With cryptocurrencies gaining momentum in today’s market, some investors worry whether it is even possible to get cryptocurrencies banned. Governments do not tolerate cryptocurrencies well in most countries because of their decentralized nature. Since a central authority does not control it, governments have no control over them.
When it comes to fiat currencies, governments can easily manipulate them and cause inflation or deflation depending on the market conditions. However, this is not true in the case of cryptocurrencies, which make many countries restless. However, if you are wondering whether cryptocurrencies can be banned at all, the simple answer is that they essentially cannot be banned.
Why cannot cryptocurrencies be banned?
If you think about it, cryptocurrencies are nothing but computer codes. Hence a government cannot ban a simple code which means that cryptocurrencies essentially cannot be banned. At the same time, transferring value with the help of cryptocurrency from one person to another is very similar to sending a music video to another person through a Pendrive. This means that a regulatory ban can not necessarily take away people’s ability to send cryptocurrency to each other.
Cryptocurrency holds value because people have agreed upon giving it the same status, which is necessarily something that the government cannot take away. However, the government may create some hindrances in how cryptocurrencies are transferred from one point to another. For example, the government may ban different platforms that make it easier for people to deal in cryptocurrency and inaccessible for mainstream users.
Banning Cryptocurrencies will Potentially have a Negative Impact
One of the main reasons cryptocurrencies has stayed in the dark for many years is that people do not know how to access them. Mining cryptocurrencies to get them out in the open was not something that anyone could do very quickly. For this reason, cryptocurrencies were reserved for individuals who had higher technological skills than others. However, with the launch of more convenient platforms and cryptocurrency exchanges, Bitcoin became more mainstream.
If cryptocurrency is suddenly banned, people will have no other option but to use the black market for trading in cryptocurrency. This means that people will have to actively seek others willing to pay Fiat currency in exchange for cryptocurrency. This was essentially how people used to get their hands on cryptocurrency before these mainstream methods were discovered. Therefore, if cryptocurrencies are banned in countries, it will widen the black-market trade, which can harm the economy.
More Damage than Good
The cryptocurrency market has opened up one of the biggest weapons of innovation today. The blockchain system, which is the building block of cryptocurrencies, has been utilized for making various innovative products in today’s world. Even more financial products have been created using this system, and it is also being utilized in healthcare, agriculture, transport, and more.
However, if cryptocurrencies are banned, public-based blockchain products will not be produced anymore, which can cause hindrance in the way of development. This is simply because if Bitcoin becomes illegal, so does blockchain because it makes up cryptocurrencies. This means that various industries will have to develop a solution strategy to replace blockchain or give it up entirely.
For most people in today’s world, blockchain technology has given rise to some of the most effective products that can help build a safer and better future. Since blockchain technology is highly secure and advanced, keeping once stored information almost immune to any damage becomes genuinely irreplaceable. Hence for the government to ban Bitcoin or blockchain would be a careless act that can lead to various collateral damages.
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Danica is working as a professional news editor at Crunchoid Inc. She is accustomed to finding daily reports.