Cryptocurrency regulation problems

The problem starts with the question of control. Bitcoin at its core is a decentralized record of transactions. The value cannot be set at a certain level by a controlling authority; the way that governments and central banks manipulate and control the value of fiat currencies through monetary policy.

The second problem is anonymity of account holding. Bitcoins are issued into wallets that are maintained at an IP address rather than in the name of an individual. Governments can find out how much money an individual has by getting a record of all of their bank accounts. They cannot do the same with cryptocurrencies.

Some believe that Bitcoin and other cryptocurrencies are designed in ways that will make it almost impossible to regulate them. This is a big problem for governments for one main reason: calculation of taxes.

If people shift their holdings on to an anonymous ledger of records, how would the government know how much wealth is held by an individual? If the government cannot find out the income and wealth of an individual, they will not be able to calculate how much tax is due on them.