Can Governments really Ban Bitcoin?

in GEMS13 days ago

Can bitcoin and the like be eliminated by governments?

There has been a lot of talk recently that the biggest risk factor for bitcoin and crypto today is governments banning it.

I agree with them.

They can't actually eliminate bitcoin and crypto unless they could also eliminate all the nodes running the networks, which they can't.

So, the debate isn't whether or not they could literally eliminate it, but more in the vein of whether or not they could collapse interest in it to the point that it had little to no value.

And I think that is a possibility, though not a likely one.

(Source: https://asiatimes.com/2020/06/governments-will-kill-crypto-warns-jim-rogers/)

What is sparking this debate?

Earlier today, a well known investor (Jim Rogers) laid down his reasons for not investing in bitcoin or participating in cryptocurrencies.

His main thesis was this:

“If the cryptocurrency succeeds as real money, rather than the subject of gambling as it is today, the government will make the cryptocurrency illegal and eliminate it.”

(Source: https://asiatimes.com/2020/06/governments-will-kill-crypto-warns-jim-rogers/)

There is one very important take away from this statement... did you catch it?

If the cryptocurrency is "real money" then it will be illegal (or regulated out of existence).

Hmm... real money you say?!

So, if the crypto is more like digital gold then it likely has nothing to worry about?

I would argue yes.

Why do you think bitcoin hasn't face more backlash from regulators thus far?

It's not because they have been asleep at the wheel.

Trust me, the US government has been well aware of bitcoin going as far back as 2012 at the very least...

So, why didn't they ban it back then?

My guess is because they learned very quickly that a ban was difficult to enforce and probably more importantly, they concluded that bitcoin wasn't a threat the dollar.

It was more of an investment vehicle than a currency, a competitor to gold more than a competitor to the dollar.

If that changes at some point though, my guess is that their stance on bitcoin and crypto will change as well. If that day comes the best hope is that it is already so well integrated globally that the difficult to enforce bans are mostly ignored.

The US was investigating bitcoin as early as 2012 (at the latest)...

I remember reading a statement by a since retired former government employee. I can't remember her exact name or position at this time but she said that she was tasked with investigated bitcoin back in 2012 to help the government better understand how it works.

Her conclusion was something along the lines of, "it can't be banned".

I think she meant what I alluded to above in that it can be banned, but it can't be eliminated.

Though that statement isn't entirely accurate either.

It could be mostly eliminated if every country in the world all agreed to the same laws at the exact same time, which is highly unlikely.

As it stands now, even a ban won't work all that well because the cryptocurrency will just move to a jurisdiction where it is not banned.

Which is more or less what we have been seeing over the years; the money just flows to the countries that are accommodating to crypto.

And with so many countries chomping at the bit to catch up to the some of the economic super powers, I have to believe they will gladly open their doors to what the US and other developed countries kick to the curb.

Which means, it's not going away.

TLDR:

The US can very easily ban bitcoin, but it's unlikely that they will since it is not a threat to the dollar. If it does someday become a threat to the dollar their stance may change, but by the point it may be too well integrated for a ban to be effective.

These are my thoughts anyways, but what are your thoughts on the matter?

Let me know in the comments section below.

Stay informed my friends.

-Doc