Can Governments Stop Bitcoin?

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Since the publication of Satoshi’s white paper in 2009, the question has been whether countries can impose a fully enforceable ban on Bitcoin and stop Bitcoin. For some it is only a matter of time and for others this possibility is out of the question and impossible.

Threat to the current system

Bitcoin is often seen as an alternative to our current money system. It gives people the ability to send and store value without banks, governments or other Trusted Third Parties. As Bitcoin reduces the role of intermediaries, increases individual sovereignty, and competes with the traditional monetary system as an alternative money system, some wonder if governments will act against it.

The question of whether governments can stop Bitcoin has already been answered to some extent. There are already countries where Bitcoin has been declared illegal, including Algeria, Ecuador, Egypt, Nepal and Pakistan. Owning or using bitcoin and other cryptocurrencies is not allowed here. Most of these countries score relatively low on the democracy index.

Saudi Arabia and Taiwan go one step further, in these countries financial institutions are prohibited from doing anything in the crypto sector. China takes the cake when it comes to bitcoin legislation.

China

Since the existence of Bitcoin, China has announced several times to ban the digital currency. Yet until recently, almost two-thirds of the computing power in the Bitcoin network came from this country, until a complete ban on Bitcoin mining came this year. It caused a decrease in the total hash rate and a major relocation of all mining equipment. The ?????hashrate????? indicates the computing power of the network. The more computers provide computing power, the more secure the network. Meanwhile, many miners have found a new place and the hash rate is recovering.

The total hashrate of the Bitcoin network is recovering

Many Chinese bitcoin companies have had to move or close their doors due to the regulations. Despite all the efforts, people in China can still buy and sell bitcoin via VPN connections at various trading platforms. The ban has therefore partly helped: The miners are out of the country, Bitcoin itself is not yet.

The United States

At the time of writing, you can legally buy, sell, and own Bitcoin in America. The largest financial regulator, the Securities and Exchange Commission (SEC), does not see bitcoin as a traditional investment product such as shares or bonds, but as a commodity or commodity such as gold.

Jerome Powell, the head of the US central bank, announced last week that the US has no plans to ban Bitcoin.

Jerome Powell, Chairman of the Federal Reserve System

The crypto industry has become a billion-dollar business from which American companies benefit. More and more banks and investment funds want to offer Bitcoin to their customers. More and more politicians are also open to Bitcoin. States such as Wyoming, Colorado, Ohio, and South Dakota lead the way in providing legal frameworks and a favorable business climate.

In the state of Missouri there is even a small village where each of the 1500 residents will receive $ 1000 in Bitcoin. According to the mayor, Jayson Stewart, learning about Bitcoin is important for the town’s economic future.

The United States could theoretically ban Bitcoin just like China. This will make it more difficult for individuals and companies to buy and sell Bitcoin. However, according to Marshall Hayner, MetalPay’s CEO, such regulations come with huge costs.

?ǣBitcoin has penetrated too deep into our financial system to ban now ,?ǥ explains Hayner. The ban would mean that large institutions and investment funds would have to stop offering bitcoin services. In recent years, the crypto sector has grown into a billion-dollar industry that employs tens of thousands of Americans and makes a lot of money.

Can Bitcoin be stopped?

Due to the decentralized nature of Bitcoin, it is possible for anyone on earth with an internet connection to participate in this network. A ban on Bitcoin is difficult, if not impossible, for countries to enforce. Governments will have to introduce strict internet control, but even then it will be possible for individuals through VPN connections to download a Bitcoin wallet, run a full node and participate in the Bitcoin network.

Strict regulations in America, for example, are unlikely to stop innovations in the Bitcoin sector worldwide. US bitcoin companies would move to countries with a more favorable business climate. Moreover, the use of Bitcoin in a country can be difficult to stop. The growth of a black Bitcoin market will then be the result, according to Hayner.

?ǣThe US can make it harder for people to buy and sell Bitcoin, but a complete ban is impossible to enforce, ?ǥ Hayner says.

According to Saifedean Ammous, author of The Bitcoin Standard, a ban on Bitcoin would have the opposite effect. ?ǣWhen a bank tells you that it is not possible to buy Bitcoin with your bank account, that is actually an advertisement for Bitcoin, ?ǥ Ammous writes. According to Ammous, the only thing governments could do to decrease the use of Bitcoin is to come up with a better alternative.

It is now estimated that between 100 and 200 million people own bitcoin. For politicians, the vision about bitcoin can win or cost more and more votes. Moreover, many civil servants and board members now own bitcoin themselves.

The growing acceptance of Bitcoin among countries such as El Salvador, Ukraine, Cuba and more is making it increasingly difficult for other countries to ban Bitcoin.

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