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Most, if not all governments, have some form of sales tax. What happens to bitcoin value when governments prohibit use of bitcoins to curb evasion of taxes

marked as duplicate by Nate Eldredge, Community Jun 1 '15 at 12:05

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    I'm not sure whether your question is based on a valid assumption: You seem to be assuming that Bitcoin inevitably leads to huge amounts of blackmarket sales, but why should that be the case? You could make the same argument about cash payments, which doesn't pass the giggle test. Why wouldn't the Government take VAT just as with any other sale? If you just want to discuss what happens if Bitcoin usage is declared illegal, I've linked some similar topics. If you want to check your assumption whether Bitcoin inevitably leads to blackmarket transactions, you might want to edit your question. – Murch May 30 '15 at 11:32
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your premise that governments will ban bitcoin to curb evasion of taxes is invalid, but I will attempt to answer your underlying question:

"What happens to bitcoin value when governments prohibit use?"

Just regarding value (compared to State currencies):

The value drops based on investors getting scared and mass selling.

The value rises as fiat currencies continue to inflate and the need for Bitcoin continues to exist.

Governments can't prevent people from using Bitcoin. They can make laws, but it doesn't affect the need for stateless forms of exchange.

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