Trying to Crack-Down on Bitcoin does not work Well-Enough: Here’s Why
This article is about the anti-Bitcoin lobby that has been unsuccessfully intending to stop the cryptocurrency from spreading its wings in some of the major economies of the world. While trying to explain why this happens, we have created a nice plot for you to see which major countries have failed in clipping Bitcoin’s wings and the data that shows how badly they failed. The big fish to catch in this pond is, however, the four major reasons why the countries’ governments failed badly in manipulating Bitcoin to go through an undeserving path. May the best philosophy win!
Cracking down on Bitcoin to clip its wings in an aim to regulate the growth of the world’s most popular cryptocurrency does not seem to be effective enough. As far as data from countries, such as China, Russia, Venezuela, Brazil and a few other countries are concerned, the dire warnings and regulations to stop Bitcoin from becoming more powerful ended without any effect, according to a Fortune report.
For example, Bitcoin grew by 200% in Russia in 2017, the year in which the President of Russia, Vladimir Putin warned the Russians of the risks associated with the cryptocurrency. In China, where the government authorities tried to stop Bitcoin from being circulated by banning exchanges, Bitcoin managed to grow by an astonishing 2,000%. According to the same report, Nigeria saw Bitcoin and/or ‘peer to peer’ transactions grow by over 1,500% in the same year.
Meanwhile, in the starting months of 2018, Bitcoin’s value did come down palpably in the regulated markets mentioned above, but it still managed to keep its successful run unchallenged. The most notable fact for the current year is that after making Bitcoin a weird currency and warning citizens of its dire consequences, the very countries mentioned above started changing their voice notably.
Probably, China’s Xi Jinping, Russia’s Putin and many other leaders who once voiced against cryptocurrencies’ credibility slowly started to realise that clipping the wings of Bitcoin was not going to be successful. At least data obtained from these markets expressed this loudly enough. However, the question is why is this kind of crack-down on Bitcoin turning seemingly ineffective?
Here’s why.
1. Currency Control is becoming an Outdated Theory
If you closely look at the most influential inherent quality of bitcoin and other cryptocurrencies, you’d readily see that they all obey one single theory — there is no ‘third party’ currency control mechanism in them. For example, if you want to send money to someone from the other part of the world via Fiat money, you would face a lot of currency control mechanism from governments and financial authorities.
While the authorities often term currency control a statutory mechanism, people are now not interested in sharing all financial information with a ‘third party’ whoever that might be. The growing belief that currency or regulatory control is clumsy in the financial transactions in a digital and less geographically divided world is gaining momentum, and if governments and financial authorities think they can still force people to follow an outdated, geographically divided legal currency-control mechanism, it is more of a foolish application of force than anything else.
2. The World is getting more ‘Peer to Peer’
Another very common trend in the contemporary digital world is that anything that is peerless is now no more attractive in the increasingly ‘peer to peer’ world. The financial industry understands this well enough, and the example of PayPal, the digital world’s most powerful digital money-transfer firm, starting a PayPal.Me service to facilitate ‘peer to peer’ service proves the worth of the idea.
There are many reasons why ‘peer to peer’ transactions is growing exponentially. One of the most important reasons is that in an increasingly homogenous digital landscape, people tend to believe more in dealing with people one to one. Moreover, since the web provides everyone with an opportunity to become a ‘self-employed’ unit of a chosen industry, the transactions now have become more ‘peer to peer’.
The idea of a frictionless, ‘peer to peer’ financial transaction is best championed by Bitcoin and other cryptocurrencies, and hence they are perfectly compatible with the contemporary trends of the brave new world. No outdated restrictions have ever been successful in the world, right since the prehistoric age and it is a reason why our societies are progressing. Clipping on trends or trying to stop ourselves from progressing is something that is impossible and hence crack-downs on Bitcoin have gone futile.
3. The more ‘Demand Vs Supply’-Oriented Currencies are Now more Acceptable
Although all currencies follow the Demand versus Supply theory, Fiat currencies are more than often manipulated by the economies and governments in an aim to remain economically superior in the contemporary world. That is why Dollar values remain higher than, say Indian Rupees and such a scheme to keep the currency stay higher in terms of value makes it a tool that is isolated from a natural ‘Demand Vs Supply’ mechanism.
However, the rules of ‘Demand Vs Supply’ are never challenged in the crypto industry, making the value of Bitcoin remain an ‘interference-free’ item that is as transparent as air for everyone to see and feel. Although laymen do not engage in this kind of mechanism usually, the financial bigwigs and educated finance professionals know the value of the mechanism well enough.
People who follow the avant-garde, new-age professionals make the largest population of Bitcoin enthusiasts in the countries where regulations and warnings have been issued against cryptocurrencies, and that is why developing nations account for more Bitcoin trades than developed countries where people are already buoyed by the supremacy of their fiat currencies. That is why cracking down on Bitcoin in these growing economies had no effect in the field even when the most notable authorities of these countries came forward against the cryptocurrency king.
4. Inflation is a Big ‘No No’ in the Digital World
Although it is not directly quoted in any media channels, even the slightest form of inflation growth is a matter of the utmost disagreement in all places of the world. If you closely follow the growth of Bitcoin, which was imagined by the creator, Satoshi Nakamoto, to be a currency that can skip the unwanted effects of inflation, you’d see that economies that have gone through palpable forms of inflation are accepting it with open arms.
For example, Venezuela and Argentina that are going through hyperinflation are less speculatively and more factually vying for acceptance of Bitcoin as an official currency. As long as opposition to all forms of inflation remains a priority, no developing nation can stop cryptocurrencies from becoming increasingly more popular. That is why all the plans of these economies that wanted Bitcoin to be wiped off their economy failed miserably.
We believe that these four reasons are enough to show why cracking down on Bitcoin may sometimes be completely ineffective. The authorities that handle macroeconomics are intelligent enough to understand the value of this warning. The rest is all in the hands of the financially more ambitious majority.
Disclaimer
The views and opinions expressed here are solely those of the writer, Alina Vardanian, and may not reflect the opinions of CINDX. Every investment and trading move involves risk; you should conduct your own research when making a decision.
About CINDX
CINDX is an investment platform that allows individuals to combine several crypto exchange accounts into one trading terminal, and gives them the option to connect to the best managers without having to transfer their funds. Moreover, implementation of blockchain-based transactions will allow the trading history to be saved, and a rating system will be used to differentiate the successful managers from the less successful ones.
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