Quite simply because law doesn't work that way. Laws apply to future new things as well as existing things; being new doesn't make something exist outside of current law and law doesn't regulate things with technology, but with law. The ability to jail people is how and why law works and you can't tech your way around that. They don't need to technically be able to stop something because they have the means and ability to enforce these things socially.
Because governments rely on the ability to tax financial exchanges to finance themselves. Not saying it's right, but it's the crux of their power and income.
The most decorated soldier in american history is Smedley Butler. Two medals of honor. He wrote a book, "war is a racket" where he comes to the conclusion that his entire career was to further the interests of big money and elites.
We peons don't get to really choose who governs us, never mind to have government. But if belief in "the consent of the governed" comforts you, go ahead and down vote me.
War is a racket, and we consent to it. We peons as a whole are ignorant and easily misled, consent is easily manufactured. Consent of the governed is not matter of belief, it's simply a fact they operate with our consent for our consent is the source of their power. Smedely Butler is correct, but his statement does not support your argument in any way.
And murdering someone is just applied physics... Of course they can do things to regulate mathematics. Hell they can regulate Knowledge itself, just look up the "born secret doctrine". Through the sanctioned monopoly on violence, the government is given final rights over everything via their ability to leverage the threat of violence.
Well not according to the US' citizenship test which states that the constitution is the top law whilst defining the rule of law as no entity, including the government, being above the law.
That's the theory anyways. In reality, might makes right now more than ever (there's a very interesting article from MIT about if technology fosters democracy. They conclude no)
The constitution is what grants them that power. The executive branch is charged with enforcing the laws of the legislative branch according the main body of the constitution and the 16th amendment says they can tax your income. Taxing bitcoin is something the constitution says they can do.
They cannot destroy it but they can hinder it in major ways and drive it underground. For example if major governments announced that they're banning bitcoin it would drive off a lot of users and we would have to find ways around their legislation. Major exchanges will have to go underground, it would be a lot harder to buy bitcoin, maybe the value would drop.
What would 'banning bitcoin' even mean? All that is required is the computation of a number and its transmission to the blockchain. It's impossible to block such a message without blocking all other communications.
likely, "banning bitcoin" would take the form of barring companies from accepting it. It definitely changes the value proposition if Amazon, Target, Overstock, Subway, TigerDirect, Home Depot, etc. can no longer accept bitcoin as payment. There's no need to mess with the blockchain if you can simply eliminate mainstream use and force it onto black markets.
> What would 'banning bitcoin' even mean? All that is required is the computation of a number and its transmission to the blockchain. It's impossible to block such a message without blocking all other communications.
Government prohibition of an act rarely involves blocking all instances of the act (in fact, if the government could effectively make an act impossible, it wouldn't need to prohibit it.)
So the question here just seems to miss the entire idea of legal prohibitions.
Make it illegal? Break down our door and take your computer and coins? Raid the service that holds your coins? Put you in jail if you refuse to give up passwords?
You miss the point, they don't regulate Bitcoin, they regulate citizens. Just because you can't stop something completely, doesn't mean you can't outlaw it. Bitcoin, like all commodities now and in the future is taxable under current law because the law taxes all income of any form except things we say you can deduct. That means it covers new forms of assets as well as existing ones. Not paying your taxes is illegal and is more than enough threat—as it always has been—to make citizens obey the law.
Law is social, nothing is outside of existing law and being math can't change that because law is based on what is or isn't mathematically preventable.