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Comment by wtbob | Hacker News Reader

> Understandable, but wasn't this always going to be inevitable given people treating BTC as an investment for USD instead of as a crypto currency?

Fundamentally inevitable, no — there's no inherent reason for countries to care about the movement of currency — but practically inevitable, yes. As long as we have such financial 'crimes' as money laundering (which is only against the law because it's easier to prove than the real crimes it's designed to hide), we're going to have KYC requirements and all the rest of the incumbent-protection measures which make it so hard to have a financial startup.

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> there's no inherent reason for countries to care about the movement of currency

Wouldn't appropriate taxation give them reason? Say, for example, buying cigarettes in a US state with a high sin tax. Or suppose a workplace that pays employees in BTC; how do you apply holdings to that?

I would imagine that if it gain significant traction, it would warrant interest.

Fundamentally, governments don't need to tax currency movement. If they implemented a flat income tax only, or even better a flat consumption tax, it could survive off a single tax and not need to worry about income or movement.

Mmm, understandable position.

I guess I must admit that my original statement came with an assumption of "BTC deployed in the current real world setting." I do agree that given the scenario you and the other commenter provided would not require government scrutiny as they would have no interest.

Though, also both scenarios exist as "what-ifs" of the real world and an ideal world setting for BTC, not an idea use scenario for BTC>

With an inflatable currency, a government could always just inflate its currency in order to fairly tax everyone who holds any of it.

It's also possible to build an anonymous, auditable cryptocurrency such that a government can verify that taxes on transactions have been paid, but not not know the identities of the transactors unless they don't pay. Which is pretty neat.

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