Where do we honestly stand with cryptocurrency? There is a lot of talk about regulation which is a far cry from a ban. However, there are some countries who are looking at making holding cryptocurrency in a private wallet illegal.
So what gives? Where is this all truly going?
Some believe that all of this is just an exercise for Central Bank Digital Currencies (CBDCs). The theory is that governments will come out with their own and all will be funneled through there. This means that governments will maintain control over financial matters taking place.
Remember, the hunt for taxes is only going to accelerate. Governments, and the associated politicians, will not allow massive amounts of tax avoidance. As cryptocurrency expands, the potential loss of tax revenue is astonishing. Just consider how much can be transacted outside their reach.
And this is with the system as it is now. If some platforms add a privacy layer, it could make tracking near impossible.
In fact, if we think about it, once of the focuses is going to give people control over their data. The net result of that, if achieved, is it will apply to all data, financial and otherwise. Thus, tracking of people's social media activity or financial moves are the same. Make one impossible, the other follows.
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Who Is Benefitting
One of the biggest things to watch is who benefits from cryptocurrency and its advancement. The world is full of inequality, on so many different levels. When you think about it, even enslavers are captive to others.
Many governments are oppressive to their citizenry. However, they are also in the same position when dealing with other governments. There is little doubt a power structure exists on this level, one that many tried to change, without success.
Could cryptocurrency alter that landscape? Many are optimistic about that.
Take the situation in El Salvador. The President of that country found a grand opportunity to tell many international organization such as the IMF to go pound sand. Certainly, if "Volcano Mining" becomes a huge industry for that country, the idea of giving it up is not going to rank highly.
Hence we are at the crux of the matter. Which side are people and institutions on? The reality is that operate, for the most part, in their own best interest. Thus, if they are benefitting from cryptocurrency, they are going to fight to maintain it.
National governments, those who have the ability to produce vast sums of debt without recourse, are naturally threatened by what is taking place. This is the level of the blowback.
As noted in other articles, it is making for some strange bedfellows.
Probably the biggest entrant into the arena is Wall Street. Certainly everyone can see their intentions from a mile away. They seek to take control of what they can and leverage it for maximum gain, for themselves. They are of the mindset that they are entitled to the lion's share of all that is out there.
It is hard to argue since that is how the present system is. Wall Street captures most of what takes place. For this reason, cryptocurrency could shape up to be a lucrative opportunity for them, at least in the medium term.
Here again, they are not going to give up that goose easily either. Once they get a taste of what is happening, they will fight using their long-established connections to maintain it. This actually can work to cryptocurrency's advantage.
Pace Of Adoption
It is hard to figure out who is truly involved in cryptocurrency or what the numbers actually are. There are a lot of estimates as to what the growth rate is. However, it is safe to conclude it is over 100% annually at this point. We will see how it continues yet it could be that we have more than 1 billion users of cryptocurrency by 2024 or 2025.
That is going to create a large force of people who do not want things taken away. It is best to remember that governments, in terms of numbers, are in the minority. Of course, the fact they have guns, jails, and nightsticks does give them a great deal of power. However, throughout history we saw that most revolutions were started (and supported) by a rather small percentage of the population.
Cryptocurrency advocates are not only trailblazers, they are the modern day revolutionaries. This has the potential to radically alter the system right from underneath them.
Greater adoption means more wealth. Since that is still a baseline for power, it is an interesting shift to consider. What happens when, collectively, hundreds of millions of people amassed a war chest of resources? Even if they are not fighting a battle overtly, their involvement is serving as a proxy for the new system.
One of the keys is how many different aspects of people's lives does all of this penetrate. What we are dealing with is a lot more than financial yet that is the primary focus. For now, we will go with it as most are still mired in the scarcity model. Nevertheless, once they understand how we are now dealing in the unlimited and abundant, a radically new viewpoint will arise.
Rate Of Return
The fiat system has nothing on cryptocurrency when it comes to money printing. We are now in a world where anyone can print money. Think about how powerful that is for a second. Throughout history, the creation and distribution of money was relegated to a select few. This gave those individuals or entities enormous power.
What occurred, mostly from the breakthrough Satoshi presented, is that anyone, even an anonymous individual or group, could create money. Today, we see the fruits of that single advancement worth trillions of dollars.
Airdrops are a favorite of the cryptocurrency crowd. Little gets people more excited then free money reigning down upon them. While much of it tends to become worthless after a short period of time, there are additions that carry tremendous value. Consider the situation with Uniswap. It now carries a $7 billion market cap and was dropped freely to the users of the application.
Here we have a concept that is repeated on a daily basis throughout the entire industry. If even a miniscule percentage of what is dropped achieves a partial success of Uniswap, we are going to see a massive explosion of wealth over the next half decade.
We also have the shift into Decentralized Finance 2.0 (DeFi 2.0). This is an interesting move because it is enabling cryptocurrency to mirror what Wall Street learned decades ago. When you control the financial system, the rules are established by you. For decades, Wall Street built a financial empire based upon their authorized ability to create products where they benefitted to the greatest degree.
DeFi 2.0 is the evolution from yield farming. Mostly this is generating products that are the next logical step forward. Each iteration seeks to improve upon the previous. That is how technology works. Here we are witnessing the development of financial technology. This knowledge can help us to understand that things will be a lot different once we reach DeFi 5.0.
One of the major differences is the outsized returns that cryptocurrency is providing. Many seem to feel this is unsustainable especially in light of what we experience in the traditional system. Again, we have to contrast scarcity versus abundance. The potential of a system that is constructed entirely in the digital realm is near infinite. We are operating according to a completely set of rules.
That said, enormous returns are regular in the traditional system. The problem is that most of us are not allowed to participate. Within the cryptocurrency framework, anyone is allowed to stake. There is not "accredited investor" or any other designation which excludes people.
Ultimately, the larger returns means the entire spectrum grows at a faster rate. This can shift the balance of power very quickly. It will be interesting to see how things unfold over the next couple years. If we follow the same trend of the last 2, it will mean that tens of trillions of dollars will be created.
Hence it does appear the road we are on is truly unstoppable. With tens of thousands of projects cropping up, most small in size, it is impossible to find all that is going on. Fortunately, it is some of these projects that will be the behemoths of tomorrow.
And they are presently flying under the radar.
That is where the true power resides.
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LOL good one.
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The best meme ever.
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Love it ❤
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I believe they will go to any lengths in order to get their cut, but I also think they won't dare banning it, at least in the western world, as it would take extreme measures to achieve such an end result considering how they do not have any actual control over crypto. A coup d'état sounds like an easier task.
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I agree there are many who want their cut and that greed will only feed it into. It is ironic how it is a protective measure.
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Your article reminds me of an old saying I learned of in the military.
I hated that saying, but as my career progressed I knew it was truthful. Reading about "banning" cryptocurrencies or regulating them, I feel it's just a backlash of governmental frustration that they don't have full control.
Governments will NOT ban cryptocurrencies, but they can surely threaten it. It is my opinion that they will do everything possible to implement regulations to get their cut. It's like that scene from Goodfellas where the narrator was explaining the restaurant owner's fate when getting in to business with the mob. Governments can't stop cryptocurrencies, but they can surely ingratiate themselves within the process.
Thanks for another great article. Glad I didn't miss this one.
There are some that are already looking in that direction so it only makes sense that we will see some try it. How successful they will be is up in the air?
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The relation of crypto and most governments are like that of Tom and Jerry.
All of this would be very likely if things would stay normal.
But that isn't going to happen.
The US FR Note will go bust here shortly.
At that time the FED-treasury will try to offer a "new" currency, which will fail greatly.
And as that new currency is show to be the scam it is, more people will no longer deal with the Infernal Revolting Syndicate.
So, i do not believe things aren't going to go down the tracks that you have laid out.
We shall see. The demise of the USD has been slated for decades yet it still seems to persist.
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In a completely automated future, will a means of exchange be necessary in the long-term. I could see crypto being a thing for the next 20 years, but I wonder beyond that.
A good question. You are now approaching the idea of a post monetary world. How close is that? It is likely longer than most people are estimating.
We nee 100% free or minimal cost energy. At the same time, we are going to have molecular assemblers to build things from the atomic level.
Is that possible? In theory physicists say yes but the engineering challenge is enormous. It might be decades before we can even think in that realm.
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I think blockchain itself is a good technology for the future, and I'm not sure what kind of role cryptocurrency would have if it's even necessary.
yeah, it's crazy how huge this power conflict is, but it is literally about whether mankind will be able to live with financial autonomy or being controlled by the nation-state. The stakes are that high. What can one do when the government bans private wallets? How long could we outsmart the state? Probably for a long time, but it also means that many will be caught and put to jail for something that is essentially not a crime.
And if all nation-states combine their effort it's also going to be really hard to escape them But I am hopeful that that won't happen so soon... The people have a voice; let it be heard!
Can they even do this? I mean they can pass a law that says so but if people are using hard wallets, as an example, what can governments do. Bitcoin and Ethereum both has paper wallet capability. That is something that is impossible to stop.
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Sometimes I have to take a break and realize that not every crypto project will be beneficial in the future. It gets hard facing the reality of this when we get so caught up with the awesome stories of many other projects. I mean, not every coin will be like Bitcoin, that's a tough pill to swallow.
At this point, banning crypto seems nearly impossible. It's becoming an indisputable part of our society and there's almost nothing Governments can do asides from regulating it and creating CBDCs to deceive themselves. It's bigger than them and they know it.
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We only need to think back to the ICO craze to realize that a great deal of what we see out there will fail.
It is important to not get caught up in the excitement of every project since there are going to be failures. This applies equally to the projects on Hive.
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Exchanging cash for crypto or crypto for cash will never be stopped. The only time crypto will be stopped is if all crypto zero out - at that point the internet is completely offline and most of humanity is dead.
They could hinder that but the more that people engage in the crypto realm, the less they need cash. This will be further enhanced when people can buy items in crypto that can move to fiat.
That is what is going to be impossible to stop.
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I agree they could hinder exchanges, but there will always be a back-alley economy.
Top points created boss, thanks for the post
Hmmm this is deep and insightful.
Crypto is here to stay. HODL
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Keep up the good work @taskmaster4450
I believe while some country have not legalize crypto currency because they are looking for a way to get tax from their citizen.
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I am not against regulation as I do believe it is needed to take crypto to the next level. I am against stupidity like banning of cold wallets as that is for security purposes and a choice we all have. Here in SA they are trying to say that moving crypto to an exchange outside the borders is a an offence which is only telling they have no control.
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If banning crypto works as well as banning marijuana, we're looking at boom times ahead!
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I have a strong faith to crypto currency and one day it will be the priority of everyone, let's see the progress and keep working with positive move.
Most of what you outlined our simply talks about the Nigerian government. A shame as cryptocurrency is the new revolution
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Finally got the time to read this and wow!! Lots of information to digest, it’s obvious that the progress of crypto is hitting them really hard, they can’t hold it any more.
Not necessarily related to crypto adoption in general, but have you seen how institutional involvement in defi has changed over the last few quarters? That took me by surprise. Although Bitcoin & Ethereum will likely turn into large institutions playground, I didn't think defi was already mostly driven by institutional money.
You're flying over a lot of topics with this post. How would you like crypto to be taxed? At some point, every State and Government needs to generate taxes. I don't think crypto fits into any existing asset class, new legilation is required.
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I think that if they want to ban, they may succeed in the first stage. And in the second stage. And in the third stage. But it will be what is in between the 1st, 2nd and 3rd stages that will grant access to cryptos.
I still remember where a huge streaming platform was banned, at a level that visiting that page the FBI symbol compared. But now, with hundreds different dominion extensions available, also the most navigated streaming platforms are jumping from one domain to another in just a few hours.
Something similar happened in Venezuela a few years ago, where United States Dollar was difficult to purchase (banks wanted to keep USD for theirselves and not selling USD for Bolivars that was falling in value). Gold was easily seizable. So Local Bitcoin came in to rescue the situation. And here again the chart of volumes back in that days
So, I guess that when CBDCs will be launched
they will try to limit the access to Exchanges and to Wallets. And at that point, a drop in users and accessibility may be seen.I talk thoroughly about CBDCs in this video
Anyway, this is more or less what I think about governments banning cryptos
Shall we, altogether, try to merge our ideas to create some innovation?
For cryptocurrencies to be destroyed, the only way is to turn off the electricity forever all over the world, but that will never happen.
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Hive is definitely a stealth fighter flying under the radar. My biggest fear in the crypto world is if countries illegalizing crypto becomes a trend. Everyone loves jumping on a bandwagon.
That is the only way I see crypto stopping, global legalization.
I was thinking about this a lot lately. The internet and blockchain have exposed enormous amounts of people to an almost infinite number of possibilities when it comes to wealth accumulation. It seems that only being involved in crypto will guarantee financial success somewhere down the line. Once the masses realize this they simply won't allow their governments to exclude them from this opportunity.
Mindboggling to think how many lives that will change and what kind of impact a global wealth explosion would have on the world. Interesting times indeed.
Also, great article as always...
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