Bitcoin has absolutely terrified the governments of the world, since they know Bitcoin will transfer the power over money from the governments to the people. This is why governments have been banning Bitcoin, regulating it so much that it is intractable to use banks long term for Bitcoin activity, suing crypto and blockchain companies, and arresting prominent Bitcoiners. Below I will explain how Bitcoin will inevitably take over the global financial system, and how this is a problem for the establishment.
Governments use fiat currency to make money and increase their power. Each government has a Central Bank, which can print fiat currencies at will, at the expense of all the people who hold fiat currency, according to the laws of supply and demand. Several countries have experienced hyperinflation crises, including Zimbabwe, Venezuela, Iran, and Turkey, due to excessive printing of fiat currency to balance budgets. In these countries the government got the money they needed, while the people lost everything. Even the United States will inevitably experience hyperinflation and a currency collapse.
Bitcoin can not be printed at will by anyone. There will be a total supply of 21 million Bitcoins, and these can only be mined via a set-in-stone algorithm. Bitcoin is cryptographically secure, and no government or entity can somehow hack Bitcoin to print more. Therefore, as global fiat currencies collapse in succession, Bitcoin will gain value relative to them. This is already happening, and can explain some of Bitcoin’s long term price rise.
The government is scared of this, since for the first time in recent history people have a choice between an inflationary currency, and a currency that will hold value long term. Prior to Bitcoin, governments had total control on inflation rates for currency, and the people could do nothing about it. Now people can choose for themselves. In countries like Iran where fiat is collapsing the government does everything they can to stop it. Due to Bitcoin’s decentralization and cryptographic security, Bitcoin literally cannot be stopped however. If someone wants to use Bitcoin and follows proper security and anonymity procedures, no law can stop them.
Decentralization is the next strength of Bitcoin. The Bitcoin network runs on thousands of nodes and many more miners spread across the globe, and as long as any single node survives, Bitcoin survives too. Even in the worst attack Bitcoin would survive, so there is nothing any government could do to eliminate Bitcoin.
Another aspect of Bitcoin’s decentralization is that it is immutable. No one is controlling Bitcoin, it is impossible to control. Therefore, Bitcoin transactions can never be reversed, and accounts cannot be frozen or seized, if proper security procedures are followed. This makes Bitcoin ideal for people to use, since they have full control of their money. Compare this to fiat payment networks, which are controlled by multiple centralized organization. Practically any type of fiat payment can be reversed, and any fiat account can be frozen or seized.
The ability to reverse and freeze money gives governments great power over the people, but that power is weakening with each dollar that enters the Bitcoin ecosystem. For the first time in history, people have full control of money, and it is obvious the world will transition to Bitcoin. Not even gold is as secure as Bitcoin, since gold is easily stolen by physical force.
The ultimate fear that governments have is Bitcoin will replace fiat currency. This would eliminate the government’s power over leveraging currency to balance budgets, and their power to control people’s money would be relinquished. GenesisBlockNews believes Bitcoin will ultimately take over the global financial system. Bitcoiners should be ready for war however, the government will not easily give up their power over money. The regulations, lawsuits, and arrests are the first stage of the Bitcoin War.