In a podcast a little over a year ago, economist Saifedean Ammous spoke of how governments can effectively kill Bitcoin.
Build A Better Bitcoin
The formula is not as complicated as one might think. All a government must do, Ammous says, is build a better Bitcoin. Clearly, Bitcoin can’t compare to the network effect of fiat money. So long as we assume that most people won’t gravitate toward BTC simply because of its deflationary supply schedule, and the government need simply build a digital cash that can be owned without censorship.
Which, of course, therein lies the problem for GovernmentCoin: censorship as a requirement is almost a no-brainer. Whatever they do, governments will not want to build a system that replicates the current lawlessness of the cash economy.
But privacy and the ability to be your own bank are paramount in Bitcoin’s value offering. So the assumption is that governments will not have an easy time killing the cryptocurrency, if that’s even their goal at this point.
Today, large swaths of Bitcoin are controlled by small groups of traders. The cryptocurrency is certainly not of the people, and may never again be. Where the price goes is important to the masses insofar as it commands the price of the rest of the crypto market.
There are those, of course, who believe that Bitcoin will eventually be the only cryptocurrency. These people go great lengths to convince themselves and others that other cryptos, with their billions in investment and tens of thousands of users, will simply fade away. I would say that’s unlikely.
At least as unlikely as Bitcoin simply fading away.
Bitcoin’s Internal Death
But the other side of the killing Bitcoin equation is more complex.
It’s more a matter of inertia than acts against the cryptocurrency. There’s nothing much you can do to will it dead; it will either survive or it won’t. But one thing that threatens the long-term survival of cryptocurrency is an overall lack of a real-world market for the stuff. There’s not much you can do with a fully loaded crypto wallet, besides watch its value go up and down.
There are plenty of exceptions around the world, but by and large, the crypto economy is still developing. Bitcoin threatens to die of asphyxiation, never reaching its full potential. The way to kill it, then, is to stand by and let this happen, and perhaps enact some regulatory measures to keep this being the case.
But the Bitcoin market may thrive nevertheless. However, if all Bitcoin ever is happens to be an exotic trading instrument, its success can be measured as such. What I think of when I think of a Bitcoin future, though, is something much more in-your-face. I look forward to the day that I go into the gas station after paying with crypto and see a crypto ATM.
One side of the technology that might help matters is that whole blockchain thing. Blockchain technology has the potential to invade every aspect of human life, and if it does, it will bring crypto with it. So the same gas station might be using a blockchain app to track gas sales, and even a blockchain register to check me out when I buy a soda.
But will it be the Bitcoin blockchain? Not necessarily. It may also not be regular cryptocurrencies. Instead, we may see stablecoins as the first foray by many companies. PornHub started paying their models in Tether issued on Tron. In that case, they could have chosen the Bitcoin network using the Omni layer, but they didn’t. After all, it’s no secret that Tron is fast.
There are yet other ways to kill Bitcoin that we haven’t thought about. For now, though, it’s safe to assume BTC isn’t going anywhere.
