporations buying Bitcoin without approval from Russian central bank (there won't be any approvals), fines are as much as two million rubles or about $28,000.
  4. One of proposals is to fully cease digital property from being used at all. in transactions.
  5. People who already hold digital assets will be forced to register them with Russia’s tax agency and explain how they acquired them. 

What's It Mean Now?

  • Immediately, not much, outside of Russia. 
  • Those inside Russia will have to choose to violate the rules to transact in Bitcoin. 

What's in Mean in the Future?

  • This is another huge warning shot along the lines of what I suggested before. 
  • If China, the US, or the EU enacts similar legislation, the price of Bitcoin will crash.

Bitcoin Supporters Cannot Answer One Simple Question

I have discussed the issue at hand previously, most recently in Bitcoin Supporters Cannot Answer One Simple Question

What would happen to the price of Bitcoin if the US did not allow merchants and banks to make Bitcoin transactions?

That's a very simple question that I have been asking for months. My reason for asking is based on a simple premise:If central banks or governments are ever threatened by Bitcoin, they will destroy it.

Playground Responses

ReadBTC Bitcoin

That reads like a third-grader response "If you don't know, I'm not going to tell you".

Peer-to-Peer Unstoppable Silliness

Bitcoin Cash is a peer to peer cash System

Wonderful. 

People can barter with Bitcoin much the same way someone could trade eggs for shoes. Supposedly, that makes Bitcoin "unstoppable".

Under a transaction ban scenario that I have suggested, the government will allow you to keep your bitcoin, it just will not let let banks or stores deal with Bitcoin transactions.

You can send your bitcoins to whomever you want. But try getting US dollars or Euros in or out, in size without reporting it immediately.

Central Banks to the Forefront

Please consider ECB’s Weidmann Urges Euro-Area Banks to Battle Facebook’s Libra

European Central Bank policy maker Jens Weidmann, who heads Germany’s Bundesbank, has long called for caution over private-sector digital currencies and his comments echo concerns among officials from Europe to the U.S. over Libra, a planned digital token backed by multiple national currencies.

I’m not in favor of always immediately calling on the state” to come up with solutions, Weidmann said in an interview with German newspaper Handelsblatt published Thursday. “In a market economy, it’s up to companies to develop products that meet customer demands.”

Weidmann Translation

In case that was not obvious, I offer this proper translation: "I am immediately calling on the state to deal with the threat of cryptocurrencies".

Free Market Construct

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For the record, I am against what Russia did, and am against regulation of Bitcoin in general. 

After all, Bitcoin is a free market construct. 

My warning is in regards to what I believe central banks and governments will do, not what they should do.

I have nothing against Bitcoin.

But under the guise of stopping money laundering and illegal activities such as porn or drugs, more crackdowns are coming. 

Russia clearly wants to crack down on capital flight and so does China but so far both have been feeble. 

When China, the EU, or the US decides to crackdown on Bitcoin with a heavy hand, we will find out just how much "peer to peer" bartering is worth. 

Here's a hint: not much.

Misunderstanding the Supply of Bitcoin and Gold Leads to Silly Projections

Bitcoin Supply Will Increase until 2140

The above chart from BitcoinWorldwide.

Also, please consider Misunderstanding the Supply of Bitcoin and Gold Leads to Silly Projections.

Bitcoin proponents will tell you the supply of Bitcoin is falling. Bitcoin did recently "halve", that is the amount of Bitcoin one received for successfully mining block just fell in half.

However, supply, not counting lost bitcoin wallets, will continue to rise every day until 2140 when the last Bitcoin will be mined.

Anyone who tells you the supply of Bitcoin is falling does not understand supply. The rate of new supply is falling but total supply is rising.

Primary Warning

To return to the main point, "If central banks or governments are ever threatened by Bitcoin, they will destroy it."

The process has started. Warnings are in place from Russia, the ECB, and central banks in general.

Central Bank Digital Currencies On the Way

On May 20, 2020 I commented Central Bank Digital Currencies On the Way

Six countries have digital currency pilot programs in place. Canada is in development mode while the US lags.

Act of Faith

Believe what you want, and you will, if you are a true believer because Bitcoin is Now an Act of Faith impervious to logical flaws.

OK proponents, in light of the new warnings, have another shot at the key idea: Bitcoin Supporters Cannot Answer One Simple Question

See if you can do better this time than peer-to-peer bartering. 

Mish

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