April 6th, 2018
Bitcoin is currently the most famous decentralized cryptocurrency that is quickly gaining popularity across the globe. This new digital currency provides instantaneous transfers all over the world, without involving any regulatory body or middleman, in just a matter of minutes. This digital currency comes along a wide range of features, but with its recent impact on the financial market, fans have started to fear that the government may intervene and could ruin it for everyone. But there is no need for Bitcoin users to be concerned, any attempts to control Bitcoin won’t work. Beyond the complicacies presented by the decentralized concept of Bitcoin, regulatory bodies and governments have shown a general lack of understanding of this technological system. Bitcoin is one of the most complex currency systems and it won’t be easy to regulate.
Governments and authorities in many places are trying to ban or control digital currency transactions, but all of these attempts are turning out to be impossible. Bitcoin transactions are increasing every day and the younger generation seems intrigued by this decentralized system.
Bitcoins rise has been very recent and since its rise, authorities from different countries have been attempting to regulate this digital currency. As the value of Bitcoin has spiked to unprecedented heights, there is even more concern from authorities and governments around the world. It’s no wonder that more than half of Bitcoin owners claim they don’t want any type of regulation on this cryptocurrency in the future. The blockchain concept is completely different then any other system and it is built upon a system which requires no particular institution or government to operate it.
In 2013, the Chinese government banned banks and financial institutions from using Bitcoin, causing a sudden decrease in Bitcoin’s value which would set an example for its value in the years to come. A year later, several Chinese Bitcoin exchanges, had all of their bank accounts closed. This spurred concern that future government regulations could curtail Bitcoin’s growth. However, there were many loopholes in the crackdown, meaning many exchanges were able to remain in business. Interestingly, Bitcoin’s value rose around 25 percent in just a few days after this.
The United States has made attempts to regulate a few aspects of Bitcoin. New York State needs a special license for all Bitcoin related business having specific rules for employee identification and vetting. A few days ago, the IRS won a landmark ruling to gain access to information of around 14,000 accounts in order to collect back taxes from Bitcoin owners.
All these new regulations may be concerning for modern day Bitcoin investor, but none of it has actually stopped Bitcoin’s growth. This clearly reveals the loopholes and flaws of any future attempts to crack down or even regulate Bitcoin use.
There are some key components of Bitcoin and other cryptocurrencies which make it successful for storing of value and online transactions. These digital currencies are easy to transfer, involve no middle-man and most importantly, can’t be linked to any owner. These are all serious issues for any authority or government wanting to take control of how Bitcoin operates.
Bitcoins are not linked to any financial institution or government entity. There are many online exchanges and digital wallets which help you make transactions safely and easily. The blockchain technology of Bitcoin, is built upon a concept which requires no institution or authority to operate it- making it unique from all traditional currencies. Shutting down or “cracking down” on Bitcoin would be a global endeavor. Even if a country somehow prevents the use of Bitcoin within its borders, simple proxy systems and VPN would let users operate with little to no issues.
If governments are capable of stopping a peer to peer network, they would have to shut down all illegal practices of torrent sites. A more easy comparison would be the so-called dark web. Though servers, individual sites and the people associated with various activities are occasionally arrested for illegal activities, it would be absurd to think any government could regulate the whole network. Any government trying to ban or regulate Bitcoin for any matter is much the same.