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Bitcoin could be in trouble down the road with a number of bad actors and government influences standing in the way. Our colleagues over at CoinGeek illustrate a few examples. These include criminals, political regimes, Ideologues and ‘Rent’ Seekers / Privilege Seekers, to name a few.
One of the first major digital currency users were criminals who bought and sold drugs, guns, weapons, child pornography, stolen credit card details, and even assassination services in dark markets on websites like Silk Road. Early headline news about BTC gave the impression that “Bitcoin” was a boon for criminals, fraudsters, and corrupt officials, writes Marquez Comelab of CoinGeek.
Indeed, by not revealing the identities of individuals, Bitcoin provides people a level of privacy. This turns out not to necessarily be the case however as all transactions are visible in cleartext on the blockchain.
They are accessible to investigators around the planet to study, and eventually, evidence will turn up that will link a Bitcoin address of interest to a specific identity.
Then there are the government interventions. Certain governments may perceive Bitcoin as a threat because it provides ways for their citizens to circumvent their ability to monitor and control their citizen’s capital, money, and other assets.
We have also witnessed how Bitcoin exchanges are being pushed to block Bitcoin addresses originating from Russia following the unprovoked invasion by that country of the Ukraine.
In regard to ideologues, Comelab points out how this group is driven by various ideologies inspired by economic theories advocating for a completely free market in producing, distributing, and managing money to end banks’ monopoly. Some anarchists and libertarians believe that Bitcoin allows them to limit or remove power and control from the government and the state. These people want a cash system that is difficult for governments to regulate or control.
And while that may be a great concept in theory, it is not rooted in reality.
Comelab points out that political groups could go from being trustworthy and competent to one that is incompetent, or worse, despotic. Therefore, having users and miners spread worldwide helps ensure that Bitcoin remains politically neutral.
And finally there is the less familiar ‘Rent’ Seekers / Privilege Seekers. Examples might include lobbying, bribery, and corruption. It refers to a means of achieving a benefit by manipulating the social or political environment in which economic activities occur rather than creating wealth.
Comelab writes:
Those who control the BTC code keep the blocks intentionally small to limit Bitcoin’s capacity to 7 transactions per second. Why would they do such a thing? So that they can say to the rest of the world, ‘Bitcoin does not work as it is’ and then sell us a solution from which they and their partners control and profit—a solution that is not needed if they allow Bitcoin to run as it was initially designed. This behavior is Rent-Seeking. Privilege seeking. They are trying to profit by keeping BTC in the crippled version that it is today.
Comelab stresses the importance of sticking to blockchains that grow as big as they need to ensure that Bitcoin can handle the transaction throughput the world needs.
- Aaron Goldstein, Gambling911.com
