“Bitcoin cannot be stopped” tout Crypto enthusiasts. Just like there’s no way to stop two people from sending encrypted messages to each other, similarly cryptocurrency networks like Bitcoin work similar, people sending messages to each other, “peer to peer”, and if you kill one of the “node” (server), or even thousands of them, the other networks will continue as if nothing happened. That’s it. There you have it: “Bitcoin is unstoppable code.” Case closed. Right?
Incorrect.
Governments around the world, especially the US government, need an incentive for Cryptocurrency to continue & what’s the best incentive for the government than being able to “collect money” (AKA: Tax) on cryptocurrency.
It’s just that the US government is too busy taking care of COVID-19 mayhem right now. Let 80% of Americans get vaccinated, the government will speed up its probe against cryptocurrency. There you have it: Cryptocurrency has a future but only if it’s backed by the government.
You have to understand two important things to understand why the government has the power to destroy Cryptocurrencies like Bitcoin.
- It’s the money: The crypto networks are not just random messages that people are sending to each other. It’s has a real economic impact behind it. Bitcoin’s entire system is held together by the monetary incentives that everyone has. While the network cannot be attacked. Bitcoin’s “value” or the “incentive” can be attacked by the government using various tactics such as strict regulations on mining, taxation, and even regulations that directly relate to cryptocurrency with funding terrorism & illegal activities.
- it’s not just code: It’s physical. Proof-of-work mining is a real-world process and, thanks to free-market forces and economies of scale, it results in large, easy-to-find operations with significant energy footprints and no defense. You can attack these.
In simple words, just collapse the incentive of bitcoin and you can kill bitcoin, there is no need to go around seizing nodes, that’s just distractions and a waste of time. The code doesn’t need to be stopped.
Government could impose anti-money-laundering (AML) on businesses and exchanges that deal with cryptocurrency, and add massive capitol gain that would make it “economically unsound” to encourage cryptocurrency.
The main purpose of blockchain is to remain completely open & neutral, and that means no interference from government or any authority, but government can obstruct the effects of cryptocurrency using AML & tax regulations which they do control.
The other part that doesn’t make sense is, the actual usability of
Cryptocurrency. After 11 years, & billions of dollars poured, there is no practical use for cryptocurrency except the outrageous speculations. Isn’t this supposed to be the best thing for humans since sliced bread?
Government doesn’t need to break the bitcoin code. It can just break it’s guarantees and render it as useless thing that’s only used to fund and encourage illegal activities. Government does have the power to destroy bitcoin whenever it wishes to.
This article is based on Joe Kelly’s Post “How To Kill Bitcoin”
