Cryptocurrencies like Bitcoin can provide excellent alternatives to state currency monopolies like digital money.
Many governments are concerned about Bitcoin and have continually tried to suppress its growth. Despite these attempts, it has been relatively impossible to suppress Bitcoin and ban 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 Can’t Stop Bitcoin?
Despite significant concerns about the illegal use case of Bitcoin, the cryptocurrency was created to solve fundamental problems facing fiat currencies since the introduction of paper money.
The Blockchain is meant to provide immutability, preventing Bitcoin interference in 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 and largest cryptocurrency; all others are often referred to as ALT coins, an alternative to Bitcoin.
Why Most Governments Like to Stop Bitcoin
Governments thrive on three main aspects that seem to be severely violated by the invention of Bitcoin: the ability to regulate capital, control capital, and prevent illegal activity through transaction monitoring. Central banks, along with investment banks, commercial banks, and other financial institutions, are responsible for monitoring transactions.
Conventionally, it was difficult for criminals to use banks and any form of digital transaction to transfer funds to their associates. Since Bitcoin cannot be regulated or controlled, criminals freely transfer funds to anonymous addresses and governments cannot monitor these transactions.
Despite the availability of the public ledger, which means transactions are open and transparent, determining the actual owner of addresses is challenging. This feature of Bitcoin technology is highly undesirable for governments, which creates a strong motivation to ban it outright.
Furthermore, Blockchain technology is immutable, which means that once data is entered, it cannot be changed. According to Satoshi Nakamoto, the creator of Bitcoin, the feature was designed to build trust within the Blockchain. Transactions are also open and available to everyone within the network. These are arguably undesirable for secretive regimes and governments that are often involved in dubious deals hidden from the public.
Bitcoin allows people to transact across regional borders without taxes, which hurts the government. For these reasons, it is doubtful that governments will embrace Bitcoin as it is; instead, most governments will continue to find ways to regulate it or ban it outright.
Can Governments Stop Bitcoin?
Various movements have attempted to regulate Bitcoin with no real success. The regulations have cited the large carbon footprint contributed by the proof-of-work consensus mechanism used by the Bitcoin network.
The government is interested in controlling Bitcoin transactions as it is a threat to the economy of any country and the power of the government.
Considering the infrastructure of Bitcoin, governments cannot stop Bitcoin. Many governments can ban Bitcoin, as they have, but complete eradication of the projects seems far-fetched.
Given the evidence, since Bitcoin is evolving on its own and people are willing to adopt the technology, there is nothing that movements can do to stop the revolution. Needless to say, however, 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 fiat currency.
By Audy Castaneda
