Global markets are beginning to feel the pressure of a slowing economy – and Bitcoin could fall victim to it. With economies stagnating around the world after growth over the past decade, many believe Bitcoin is expecting a bleak future.
Bitcoin – not a friend of the government
As is well known, Bitcoin is no friend of centralized governments and economic controls. In fact, Bitcoin was launched in response to the problems of government bailouts after the 2008 crisis.
Bitcoin’s Bitcoin Genesis block contains the heading: “The Times 03 / Jan / 2009 Chancellor shortly before the second bailout for banks”. The “too big to fail” events during the crisis paved the way for Nakamoto’s decentralized financial mechanism.
The economic successes that followed the crisis have led to a long bull run. However, the current global economy appears to be on the brink of a substantial turnaround.
Recent news – such as the need for quantitative easing and negative interest rates in Europe – is worrying. When the next contraction takes place, this current policy could mean the collapse of many economic structures.
Regardless of the impact of a financial disaster, governments are not interested in unregulated payments. When consumers use Bitcoin in bulk, governments face a difficult choice. The only options available would be to tightly regulate Bitcoin or ban it altogether, as TruthRaiderHQ suggests.
This type of response has been seen in China, where Bitcoin is an outcast by the government. Interestingly, however, the Chinese government uses the Bitcoin framework, the blockchain, to issue its own digital currency.
Instead of tentatively banning cryptocurrencies, the Chinese government has created its own. Blockchain technology enables verifiable and traceable control of transactions. The result is greater control than before.
Whether Bitcoin is banned or not, many see the move towards more control as a harbinger of the future. As global markets feel pressure, the first cryptocurrency could be banned by many governments around the world.
But it could also be that there won’t be any major difficulties as Bitcoin is still such a small fish in the global financial system. A real financial breakdown would require massive government responses, and the use or banning of Bitcoin could be secondary to that.