Governments & Crypto — A Perspective
Bitcoin network started in 2009. It has been more than 10 years now. We have seen varied reactions from society towards Crypto.
All Governments either see Crypto as threat and want to ban it, or they have already banned it, or they are in the process of bringing some regulations.
Reading between the line, you will feel a very hostile approach all Govs (except for very few) have towards Crypto all over the world.
Why is that? Why do Govs perceive Crypto as a threat? This thread attempts to give some perspective on that.
What services Gov provide which they will never outsource, and keep to themselves only? Protection services. Protection is of two types — Protection of Wealth and Protection of Life. Gov is the only monopoly as far as a jurisdiction is concerned.
Now, what is wealth? Money is unit with which we measure Wealth. Wealth is a total of all values created. Wealth is stored in different assets — which are essentially store of values. Very primitive store of values being Real Estate. Other being — Equities, Gold etc.
All these store of values require protection services from Gov. They require Gov’s ability to undertake violence. All assets are under Gov’s control. Gov can seize them if they want.
Now, what if all your store of value or major chunk of it is being held in a decentralized cryptocurrency? This is maintained all over the world in a distributed public ledger. So, you are essentially taking away your wealth from Gov’s control.
Now, the protection services for wealth become redundant. One-half of the most important services provided by Govs are not needed. Crypto is the biggest competitor to all Govs.
Hence, Govs all over the world are afraid to embrace Crypto.