Defining what life is has always been a challenge. Scientists and philosophers have come up with many definitions to differentiate the living from the non-living. Are viruses alive? DNA molecules? Computer viruses? The inventor of cryptographic hashing, Ralph Merkle, has made the argument that “Bitcoin is the first example of a new form of life.” If something is alive, then it can be killed. Over the years, Bitcoin has survived technical attacks, internal conflict and outside criticism. Bitcoin has shown a quality that goes beyond resilience, that doesn’t just withstand the shocks, but improves when facing volatility, randomness, disorder and uncertainty. Bitcoin has an “antifragility” quality. But is there Bitcoin kryptonite? Can something kill Bitcoin?
Over the years, people have come up with all kinds of scenarios when they talk about the demise of Bitcoin and how it will eventually die. Recently, I’ve read things like Google’s Project Cache Could Kill Bitcoin, Governments Could Kill Bitcoin, Will China Kill Bitcoin?, The Way to Kill Bitcoin Is to Keep Price Under $1,000 and other stories along the same narrative.
Basically, there are two types of Bitcoin killers: Governments and hackers. You’ll hear things like governments will ban it or hackers will take it down. Technical attacks damage the network, while political hurt Bitcoin holders. potentially both can slow or prevent user adoption, create problems to the existing infrastructure and slow down innovation and development.
Generally these things can affect Bitcoin, but its not clear if they can kill Bitcoin completely. Cryptocurrencies exist today because the traditional financial system has failed. Many people, including myself would like to see an independent form of money emerge, that will force governments to compete. Competition brings innovation and gives consumers more choices and better service.
Bitcoin is apolitical and uncensored money. While nations discourage the use of Bitcoin, any ban is technically unenforceable. Any government control and censorship against Bitcoin, only communicates Bitcoin’s value proposition. Governments that threaten people with jail time, because they want to buy Bitcoin, are only confirming their control over money and the incentive to use Bitcoin becomes. stronger.
The are several stealth ways to send Bitcoin using Tor, SMS, encrypted emails or even using steganography to encode transactions.
Governments try to ban bitcoin? LOL
The image below includes a signed bitcoin transaction transferring $12m USD. pic.twitter.com/4QaH1s7br8
— Andreas (@aantonop) May 27, 2015
The reality is that Bitcoin has many layers of redundancy and governments con’t really control it. Bans never work, they just lead to black markets situations. Also, censorship and restrictions usually drive innovation, with people trying get around them.
If the political and economic institutions of the gold standard in early 20th century, existed in 2008, would Satoshi ever create Bitcoin?
Bitcoin has thrived because the global monetary system is highly problematic. So far, the status quo has favored Bitcoin. The longer things stay as they are, this gives Bitcoin the time it needs to build more liquidity and become more competitive.
Its is highly unlikely Bitcoin will die.
If governments really wanted to take out Bitcoin, they would need to undermine Bitcoin’s economic incentive. They would need to improve and change their existing monetary policies. But they can’t and they won’t.
In the last 10 years, Bitcoin has gone from a white paper to a global market worth $150 billion. Banks like Bank of America and JPMorgan Chase are applying for patents on cryptocurrencies and blockchain. This ecosystem has been on a rollercoaster ride, with huge price swings, rapid expansion, big time hacks, and of course sensational headlines. On this wild ride, it has been easy to lose sight of what Bitcoin means and what it fundamentally represents, beyond speculation and making a quick buck.
Bitcoin’s community of early adopters is very unique and gave the world a free, private and uncensored single global currency.
Bitcoin is not in danger from any government or anything else from the outside, but only from within. The future of Bitcoin will not depend on the wishes of its early adopters. The fate of Bitcoin and cryptocurrencies will be determine by what the 7 billion people around the world want and Bitcoin’s community should be vigilant.
Ilias Louis Hatzis is the Founder at Mercato Blockchain Corporation AG and a weekly columnist at DailyFintech.com
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