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Cryptocurrency will cripple governmental ability to collect taxes, and they wont see it coming. When its already happened, expect major changes to take place in how society is organized on a large scale but also expect governments to act in desperation to retain control.

As bitcoin launched in 2009, most early adopters saw its disruptive potential. While bitcoin has stalled for some time approaching a valid use of the term stagnation, cryptocurrency in a larger context is still just as disruptive. In 2011, I stated that bitcoin (cryptocurrency) will do to banks what e-mail did to the postal services. This is not just true, but it will be even more brutal to governments, and by extension, governmental services.

Now, governments love anything that smells like innovation, because it means jobs, this magic word that smells of magic unicorns to anybody in government. Therefore, people who like innovation are nurturing this bitcoin thing, this cryptocurrency thing, this ethereum thing (as if governments made a difference, but still). Lots of startups in tip-of-the-spear financial technology means that their government may get a head start over other governments. They have no idea that cryptocurrency will radically scale back the power of government, not just their own one, but also all those other governments over which it seeks a competitive edge.

Individual people in government can also love bitcoin because it gives them something to do. More specifically, it gives them something to regulate. Fortunately, other people in government see that this gives them something to do, which is to hold those government regulators with an overdeveloped sense of order somewhat in check. Youll hear no shortage of wannabe regulators saying that bitcoin is bad because its being used in crime and contraband trade!, to which I usually respond, well, bitcoin is a currency, so I mean you put it in relation to the US Dollar, which then is not used in crime and contraband trade, is this the argument youre using to support your position?, at which point the discussion generally changes topic.

This completely disregards the observation that bitcoin and cryptocurrency were designed to not submit to regulation in the first place. Well, at least not governmental regulation. It is heavily regulated but by its source code, and by its source code alone.

The reason this will cripple todays governments todays idea of what a government is and does is because todays economy is built on one layer doing actual work and three layers of abstraction on top.

At the first and bottom layer of our economy are the individual people doing all the actual work.

The second layer on top of the first is the abstraction we call corporations, which is a way to organize our economy and optimize transaction costs.

The third layer on top of the second would be banks, which handle money for corporations and individual people in a middleman gatekeeper position.

Finally, the fourth layer is the government, which takes advantage of the banks gatekeeper position to siphon off taxes from money flows in order to fund itself and governmental services. In other words, layer four completely depends on layer three for its operations or at least for the relative simplicity of funding its operations.

Now, what bitcoin and cryptocurrency do is make away with the banks cutting them out of the loop entirely, making them redundant, obsolete, dinosaurified. This resulting absence of anything where banks used to be creates an air gap between the functional part of the economy people and corporations and governments who want funding.

The way governments want to tap all money flows in order to fund itself is not entirely unlike how the surveillance agencies want to tap all information flows in order to have an information advantage. In this way, the deployment of cryptocurrency is to tax collection what deployment of end-to-end encryption is to mass surveillance. The government can no longer reach into money flows and grab what it wants, but will be dependent on people actively sending it money. The government cant point a gun at a computer and have it give up its money; you can only make a computer operator feel very sorry for not voluntarily producing the keys to that money. So the government is no longer able to collect taxes without the consent even if coerced and forced consent of the people being thus collected.

The deployment of cryptocurrency is to tax collection what deployment of end-to-end encryption is to mass surveillance.

Governments, and individual people in government, have no idea about this bigger picture. Theyre far to wrapped up in things-as-usual to notice. They wont see it coming until its already happened.

When this happens, there will be no shortage of people in government who suddenly want to regulate cryptocurrency only to find out it will be as effective as regulating gravity. When this happens, government as we know it will be redefined from a coercive Colossus able to take what it wants and do what it wants into a construct that actually depends on people wanting to fund it. This will be a very interesting time to live in. While todays governments will see themselves as getting crippled, I suspect most citizens will regard it as unquestionably healthy that governments will actually begin to depend on the approval of the people at large.

Were just beginning to see the changes to society that the Internet brings. This is one of them.

(Note: I write cryptocurrency and not bitcoin on purpose here, just as Id prefer proclaiming the success of social media over the success of Myspace.)

Rick is Head of Privacy at Private Internet Access. He is also the founder of the first Pirate Party and is a political evangelist, traveling around Europe and the world to talk and write about ideas of a sensible information policy. Additionally, he has a tech entrepreneur background and loves good whisky and fast motorcycles.

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How cryptocurrency will cripple todays governments and ...

Ticino, the southernmost canton of Switzerland, is planning to issue its own local digital currency for everyday use. Its circulation may be confined to Ticino territory.

The future cryptocurrency called ticinocoin (TIC) is a brainchild of computer scientists Claudio Rossini and Michele Fiscalini. The developers have already tested the currency: the pilot phase of the project was completed last week, reports Tribune de Geneve. Regional virtual currency based on the blockchain technology is expected to stimulate the local economy offering faster, more transparent and less expensive transactions. According to Fiscalini, circulation of TIC may be limited to local services and products from Ticino.

The expected exchange rate of TIC is one Swiss franc. However, operations with ticinocoin may require obligatory authorisation by FINMA, the Swiss monetary regulator.

Ticinocoin is not the first local currency in Switzerland. In 2015, Lmanic Arc introduced the regional currency Lmans. Now it accounts for more than 100,000 units in circulation. The launch of the electronic version of Lman is due in March. Another Swiss region, Valais, may introduce its own complementary currency Farinet in 2017.

Switzerland, the home of Xapo, Ethereum and ShapeShift, is regarded as a haven for cryptocurrencies and blockchain technologies. In May 2016, the City Council of Zug in the east Switzerland launched a pilot project allowing to pay for municipal services with bitcoin. During the initial phase of the programme, the maximum amount payable with the cryptocurrency was limited to 200 Swiss francs. The city authorities are not opposed to extending the experiment to other cryptocurrencies.

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Swiss canton to launch its own cryptocurrency - Finextra - Finextra

Cryptocurrency hardware wallet KeepKey announced in a press release sent to CoinReport that it has integrated cryptocurrency dash.

Those using KeepKey can now receive, store and send their dash on their KeepKey devices, and via the built-in ShapeShift function, swap between other digital currencies like bitcoin, dogecoin, namecoin and litecoin.

Dash currently has a market capitalization of over $120 million and stands seventh on the most valuable digital asset list. In September and October last year, the median 24-hour volume trading of the cryptocurrency was about $680,000. In November and December, the amount almost doubled. Now, in the first quarter of 2017, its averaging about $2 million per day.

KeepKey founder & CEO Darin Stanchfield

Partnering with Dash is the natural next step for KeepKey since our wallet is purely focused on security, mobility and convenience; attributes that Dash shares, said KeepKey CEO Darin Stanchfield in the release.

KeepKey protects digital assets from hackers by limiting their exposure to the internet. With this integration, we are extending our utility, and adding one more asset users can transfer to or from directly on our device.

Dash director of finance Ryan Taylor said on the occasion, As the ecosystem of services integrated with Dash continues to grow and mature, solutions to ensure user funds are stored as securely as possible is more important than ever. Because of Dashs unique capabilities and the announcement and execution of our software upgrade, weve experienced triple digit price appreciation, so many of our users will love having this option available to secure the growing value of their Dash.

We partnered with KeepKey because we aim to create the best overall experience for our users. The peace of mind and convenience that KeepKey can provide makes them a valuable addition to our family of partners. Their products also align well with our belief that the user experience should be a focus.

This beta release by KeepKey, however, will not support dashs InstantSend and PrivateSend functions.

We like to listen to the community and implement new technology in response to community requests and feedback. While hacks in todays global information age are pervasive, and so too is the rise of cryptocurrency, more and more people are investing in a digital vault for their valuable cryptocurrencies. Crypto assets vary in their characteristics, and attract the use of different audiences for different reasons. One thing we are certain of though is the trend for investing and holding multiple types of assets is becoming increasingly popular and KeepKey helps makes this both simpler and safer, Stanchfield added.

The entire digital currency market has almost tripled in value in a year, from $7 billion in January 2016 to more than $19.9 billion now.

Images courtesy of KeepKey via PR firm Wachsman PR

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Cryptocurrency hardware wallet KeepKey integrates dash - CoinReport