Why governments and banks fears Bitcoin

Bitcoin asserts that its powered by its users with no authority or middlemen. The lack of authority is the main reason governments fear cryptocurrencies. To better understand this fear, let me tell you why control matters.

Governments have control over standard currencies (money). They use central banks to produce or destroy money, which is known as monetary policy to apply economic influence. They also control how standard currencies can be exchanged, which makes it possible to track money movement, control who profits from that movement, collect taxes, and trace illegal activity. This control is lost when people create their own currencies much like what Bitcoin represents.

Bitcoin is an experiment created by our damaged banking system. The banking system is believed to be based on trust until we discovered that the trust had been systematically violated and broken by all the institutions involved. The problem with standard currency is that its full of holes of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend out in surges of credit bubbles with just a fraction in assets. We must trust them with our privacy and for them not to allow thieves to empty out our accounts. The difference with Bitcoin is that its system is based on crypto proof instead of trust.

Bitcoin brings up many attractive questions. Is it legal? In some countries it might, but in the United States most likely no. Is it technically frail? Possibly yes, not because its was inadequately designed but because everything created through software will have its disadvantages. Is it original? Amazingly so. Will government authorities hate it? Yes, and will use, for instance money laundering to validate their opposition. But what it comes down to its just because they can’t tolerate the idea of a currency that can’t be controlled thru political order.

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