Majority of the people who gamble on crypto are doing so only to make a quick buck. They neither know nor care about the ideology, decentralization, removing intermediaries and other such lofty goals of crypto. Most people are in it because they either saw someone making a lot of money or read about it in the media and they also want a piece of it.
It's speculation, plain and simple. If not ban, government needs to regulate it like it regulates other speculative markets.
As for the libertarian goals of removing the central authority - that's not happening.
Which is why Cryptocurrency is attractive in the first place.
I expect if you did a survey, a very small, very libertarian group of cryptocurrency "investors" may be concerned about governments managing their respective currencies.
The vast majority just wanna make money on the hottest new thing. A subset of those people might even believe in the fundamentals. The rest are just glorified gamblers.
Crypto is not a subversion of central banks and governments. It's just an amusing gimmick that exists at their pleasure, like the state lottery.
> end users always want a way to get money out of crypto and back into fiat currency. And this desire hands governments all the tools they need to starve the crypto ecosystem at will, by cutting off access to inflows and outflows if participants don’t follow the rules. When a reasonably competent and powerful government cares enough about stopping something from happening, it is very difficult, if not impossible, to continue doing business as usual. And this reality continues to take the hand-wavily libertarian crowd of crypto enthusiasts by surprise.
> The persistent requirement for fiat on- and off-ramps is why virtually every anti-censorship technique that crypto comes up with instantly suffers from the same Achilles heel.
Cryptocurrencies[1] are trying to be decentralized and free of regulation. But it turns out the world is run by people who like regulation.
[1]: There are so many people in crypto with such diverse views that it doesn't really make sense to say cryptocurrencies are X for any non-tautological value of X. Some people are 'code-is-law' crypto-anarchists, and some people are actually sane and can't wait for the law to get its shit together so they can build their cool decentralised prediction market without accidentally losing the ability to take international flights or something.
I think the mindset of those people who make such arguments are those who want to delegate individual responsibilities that involve such risks to other parties. They might not understand the risk involved when such parties get big enough to dominate and decide what to do and how to do it.
Usually, we commonly agree by coming to consensus on what to do and not to. But here the consensus, sometimes, can get hijacked by the third parties which lot of people don't understand how it happens (read historical events). 2008 banks bailouts is a good example to begin with.
As Satoshi mentioned, in the OG Bitcoin paper, that cryptocurrencies will be attractive to Libertarians.
That's a fair assumption as one would start to notice a lot of activities involved in being part of cryptocurrency, atleast currently, requires lot of individual responsibilities, especially maintaining the wallet's credentials. Not to say that they can't be automated away.
Coming to terms with taking individual responsibilities in general is very hard. Most people want others (Government) to do it.
That's dumb. The purpose of decentralization isn't to simply demonstrate the strength of the decentralization. It's an element that helps something achieve a purpose. In this case, the ability of a person to be their own bank. Not being banned also helps that purpose. Why would cryptocurrency supporters lobby for government bans?
Isn't the entire appeal of crypto is that it's not regulated? Why the hell would I want it if it's controlled just like a fiat currency. That means it's susceptible to idiotic government decisions right?
The only reason our regulatory masters every say this shit is because they want a piece of the pie for themselves. You see it in every industry where they're not getting a cut.... oh gambling very very bad! Regulate the hell out of it and now it's fine to have sports betting and all sorts of other "sin" pleasures available.
Then there's always this "guarantee" that the tax dollars will go to the children except they pull the rug out on other money that was previously going there.
Nobody is on board with crypto. And while governments can't shut it down, they can strongly discourage people from putting money into it, by simply enforcing existing regulations, which is what I think governments will start to do now.
If your argument is that governments should not regulate cryptocurrency because the point of cryptocurrency is to evade government regulation, you should expect cryptocurrency to become illegal rather than regulated.
Bitcoin and for that matter all crypto currency is a libertarian ideal.
Libertarian ideals do not fit in communist societies. Regulation was always coming, as even liberal societies regulate.
But regulation is only there to keep the established order. The established order is very afraid of crypto right now in the same way the music industry freaked out over MP3.
I can't help it, but I get annoyed when crypto is branded with illegal activities like terrorism, fraud etc. No one talks about USD being used in the same way!
Government has a right to regulate in order to deal with negative externalities and the negative externalities from Bitcoin and other crypto are extremely large. Most of crypto has been various type of financial schemes and regulators should ensure at a minimum that all investors in such schemes were properly accredited and impose regulation if the tokens were historically taking unaccredited investment.
The government also has the right to regulate polluters and even an outright ban is reasonable if they conclude that the environmental cost of proof of work vastly outweighs the very limited use cases and benefits that have been shown to date.
Finally, and I think the strongest argument is the government is allowed to regulate financial transactions. Bitcoin and other crypto intentionally circumvent this by removing the party conducting the financial transaction. Government could conclude this is unreasonable resulting in a ban or could create reporting requirements for any cryptocurrency transaction, subjecting one or both end users to requirements currently dealt with by banks. The idea that crypto-proponents seem to have is that removing the bank should remove all reporting requirements on transactions and I don’t see a reason for that to be true.
I think in aggregate there is a fairly reasonable case for a ban across multiple substantial issues.
And no, the government does not owe people for the price consequences of its regulatory policy. Investors in casinos are not made while for changes in gambling laws.
Right-wing American libertarians in particular have this simplistic view that government control over anything is the root of all evil. Therefore the decentralized aspect of crypto must seem like a wet dream.
I believe the system where a semi-independent central bank has the ability to regulate the currency of the country is a good thing on the whole. It's the best balance of compromises we have seen actualized.
Having a fixed supply of digital coins seems more like a return to the old days where there was a fixed supply of gold and silver coinage. And that era was called the dark ages. A system with fractional reserve credit is much more conducive to economic growth and prosperity.
You don't understand the point, or you don't agree?
Because to me it should be easy to understand that Lottery isn't marketed/treated as an investment (crypto has started to be legitimately treated as such), and historical returns don't suggest it would work.
Crypto is just attractive enough it could pull the wrong type of attention from everyday people acting as investors.
I don't agree with direct regulation, but I can definitely see why the government would be worried.
Unfortunately with governments it's no longer about what makes sense but about what they can get away with. Much like you can expect a giant for-profit business to do anything to maximize its profit, one can expect a government to do what it can to maximise its control. That's just an observation.
Regulating cryptocurrencies can have the same effectiveness that regulating information exchange through the internet had. Yeah sure it can be a bit impractical or scary for most to go around artificial limitations imposed by their state but it is practically impossible to keep the really motivated from doing what they want.
For cryptocurrency fans, it is quite obvious that such a system would not be desirable or beneficial at all. The entire purpose of cryptocurrency is to remove governmental control of money.
I’m not libertarian at all. I see cryptocurrency as a fair and transparent way out of the extreme wealth inequality we see in the world today. Decentralization gets me excited. New ways of using technology gets me excited.
What I don't understand is how little this argument has changed over the past seven years.
Once policy makers understand crypto-contracts and cryptocurrencies for what they are they'll either regulate them to the point of where libertarians rue the day they were invented or they'll ban possession with jail-time as a punishment for knowingly holding them.
This isn't a novel insight. It's what I've said for the past seven years. It didn't stop me from buying Bitcoin in 2011 because I could see the medium term upside, but if anyone seriously thinks that these will become the backbone of our economy in their present form is delusional. Governments are not going to allow such a shift in power.
It's speculation, plain and simple. If not ban, government needs to regulate it like it regulates other speculative markets.
As for the libertarian goals of removing the central authority - that's not happening.
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