Many countries are worried about Bitcoin and have made repeated attempts to slow down its expansion. Despite these initiatives, it has mostly proven difficult to restrict Bitcoin and forbid its use by the general population. There are a number of reasons why central governments might want to regulate or even ban cryptocurrencies altogether. Regulating money laundering is one of the main reasons why federal organizations are so interested in Bitcoin. Is it a concern that Bitcoin cannot be stopped by governments?
Despite serious worries about Bitcoin’s potential for criminal usage, the cryptocurrency was developed to address basic issues that have plagued fiat currencies ever since the invention of paper money. The goal of blockchain technology in general is to ensure immutability, which will stop Bitcoin from interfering with other currencies worldwide. In essence, control is given to the holders of the digital currency, who use supply and demand to jointly decide how much one unit is worth. The most popular and largest cryptocurrency is BTC. As an alternative to Bitcoin, all other cryptocurrencies are frequently referred to as “ALT coins.”
The digital asset’s value has climbed somewhat since Satoshi Nakamoto first introduced it in 2019, and its return on investment is remarkable. Bitcoin has clearly persuaded many people that it can be used as a store of wealth, just like Gold and other investment products, even though many people still do not comprehend how it can be used as a form of payment.
Governments worry about losing control of the currency if Bitcoin gains popularity. Bitcoin is obviously useful, even though it can completely replace all fiat currencies. The future of Bitcoin is linked to the future of finance. It appears that the infrastructure surrounding the technology makes it very difficult for governments to put a stop to the Bitcoin revolution, if not impossible.
Why most governments like to stop Bitcoin
Three fundamental principles that governments rely on to function well appear to be badly breached by the invention of bitcoin. The majority of governments rely on their abilities to oversee and regulate capital as well as to monitor transactions to stop criminal activity. Transaction oversight is the responsibility of the central banks, along with investment banks, commercial banks, and other financial institutions.
Banks and other digital transactions were traditionally difficult for criminals to utilize to wire money to partners. Criminals can freely move money to anonymous addresses since Bitcoin cannot be regulated or monitored, and governments cannot track these activities. Even while the public ledger is accessible, meaning the transactions are open and transparent, it can be difficult to identify who really owns the addresses. Governments are very motivated to outright outlaw Bitcoin technology because of this aspect, which is very undesirable.
Furthermore, data entered using blockchain technology cannot be modified afterward since it is immutable. The function was created to promote confidence within the blockchain, according to Satoshi Nakamoto, the person who invented Bitcoin. Additionally, all users within the network have access to and can view transactions. These can be undesirable for covert governments and regimes that frequently engage in questionable activities that are kept a secret from the general public.
Questions regarding the transfer of money from point A to point B will need to be addressed by a government that only uses Bitcoin. Demands for transparency in transactions may lead to greater responsibility for improper government acts. However, the majority of improper government spending has frequently been kept a secret to shield dishonest leaders from scrutiny.
Finally, because the blockchain is unchangeable and prevents any kind of government involvement, the Bitcoin ecosystem cannot be regulated in its current state. Users can transfer and receive cryptocurrencies without hindrance from the government. The Bitcoin ecosystem makes it possible for people to transact freely across national and regional boundaries, which is bad for the government. Given these factors, it is unlikely that governments will accept Bitcoin as it currently exists; instead, most will continue to pursue methods to control it or outright outlaw it.
Can the government, though, actually stop Bitcoin? Let’s find out, then!
Can the government stop Bitcoin?
Without much success, a number of movements have attempted to control Bitcoin. For Bitcoin miners, there have been numerous crackdowns in the east. The regulations have made reference to the significant carbon footprint that the Bitcoin network’s proof-of-work consensus method has produced.
PoW unquestionably uses a lot of energy and has a bad effect on the environment. The PoW consensus, however, is perhaps the consensus rule guarding the Bitcoin network that is the most secure. Since Bitcoin transactions pose a threat to both the power of the government and the economy of any nation, the government is interested in regulating them.
In essence, the public gives the government control over fiat currencies. For instance, in the US, citizens entrust the federal reserve and the government to manage the country’s economy by, among other things, controlling the production of fiat money and setting interest rates. Bitcoin gets around all of these institutions and gives people access to a currency’s actual worth, doing away with the need for a centralized government to control how money is used or traded.
It can be argued that this has ramifications because without the ability to manage local money, governments might become wholly ineffective. The Bitcoin network, on the other hand, intends to foster free spending, abolish control, and promote openness.
Governments cannot thwart Bitcoin due of its infrastructure. Many nations have already banned Bitcoin, although it is unlikely that all of the projects will be completely eliminated. The movements can do nothing to halt the revolution because Bitcoin is developing on its own and people are eager to use the technology. In a nation’s efforts to keep control of the fiat currency, it is prudent to state that restrictions can be put in place to restrict the usage of Bitcoin within a particular jurisdiction.
Worried about the Bitcoin ban?
The number of Bitcoin transactions has grown over time, and the public has continued to embrace the idea of freedom. It offers a substitute for the comparatively erratic fiat money that keeps losing value over time. Fiat users have been severely harmed by bad money creation practices, and many have kept looking for alternatives.
Users of Bitcoin shouldn’t be concerned about a possible Bitcoin ban because firms tied to Bitcoin have persisted despite government resistance to accepting it. It might be argued that authorities have actively opposed Bitcoin from its launch in 2009. Despite these challenges, the network has expanded substantially, and even detractors recognize the significance of bitcoin.
The majority of countries have changed their positions and are now looking for new ways to secure Bitcoin rather than opposing it. The system is connected with Bitcoin. State currency monopolies, like digital money, can be effectively replaced by cryptocurrencies like Bitcoin.
In order to make using cryptocurrency payments simpler and more accessible, Bitcoin is now working with relevant businesses on a constant basis. Recently, Mastercard began working with banks to increase public accessibility to cryptocurrency payments. As the cryptocurrency with the highest market cap and the most widespread use, Bitcoin will surely take the lead.
How Bitcoin can withstand pressure from government regulation
Bitcoin can be accepted by the central bank just like other financial assets as long as it complies with rules. For instance, implementing Know Your Customer is essential in reducing the risks associated with utilizing Bitcoin for criminal or money-laundering purposes.
Since the government has access to the database, conventional financial transactions done through conventional financial institutions are simple to track. Compared to currency transactions, relative transparency is higher in cryptocurrencies like Bitcoin. Governments have a valid reason to be concerned about maintaining control since losing power could jeopardize national sovereignty. Bitcoin has the potential to serve as a substitute money that is equally accepted by all members of society and is not met with any opposition. Bitcoin is a safe, reputable, and legitimate digital currency that citizens can use as an alternative to the pressures that state currency monopolies place on them.
Bitcoin is a reliable cryptocurrency because of the core characteristics of blockchain technology, which guarantee transactions are transparent, verifiable, and immutable. Authoritarian governments or regimes who haven’t fully worked out how to incorporate it into their economies are likely to impose a ban on Bitcoin.
Despite the motivation for many nations’ bans on bitcoin, the cryptocurrency transcends national boundaries and enables users to engage freely. Despite the global regulatory rivalry that has impeded Bitcoin’s entry into traditional financial institutions like banks, it has managed to grow. Self-regulation by Bitcoin is extremely desirable and boosts user confidence, making it a reliable digital asset that is widely accepted.
Conclusion
The Bitcoin and cryptocurrency revolution has been going on for a while, and it’s still going strong. Governments who want to restrict or regulate the use of cryptocurrencies like Bitcoin have put up a lot of fight against cryptocurrency advocates along the way. Bitcoin is mostly employed in P2P and decentralized banking networks across several nations.
Due to Central Bank restrictions, many financial institutions are unable to promote the adoption of cryptocurrencies. Despite these drawbacks, Bitcoin adoption has progressed to the point that some nations are already starting to accept it as a form of payment.