A big fear in the crypto space is the threat of heavy-handed regulations or even outright prohibition. The media had fanned the flames because it makes good copy.
The resultant FUD (fear, uncertainty, and doubt) has surely affected the crypto market by scaring money and resources away, and by creating another expense of money and time for the projects themselves.
So let’s look at what a government could do:
- It could outlaw its citizens from owning or transacting in cryptos. That would certainly affect the majority of crypto investors in that country. However, as has been the case with the Internet, there are ways for investors to find a way around the restrictions.
- An even bigger issue is what happens to that country. Most people understand blockchain technology to be an enabling, and eventually even a necessary, development that will empower its citizens. Just as banning internet access disenfranchises people, so too would banning this revolutionary technology.
- A government could instead ban crypto exchanges. This would be an easier issue to maneuver around, but again it puts both the country and its citizens at a disadvantage to others globally.
- A lesser level of intervention would be too many and costly regulations for compliance. This is the main threat in the U.S. today. It is a fear mainly brought about by potential loss of control of the dollar’s role as the world’s reserve currency and the resultant ability to punish its enemies.
Now what can’t governments do?
To accomplish that, they would have to do one of two things: either shut down the Internet or take over more than 50% of the computers and servers involved with the Bitcoin network globally, or come to an agreement between every country to ban its use or ownership.
The latter is the only true option, but the chances of that happening is close to nil. Getting all the world’s governments to agree on ANY issue had never happened and probably never will.
The most likely scenario is one where, through fits and starts, it will all get sorted out. All disruptive technologies eventually win out, but those in power will fight it until the fight becomes futile.
As the saying goes, “First they ignore you, then they laugh at you, then they fight you, then you win.”
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