May 29 2024

Why Governments Are Trying to Fight Bitcoin

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With the help of Blockchain technology, Bitcoin had created a buzz in the trading market since 2009, when the whitepaper was first produced. But after the emergence of Bitcoin, it also went through many controversies and acceptance issues. 

Though it has been leading the trading market for more than a decade, it is still not fully convinced by the government authorities. There are many reasons why the government is still not convinced with this process, and thus they are fighting with it. 

If we see the positive parts of Bitcoin, we can also see the negative aspects. For instance, it considers Blockchain technology; thus, it is a decentralized process. So, you will be able to transact Bitcoin with your partner from anywhere in the world without worrying about any third-party intervention. 

The same opportunity can be your threat as well. For instance, as it is not regulated and will not be traced by government authorities, they will not have any control over Bitcoin transactions. 

Why Are Governments Trying to Fight Bitcoin? 

Among the many reasons, there are three prominent reasons why government authorities are wary of Bitcoin. It is a unique process that works with Block security, and it does not consider any third-party interference. 

Besides, it is a threat to the existing centralized financial system. 

  • It cannot be regulated.
  • It can be used by criminals prominently.
  • It can avoid capital control of the citizen.

The Bitcoin ecosystem is important to mature to ensure the trust of the government. 

Decentralized Possession: Loss of Control

We already know that Bitcoin works on Blockchain, which is a decentralized process and also cannot be regulated by government authorities ever. 

No matter how hard the developers try, the unique feature of Blockchain is to be anonymous and decentralized. When you cannot keep the features with it, it will not be as secure as it is now, and also, there will be no difference in Bitcoin and other digital currencies. 

People like its unique processing, but they are not aware of the fact that the government will remain fully out of it. Basically, there is no control over all the transactions and trading through Bitcoin, and that is a threat to the financial ecosystem. 

Crime Concerns

The public may prefer the robust nature of Bitcoin trading and can follow the crypto boom for trading purposes. But the government knows that it’s better to go for safety and security than profit. 

Yes! A decentralized process is attractive, and you will get the opportunity to be secure in a particular sense, but you are not fully safe. In fact, with the modern advancements of hackers, you may be bankrupted through the Bitcoin trading process, and there will be nothing to do from the end of the government. 

In addition, there is no going back from a transaction that you have made so far. Once you have made the transaction, it will never get back to you until the opposite person allows it. 

A Threat to Central Banks

The emergence of Bitcoin is a reason for the loss of business for central and other financial sectors regulated by the government. Well, the government controls the whole financial system of any country by considering central banks and other financial institutions. 

So, if the business of the banks goes e down, it will eventually be a loss of government. 

Fiscal Treatment Is Complex

Apart from crime concerns and central bank business issues, it is also a threat to fiscal treatment. 

Bitcoin works on Blockchain, and thus it will gaze into the decentralized network. The network is hard to regularize, and it is also difficult to proceed with the monitoring policy and tax regulations.

Considering the treatment of tax is critical with Bitcoin. And you will not be able to comply with the monetary policy until you consider proper tax controls. 

It Is Still Immature

Many people do not trust the whole concept of Bitcoin because of its unregulated nature. Moreover, the concept is still young, and it will not be enough for the government to ensure the safety of the citizens. 

The value of Bitcoin is not stable, and it is too young to be a part of a viable financial system. But the developers are trying hard to consider Blockchain development to close the loopholes and make it fit enough for government regulations.


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