Implementation Of Bitcoin Scares The Government
According to the Bitcoin community, they are responsible for the first generation of a decentralized peer-to-peer transactional network that is controlled by the users, without the presence of a controlling authority or intermediary. The fear of governmental bodies lies in this lack of a controlling authority in the advent of cryptocurrencies. However, to properly understand this fear, the history of controversy surrounding new currencies and the government must be explained.
The government of every state is the central power controlling the fiat currency used in the nation. Final currencies are the regular government-issued currencies like the Dollars, pounds, yen, etc. These currencies are only perceived as valuable because the government dictates them to be used in buying and selling within the nation. The government has a controlling interest over fiat currencies by the direction of the federal financial institutions that issue them using specific monetary legislations to influence the economy. The government also sets out the terms of transferring fiat currencies. By this, they are able to determine and control the parties that profit from these transfers and also track the currencies for cases like criminal activity or taxing. This controlling interest is completely stripped from the government when my currency is created by a non-governmental body. The controlling interest the government currently has on fiat currency cuts across a broad category of impacts. Some of them. include:
Financial policy. It is no secret that the governments of the world want to retain their power over the total amount of money in their jurisdictions. While several individuals are fixated on the crime aspect, the government having control implies they can dictate the amount of money in circulation. The aim of this could range from investment stimulation and job creation to dictatorship. As such, there is no easy grey area in this extremely complicated concept of money in the nation.
Cryptocurrency marketplace. Cryptocurrency users are gradually growing to see the fiat banking system as obsolete. Because the currencies can be transferred from one party to another without any form of middlemen as is done on Bitcoin code app; after the currency has been mined it makes them have no use for the regular banking system. As promising as this may seem, it could turn out to be a disaster. The banking industry does a lot more than just transfer money, it is where loans are given for businesses, mortgages for homes, and jobs that pay because of the fees gotten from transactions. Without the regular banking system, although the cryptocurrency space might survive for a while it would be collectively detrimental to society.
The topic of cryptocurrency being used to finance and facilitate illegal activities has been recurrent. However, it cannot be ignored that has and is also being used to carry out these crimes even before the advent of cryptocurrency. That is a theoretical argument that has constantly been debated over time. Points like the central bank being able to control the flow of money; inducing recession to curb these criminal activities have been started.
Bitcoin and other cryptocurrencies come packing a large variety of conveniences and advantages, however, the downsides cannot completely be overlooked. The major threat to the cryptocurrency world is how open they are to hacks. Over time, there have been a variety of attacks against bitcoin exchange platforms which have resulted in losses grossing in hundreds of millions of dollars. The advancement of technology since that time has grown exponentially and such attacks are unlikely in current times, however, it does not eliminate the threat faced by the cryptocurrency space as is feared by the government.