The one thing that you can say about the crypto verse is that it’s never dull. It may not always give you the kind of real excitement you crave for, but monotony never shows its ugly face.
Only last night a new controversy started in the US that will surely shake the cryptosphere quite a bit. It will also fire up some debate. There is a possibility that the American government will ban its citizens from buying and using digital assets.
The new development comes courtesy of Brad Sherman, a Congressman. He addressed the House Financial Services Committee proposing a new bill that would make cryptocurrencies illegal.
His openly hostile statement says that a ban is the only way to go because blockchain-based currencies are a threat to the USD’s power and stability. He adds that they’re only useful for criminal users who want to launder money, deal in drugs, or evade taxes.
Mr. Sherman’s antagonistic stance on cryptocurrencies is not a novelty by any means. On March of last year, he went on the record calling digital assets “a crock.” A few months later, in July, he stated that the US should impede the country’s citizens from mining or buying cryptocurrencies.
The politician is not the only high-profile opponent to cryptocurrency, of course. Joseph Stiglitz, who has a Nobel award in economics, doesn’t like digital money any better. Only this week he said that crypto should be shut down “because the anonymity and lack of transparency could give malicious actors new ways to perform illegal activities.” He continued to say that,
“We have a very good currency [the US dollar], so far the currency has been run in a very stable way. We talk about the attributes of a good currency, and the US dollar has them whereas cryptocurrencies do not. I actually think we should shut down the cryptocurrencies.”
Unfortunately, such comments from an economist of Mr. Stiglitz’s reputation give credence to absurd remarks like those of Mr. Sherman. And other economists, politicians, and investors (Warren Buffet comes to mind) also hold a stance against crypto about which they’re very vocal.
The thing about Mr. Sherman is that this time he’s not just throwing a rant. He’s trying to put his decided fiat money where his mouth is by asking to enact his anti-crypto preferences in a law. The main issue he refers to is the USD’s disempowerment as the primary means of exchanging value in the global economy.
The congressman affirms that weakening the USD’s power has always been one of the crypto aficionados’ top priorities. Also, the appearance of a single global currency that could do away with censorship and find ways around economic decisions arising from the US government, such as sanctions against “rogue” countries. Unlike Mr. Sherman’s usual rants, this point is funny because it’s true, at least partly.
It’s not the first time somebody calls for a ban on crypto in the US or elsewhere. Chances are it won’t be the last either. But there’s a question more important than an actual ban, should it occur, and it’s this: can cryptocurrencies be really banned? How would that happen?
Is a ban really possible?
We’ll save you some stress and give you the short answer right now. No, you can’t ban cryptocurrencies, hard as you could try. Even if you’re the world’s most powerful government.
Decentralization is one of blockchain’s technology primary characteristics. That feature makes it immune to censorship because the network’s critical information is distributed among many nodes which keep the system working as a team. It’s a monster of a thousand heads, so cutting one off is futile. The only way to exert control over the whole network, or the information it carries, is to shut it down completely. And a system extended all over the globe, as Bitcoin’s (but also the case with many other blockchains) can’t be shut down.
A ban would need for Bitcoin, or other cryptocurrencies, to have a central authority. Thus, if you want to bar the cryptocurrency, you just block the currency’s primary agent, and that’s it. But there’s no central authority in cryptocurrencies, so you’re basically trying to catch a ghost.
That’s what Satoshi Nakamoto intended from the beginning, and you can read it if you take the time to review Bitcoin’s now legendary white paper. It was supposed to defeat any attempt from governments, the banking system, or any other power broker to censor it, control it, or bring it down. And it’s been successful so far. So you could ban a few nodes in the network for sure.
But it would be exceedingly hard to block absolutely all the nodes in the planet which is what it would take to ban a cryptocurrency. And you would have to do this for every network that supports every cryptocurrency. Adding a further level of difficulty, these networks are not static. New nodes are popping up all the time, and keeping track of all of them is nearly impossible.
Of course, we’re assuming that the “ban” is going to be enforced rather than just announced, leaving the American users free to either respect it or not, which is an option indeed. Another option would be to punish the economic activities related to digital assets. That’s much more feasible, and could achieve the desired effect, at least partially. For sure, more effectively than a real technological ban.
Then there’s criminalization. The US government could declare all activities related to cryptocurrencies as felonies. That would make every cryptocurrency holder, or miner, or business a criminal. That’s possible, but how effective could it really be? After all, that’s the exact same policy that has given us the war on drugs. It has been a spectacular failure on all fronts.
A complete ban would thus be utterly impossible. But the government could make cryptocurrency’s users’ lives so miserable, and complicate the use of cryptocurrency so much that all the advantages could be lost.
Fortunately, the rest of the world is not on Mr. Sherman’s side on this. It’s not that there are so many countries that are crazy about digital assets. Yet, many of the world’s most significant economic powers are sick and tired of depending so much on the United States government by depending so much on the USD. Donald Trump’s antics have exacerbated that situation. As a result countries like China and Russia are dumping their USD reserves and buying gold and other assets to store wealth just as effectively.
Mr. Sherman is right in that the USD is losing a bit of ground as the world’s leading currency. But his understanding of the situation is dismal, and he’s barking at the wrong tree. Going against crypto will do nothing to help the USD because other countries in the world are not abandoning it in favor of Bitcoin or crypto. They’re doing it because of the US’ erratic behavior as a superpower.
So how worried should we be about the ban? Not that much. It would be impractical, to say the least. And let’s not forget that Wall Street is slowly but surely becoming interested in cryptocurrencies. Once the New York financial establishment makes up its mind and comes into crypto, the political power they hold will virtually guarantee that the government will let things be, if only not to irritate the country’s bankers.
That being said, the interest that backward politicians such as Mr. Sherman have in attacking cryptocurrencies only shows that the crypto verse is accomplishing its original mission, which was to disrupt the world’s financial system precisely to take power away from banks, governments, and politicians.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.