Killing Bitcoin: 3 Ways Government Can Help or Hinder

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A fundamental question arises when you approach something like Bitcoin: how will governments react?

The reaction of any given government can be a maker or a breaker for crypto markets. Witness the recent and swift evacuation of certain “privacy” coins from not one, but two South Korean exchanges so far.

Others will surely follow, understanding that some governments don’t want the “privacy” aspect of cryptography to be an option for their citizens – therefore removing local liquidity should help put the breaks on it.

Or so they figure.

It’s worth noting, of course, that a South Korean could still conceivably hold all the Monero or other privacy coin that he wanted to hold. He would just have to use a different exchange to get it into BTC before ultimately getting it into his wallet.

The alleged fear is “money laundering.” This will be a term used to target cryptocurrency under any circumstances, and in any discussion.

The notion is that because cryptocurrency empowers people, it’s simultaneously empowering criminals.

However, it’s known that criminals far from prefer crypto – they like cash still.

Here are some ways that government could hurt cryptocurrency. Another scenario, in each case, is that they in fact make crypto more valuable as a result of their actions.

1. Kill Crypto Liquidity

The government may not be able to destroy Bitcoin outright, but it could target and shut down any exchange. If this happened on a global scale, poof, there goes all that alleged value of the blockchain tokens – whether or not the tokens exist.

If all the exchanges were shut down, it’d be a hard stance to take to say that your tokens were suddenly still valuable. They would innately lose value, thus “killing” them in a way.

2. Harass Crypto Pioneers

Developers, promoters, speakers, and other members of the cryptocurrency community could be targeted and disrupted by government, forcing them to abandon their activities that add to the health of Bitcoin.

Additionally, various governments could make it a criminal act to develop a cryptographic tool, such as a blockchain, without approval and oversight. Such a world is certainly within reach – the question is how willing our existing regulators and proto-fascists are to go down this road.

3. Outright Crypto Bans

Forward thinkers believe that an outright ban, as has often been proposed the world over, would greatly add to the value of cryptocurrency, specifically Bitcoin and other major tokens.

The bottom line is that you can’t ban something that people want, and money is something people will pursue under any circumstances. If they simply trust BTC more than they trust your currency, or they need it to access the global markets, then they will acquire it by whatever means they must.

So you can ban a cryptocurrency, but you can’t kill its usage.

As we see, there are a few ways that government could help or hinder cryptocurrency. Whether or not they have a desire to do so at this point is another story – one we’ll have to leave to future events to determine.

For today, we can understand that government is certainly not doing all it could to interfere with crypto.