By Mashum Mollah
When Bitcoin (Cryptocurrencies) first burst onto the scene in 2009, the entire world took notice. This was because it was not just a new financial order that was governed by high tech. Rather, it sought to offer a far deeper meaning in a philosophical manner.
Future of CryptoCurrencies
The fear of Bitcoin is not only because of it being an alternative currency. The fear is real because Bitcoin seeks to democratize economic, political and financial systems all over the world. The aim is to make the financial system border-free.
This means that taxes, duties, commissions and interest rates will seek to be non-existent in the cryptocurrency world. This is serious as it challenges the established order of governance and authority.
However, some of the nations do not consider these currencies safe of the field to invest in. Countries that practice high protectionism like India and China banned any sale, trade or exchange in cryptocurrencies.
In this article, we will look at whether the threat is real or fabricated. We will also look at the social and governmental impacts of cryptocurrencies in the 21st century.
Cryptocurrencies: the Dawn of a New Financial Era
Why are governments and world leaders scared of Bitcoin?
This question is something that has not been highlighted enough. The social, political and international implications of cryptocurrency far exceed its financial ones. Bitcoin and other cryptocurrencies intend to break down international borders and propagate a borderless and progressive world.
It is a far greater champion of ‘Free Market Economy’ than even Adam Smith himself is. By wresting economic control away from governments, cryptocurrencies intend to award the maximum benefit to the parties concerned.
We are not talking about complex tax structures, duties, currency conversion fee and so on. All these things slow down economic growth and exploit the ones truly making the trade. Nations and international financial corporations like Visa and MasterCard earn a huge chunk of their revenues from such practices.
By removing third parties, which facilitate transactions and earn a percentage, cryptocurrency intends to provide end-to-end financial value to the parties involved. Blockchain technology means that the process if so secure that hacking it by authorities is impossible.
What Criticisms do Governments make about Bitcoin and other Crypto?
If you have been following the endless tirade of world leaders against cryptocurrencies, a pattern starts emerging. Most of the criticism is directed towards the use of Bitcoins to fund illegal activities.
Politicians and world leaders have called out Bitcoin for its use in the illegal arms trade, flesh trade, and other anti-social activities. Numerous sting investigations conducted by authorities point to how terrorist groups and rogue nations are using Bitcoins to suit their interests.
While there are no substantial proofs that have been presented to the world, the news was enough to stir up a big enough controversy. The volatile nature of Bitcoins are also one criticism voiced by many.
It should be pointed out that national governments too have started taking a great deal of interest in cryptocurrencies. Chinese President, Xi Jinping recently lauded the tech behind Bitcoin. Many are now speculating whether China is on its way to create its own cryptocurrency.
The safe, secure and private nature of Blockchain technology is also finding many takers among traditional businesses.
Conclusion
With the cumulative worth of the cryptocurrency world crossing the $100 Trillion mark, no government can afford to ignore it. In the coming months, there are new challenges that face Bitcoin and other currencies.
What would be interesting to see is the position taken by the industry titans. With Mark Zuckerberg jumping on the crypto bandwagon with Libra and others queuing up with anticipation, who knows where we are heading.
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