Governments Are Scared Of Cryptocurrency

Say what you want about Elon Musk, at times he has astute observations. For all his non-thinking when it comes to Tweeting, he is not a stupid guy.

This is why his recent remarks about the cryptocurrency industry, especially in relation to governments, is very telling.

His words are in alignment with a lot of what many of us in the industry already were proclaiming. The fact that we are seeing such forceful action by many governments around the world tells us the entire story.

Governments are scared of cryptocurrency.

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Cryptocurrency Cannot Be Shut Down

This is one of Musk's primary observations. He was focusing upon Bitcoin but it equally holds true for all of cryptocurrency. There is simply no way to shut it down.

It was something that was designed into the framework of Bitcoin. Satoshi was intent on creating something that operated outside the established system. To be effective, it required being out of the reach of the power forces he was trying to circumvent.

What this meant was going around both the financial system and governments.

Over the last decade, it is something that spread. While there are many points of vulnerability, the expansion of the industry is taking it wider than governments can deal with. Breadth is something they do not combat well. As we can see, the reach of cryptocurrency is only getting larger.

The challenge for governments is there is no united front. We see China on a banning brigade only to have El Salvador make Bitcoin legal tender. The ones that are looking at implementing onerous cryptocurrency regulations will find that companies will move offshore.

Even within their own geographic boundaries, the decentralized nature of cryptocurrency is going to make enforcement very difficult. We see the United States government, different agencies, disagreeing on what Bitcoin is classified. Hence, we will see internal battles as each agency struggles for power.

Cryptocurrency Is A Threat To Power

This is the core of what is happening. Cryptocurrency is a threat to the centralized power structure that governments depend upon. It is why the Chinese are going after it with the most vigor. The CCP is well aware that cryptocurrency could topple its hierarchical structure in short order.

Of course, whether politicians and bureaucrats on Capital Hill realize this or simply are taking their marching orders from the bankers, they are taking an adversarial stance on it.

According to Musk, this is not going to stop anything. What it could do is delay things a bit.

“It is not possible to destroy crypto, but it is possible for governments to slow down its advancement.”

He goes on to say that the actions of governments reveal the value in cryptocurrency.

“You know, when governments can’t keep the hand out of the cookie jar and edit the money database, there’s probably some value to that.”

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Musk does admit that cryptocurrency is not his area of expertise. However, he is known for his thinking outside the established bounds and tends to not be a fan of government regulations. His battles with the SEC are well known.

Cryptocurrency Is Disruptive Technology

While he might not be an expert on cryptocurrency specifically, he is well schooled in disruptive technologies. There are few who are intimately aware of how a technology of this sort can completely upend major institutions over time. Tesla is positioning itself, according to many, to take out the legacy automobile makers. If this is the case, it will follow the trend established over the last few decades of major players in different industries being obliterated.

Cryptocurrency has such reach that I firmly believe it will, eventually, take out governments. The decentralized nature will overwhelm the centralized structure which governments depend upon. In switching to a realm that is dependent upon voluntary network effects, the entire script is instantly flipped.

Governments are not designed to be efficient or fast moving. This is where the threat enters. Not only does technology excel at this but cryptocurrency's adoption is coming due to the fact to streamlines the entire monetary and financial system. Anything that creates friction will be replaced.

For the most part, government is unchanged for decades. There are certain aspect to different forms yet, at the core, they are all the same. Those involved only seek to grow their power regardless of the system. How often have we seen a government actually get smaller?

Here is there the problem arises. In this era, where technology is accelerating in power and speed, anything that is unchanged at its core is going to be disrupted, most within a decade or two. The time for remaining the same is passed.

We saw how ineffective resistance was over the last few decades. Major industries were completely upended with some of the largest companies in the world being affected. The key here is that technology keeps getting more powerful, thus enlarging its ability to destroy. While the 1990s and early 2000s saw the newspapers hit, the 2040s could see many governments taken out.

In the meantime, we are in the process of watching the banking industry getting completely turned on its head.

Progress Cannot Be Stopped

As noted in a video yesterday titled Why The Government Hatred Of Cryptocurrency Is A Major Benefit, this is a game of action and reaction.

To start, we are dealing with something that is global in nature. This means that the forces working against any particular government are not located solely in that country. Any advancement in cryptocurrency can take place anywhere on the planet. Code that is application is valid regardless of where it comes from.

Much of what governments are doing will dictate how the developers operate. Their coding will depend upon what attack vectors at targeted. Hence, we see a game of cat and mouse taking place. Unfortunately for the centralized entities, this push will likely only result in more decentralized, open-source software hitting the market. It is are the core of this battle.

This is nothing new. It affected companies all over the world during the last few decades. Since cryptocurrency deals with the monetary situation, it is striking a blow to the most powerful entities in the world: governments.

Musk is right, it cannot be shut down. The proverbial horse already left the barn. If they went after Bitcoin in the early 2010s, maybe the situation could have been averted. They did not do that.

The challenge is not the 8,000 or whatever cryptocurrencies that are already in existence. What is fatal is the fact that millions more could be spun up at any time. Each time a new project rolls out, there is the threat of it being tokenized.

At the same time, when we expand this idea to digital assets, forget about it. We are going to see billions of these items hitting the market, representing just about anything we can think of.

NFTs can represent something major like an ownership stake in a professional sports team or a skin in a minor game that few are even aware exist. Yet both have equal ability to be moved on decentralized marketplaces.

Governments have a reason to fear what is going on in cryptocurrency. Their entire power basis is at threat of being eradicated. For the population of the planet, this is most likely a very good thing.


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It doesn't stop them trying to stop that, I will be interesting to see what happens in China now that all is banned

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See Soviet Union 1991 for the answer. It’s all been tried before and it won’t be different this time around.

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I'm from Finland so I do know about Soviet Union, but what part of the breakdown you are referring to? You really can't compare china to USSR directly as, the financial situation & political atmosphere are not comparable

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Human rights violations, Communist rule, Banning everything including freedom, issues with yuan, etc. I could go on but again they may not be entirely the same but in the end the result will be.

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I don't know if you are interested to read this, but I will anyway leave this here.

https://www.noemamag.com/how-china-avoided-soviet-style-collapse

The thing is that the party has support from the vast majority and most of the people think that a) west is evil b) other countries are trying to attack their culture c) they don't know about the problems as you do not read or hear about it. People get wealthier all the time and life is much better than 20 years ago.

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Interesting… I truly cheer for the Chinese people. However, I think the entire world including the west are going to have to contend with the concept of State and money. An unchecked State apparatus with unlimited spending power can be a dangerous thing as it pertains to freedom and liberty. Sadly, the legacy system will go through some much needed changes that may cause some disruptions. And although the Chinese may be better off today much of the legacy system is interconnected. Suffice it say the financial problems that existed in 2009 still remain. :)

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The difference is that this is global. So what is happening in China is only moving elsewhere.

The only thing China is doing is shitting itself in the foot.

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In regards to the China news... We see that news every year. I have not searched deeply into that subject but I think it is largely exaggerated since I am tired of hearing the same thing again and again, every year we see news about China prohibiting crypto...

But yes, Crypto is great to put government money in check. It is a competitor. Remember what is written in the first block of Bitcoin, a critic about the government bailing out a company twice for their unhealthy business model.

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Most government aren't seeing how evolutionary Crypto can become, in terms of governance and finance, they're only see it as a technology that might disrupt their activities and shift the balance. It's quite a shame

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It's so disturbing (and at the same time so ridiculous, in the sense of seeing so many attempts to control what they can't) to see how scared the government is of the cyber future.

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the government is so afraid of not being able to control the population's finances, and the negative impact for them may not be able to provide appropriate taxes, and that is a fact😂 @taskmaster4450

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I also wish to see more push towards decentralized software. It's one of the easiest ways to prevent the government from reaching out to regulate the space since anyone can just fire up a replacement node.

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Just when I am ready to write off Musk completely, he comes out with some gems like that. It will be really interesting to see if the powers that be take note of it. That would honestly make too much sense, so probably not...

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Watching banks squirm over crypto is the sight I enjoy the most!

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They are not scared they are terrified as this is their worst nightmare coming true. Crypto has to act smarter in what they develop as leaving doors open for the SEC to walk through is not being clever. Delay tactics is all this is and everyone knows this.

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They are rightfully scared. Time of decentralization has already come. Things are slipping out of their hands.

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agree they should be afraid but you know what you can't do anything about it
crypto is there to stay

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Governments are still having a "location based mentality" when dealing with crypto, as if this tech would be something that comes with a switch button they can push on.

Just look at Hive and its plethora of second layer tokens. Imagine how many similar projects could emerge in the next few years. How are they gonna control all of that.

The only thing they can control for the moment, to some extent of course, is CEXs and the link between bank accounts and CEXs as a gateway for accessing cryptos.

Once we will take crypto to the next level, as El Salvador did, it will be almost impossible to control this tech in any way. Seeing the level of frustration caused by the plandemic, I feel like many more will turn towards crypto in the near future.

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the gov can't control or stop crypto but what they can do is stop its conversion in fiat or close retailers that accept crypto so we need solution to that if we want to be truly free to use our money our own way

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They really are ill-equipped to deal with the new reality. It is really that simple. They cannot handle the digital world since they were not designed for it.

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The government can't stop Crypto currency easily because,it have know by many people.It is a digital currency that many people know the value.
Government can only create panic but they can't stop it.
Panic is for those that don't know about it because people that know how it works, you can't panic them.

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I agree with you and all who know what crypto is the gov are scared cause they would not have control over your money anymore if crypto is used by all its a big threat to them in controlling your lives

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In my opinion the are scared because they think crypto is going to bring down the economy, also the decentralized nature of cryptocurrency scares, because they know they can't control it, monetize it for their own gain and because it's bring many people financial freedom.

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It's something they really cannot control. Banks and Governments must be shitting their pants and that's why they are going head to head.

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Cryptocurrency Is Disruptive Technology

Which means that cryptocurrency's ability to allow people (and countries) true ownership and freedom is what people (and countries) who like to be in control do not like at all.

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We could say that in the last decades the banks have been the main precursors of all the public debt generated, there has been no control at all, the problem is that the governments have helped them to achieve it, due to their degree of conviction? no, because it also influences them positively, we make the poor poorer by generating more debt that they will not even be able to give back. In my opinion, the banking entities have their end much closer than what people think, they have already done their job or rather I would say their "role" in this imperialism system. Now it will be up to governments to continue with the same issue, which will adopt more effective technologies regarding the control of the monetary mass but directly from each of our wallets, how is it? by fiat coins, yeah of course, different story but same sh..t.

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I still think that the only way to completely eliminate cryptocurrencies, is to shut down the internet worldwide for several years, then everyone would run to physical values such as metals, goods or cash would be more relevant.

But as all governments (and even more so China's) depend a lot on the internet, it is not a viable option, as they would go back to the stone age.

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cryptocurrency is peer to peer tech. it s prooved that peer to peer sharing system like crypto can not be banned. the government can ban the exchange but when the exchange is done secretly ,,,who knows.

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