Cryptocurrency Saga – Is Bitcoin a Scam, or Is It the New Frontier?
Is Bitcoin a scam? Is it a one-hit-wonder? According to Jamie Dimon of JPMorgan Chase and Co, Bitcoin is a scam. Jamie Dimon thinks that Bitcoin will not survive moving into the future for several reasons. However, from what we’ve seen so far, Bitcoin has proven to the world that it’s the new frontier to transparent financial transactions on so many different levels. It has created a great window of opportunity where people can carry out their financial dealings without the fear of anyone or anything monitoring their every move.
Can Governments Restrict the Use of Cryptocurrencies?
Bitcoin is well on its way to overthrow centralized banking, according to numerous cryptocurrency influencers, and that is something most governments do not want to deal with. That could force them into taking drastic measures in a bid to make local currencies maintain relevance.
For now, the governmental laws imposed on the use of cryptocurrencies are fictional. Even in the nearest future, the possibility of it happening is almost zero because there are too many independent governments, and taking a unilateral decision is virtually impossible. Furthermore, so many countries stand a better chance of growing and developing further by riding on the cryptocurrency wave. Even third world countries can develop at an unimaginable scale since there will be a significant reduction in the inflation rate.
However, the systemic increase in the value of Bitcoin might force them to take specific actions. No government will tolerate any non-controlled currency. Unless they are willing to ignore its expansion, which is likely impossible, most governments will try to limit/erase the use. At a certain stage, governments will probably try to either tax cryptocurrency owners or completely ban them. Hypothetically speaking, if any government should impose a ban on the use of cryptocurrencies, the resulting impact will be massive, to say the least. Every cryptocurrency owner will immediately look to convert their entire stock to something legal.
Furthermore, companies that deal solely on cryptocurrencies will eventually crash, except they can switch to the legal tender. Nonetheless, governments can undoubtedly profit from Bitcoin technology. The technology ensures transparency and accountability in all transactions, which is something non-corrupt governments should seek.
Presently, only a few places allow cryptocurrency transactions. Most big companies remain ignorant of the benefits of transacting in Bitcoin. Cryptocurrencies are not self-reliant either; they are not able to exist as an independent entity. Let us say you are buying a $10 coffee table and paying in BTC. The amount of BTC you pay is simply the USD equivalent. We have not reached the stage where products and services are assigned cryptocurrency price tags.
Realistically, governments would not want to ban cryptocurrencies completely due to the backlash that they will receive. They will try to control it by imposing taxes on owners. That way, it can flourish as much as possible, but the government still has a hand in it.
The New Frontier
As of today, SegWit controls 5% of all Bitcoin transactions. Although this does not look like much, it is an outstanding amount considering how conservative Bitcoin core developers are. Subsequent core client updates will allow more people to switch to SegWit, meaning we might see an additional 5% increase. Furthermore, it is important to incorporate 2-factor authentication in all your exchange accounts. This is to prevent unauthorized access and someone taking away all your money.
Ultimately, we should be looking at whether Bitcoin and several other cryptocurrencies will survive the onslaught of governmental laws and policies. Bitcoin has to endure to pave the way for others: A task befitting the first frontier of decentralized finance.