Many governments are concerned about Bitcoin and have continuously made attempts to suppress its growth. Despite these attempts, it has been relatively impossible to suppress Bitcoin and prohibit the general public from using it. There are multiple reasons why central governments would seek to control or even potentially stop cryptocurrencies in general. The most common reason for federal organizations to take a keen interest in Bitcoin is to regulate money laundering, among others. Should you worry that governments cannot stop Bitcoin?
Despite significant concerns about the illegal use case of Bitcoin, the cryptocurrency was created to solve fundamental problems faced by fiat currencies since the introduction of paper money. The general blockchain technology is meant to provide immutability, preventing the interference of Bitcoin across all regions. The power is essentially transferred to the owners of the digital currency, who then collectively determine how much a single unit is worth based on supply and demand. BTC is the most common as well as the largest cryptocurrency. All other cryptocurrencies are often referred to as ALT coins, an alternative coin to Bitcoin.
Since its introduction by Satoshi Nakamoto in 2019, the digital asset has grown relatively increased in value with an impressive return on investment. Although many still do not understand how Bitcoin can be used as a currency, it has undoubtedly convinced many people that it can be used as a store of value, just like Gold and other investment products.
Governments fear losing control of money if Bitcoin becomes mainstream. While Bitcoin can be entirely replace all currencies in the world, BTC is undoubtedly instrumental. The future of finance is intertwined with the future of Bitcoin. Apparently, the infrastructure around the technology makes it extremely difficult, if not impossible, for governments to stop the Bitcoin revolution.
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Why most governments like to stop Bitcoin
Governments thrive on three major aspects that appear to be gravely violated by the Invention of Bitcoin. Most governments rely on the ability to regulate capital, control capital, and prevent illegal activities through monitoring transactions. The Central banks, in conjunction with investment banks, commercial banks, and other financial institutions, are responsible for monitoring transactions.
Conventionally, criminals found it challenging to use banks and any form of digital transaction to wire funds to their associates. Since Bitcoin cannot be regulated or controlled, criminals freely transfer funds to anonymous addresses, and governments cannot trace these transactions. Despite the availability of the public ledger – meaning the transactions are open and transparent – it is a challenge to determine the actual owner of the addresses. This feature of Bitcoin technology is highly undesirable to governments, leading to the high motivation to ban it completely.
Additionally, blockchain technology is immutable – meaning once data is entered, it cannot be changed. According to Satoshi Nakamoto, the creator of Bitcoin, the feature was designed to encourage trust within the blockchain. Transactions are also open and available to everyone within the network. Arguably, these are undesirable for secretive regimes and governments that are often involved in dubious dealings hidden away from the public.
A government that relies on Bitcoin alone will have to deal with questions about movement of funds from A to B. The demand for allowing public scrutiny of transactions could increase accountability for illegal government operations. However, most unauthorized government expenditures have often been kept secret to prevent public exposure of corrupt politicians.
Finally, the Bitcoin ecosystem cannot be regulated in its current form; the blockchain is immutable, preventing any form of government interference. It allows users to send and receive cryptocurrency without government interference. The Bitcoin ecosystem allows people to transact across regional borders without tax which is hurtful to the government. Based on these reasons, it is doubtful that governments will embrace Bitcoin as it is; instead, most governments will continue to find ways to regulate or totally ban it.
However, can the government really stop Bitcoin? Well, let’s find out!
Can the government stop Bitcoin?
Several movements have attempted to regulate Bitcoin with no real success. There have been multiple crackdowns in the east for Bitcoin miners. The regulations have cited the vast carbon footprint contributed by the proof of work consensus mechanism used by the Bitcoin network.
It is undoubtedly true that PoW consumes a lot of energy and negatively impacts the environment. However, the PoW consensus is arguably the most secure consensus rule protecting the Bitcoin network. The government is interested in controlling Bitcoin transactions as it is a threat to the economy of any country as well the power of the government.
Essentially, the authorities are entrusted to handle fiat currencies by the general public. Citizens, for instance, in the US, entrust the governments and the federal reserve to manage the US economy by controlling the printing of fiat currencies, and regulating interest rates, among others. Bitcoin circumnavigates all these authorities and provides the direct value of a currency to the citizens, eliminating the need to have a government as a central authority to govern how money is transacted or used.
Arguably, this has consequences, as governments could be rendered entirely dysfunctional without the ability to control local funds. However, the Bitcoin network aims to promote transparency, eliminate control and encourage free spending.
Considering the Bitcoin infrastructure, governments can’t stop Bitcoin. Many governments can ban Bitcoin, as they have, but the total eradication of the projects seems far-fetched. Since Bitcoin is evolving on its own and people are willing to adopt the technology, the movements can do nothing about it to stop the revolution. However, it is prudent to say regulations can be put in place to limit the use of Bitcoin within a specific jurisdiction in a country’s efforts to maintain control of the fiat currency.
Worried about the Bitcoin ban?
Bitcoin transactions have continued to increase over time, and the general public has continually bought into the idea of freedom. It provides an alternative to the relatively unstable fiat currency that continues to depreciate over time. Bad money printing policies have particularly hurt fiat users, and many have continued to look for alternatives.
Bitcoin users should not be worried about a potential Bitcoin ban as Bitcoin-related businesses have continued to exist regardless of government reluctance to accept it. Arguably, Bitcoin has faced massive resistance from authorities since its introduction in 2009. Despite the obstacles, the network has grown significantly, and critics understand bitcoin’s importance.
Most governments have shifted their stance from resisting Bitcoin and instead looking for better ways to ensure it. Bitcoin is integrated into the system. Cryptocurrencies like Bitcoin can provide great alternatives to state currency monopolies such as digital money.
Today, Bitcoin is continually partnering with relevant companies to make it easier and more accessible to use crypto payments. Recently Mastercard started partnering with Banks to make crypto payments more accessible to people. Bitcoin will undoubtedly be at the forefront as the most popular cryptocurrency with the largest market cap.
How Bitcoin can withstand pressure from government regulation
Just like other financial assets, Bitcoin has can be accepted by the central bank as long as it follows regulations. For instance, the need to implement Know Your Customer is critical in mitigating the risks of using Bitcoin for money laundering or any illegal activity.
Conventional financial transactions made through regular financial institutions are easily traceable since the database is accessible by the government. In cryptocurrencies like Bitcoin, relative transparency is higher compared to fiat transactions. For governments, the concern to have control is legitimate, as it threatens national sovereignty if control is lost. Bitcoin can act as an alternative currency that is equally accepted within society with no resistance from those who wish to. Citizens who wish to avoid the pressures that state currency monopolies exert can alternatively use Bitcoin as a secure, acceptable, legal digital currency.
The fundamental features of blockchain technology, which ensures transactions are transparent, verifiable, and immutable, make Bitcoin a trustable cryptocurrency. The ban on Bitcoin is majorly expected from authoritarian governments or regimes that haven’t quite figured out how to integrate it into their economy.
Despite the motive to ban bitcoin in many countries, the cryptocurrency transcends beyond borders and allows users to interact independently. Bitcoin has managed to thrive despite the global regulatory competition that has limited its penetration into conventional financial institutions like banks. Bitcoin self regulation is highly desirable and increases trust among its users, making it a solid digital asset with acceptance across the globe.
Conclusion
The Bitcoin and cryptocurrency revolution has been in existence for quite a long time, and the movement is still on. Along the way, crypto enthusiasts have faced tremendous resistance from governments that seek to limit or control the usage of cryptocurrencies like Bitcoin. In many countries, Bitcoin is majorly used within P2P and decentralized finance platforms.
Many financial institutions are unable to facilitate crypto adoption due to regulation by the Central Bank. Despite these limitations, Bitcoin adoption has transcended, and today, some countries have begun to embrace it and accept Bitcoin as a mode of payment.
