Regulation in crypto — the end of permissionless P2P electronic cash?
“Bitcoin: A Peer-to-Peer Electronic Cash System” is the title of the Bitcoin whitepaper published in 2009 by Satoshi Nakamoto. In this document he elaborates on the advantages of a cryptographically secure Peer-to-Peer network. Now that in 2022, governments are starting to look at crypto, institutions are investing, and retail investors are aping, is a regulated but permissionless protocol viable, or even possible?
Governments are beginning to look at cryptocurrency, and it is plainly obvious that laws will be passed limiting the ecosystem, and coloring the gray areas. Most will say that this move is positive for us, the early adopters, but I am not sure that a governmentalized lines up with Satoshi’s vision and the fundamentals behind this movement.
Let’s begin by speaking about the threat that Bitcoin, or any other cryptocurrency poses for our governments. The thing that grants governments the most power is, the ability to print money and regulate the financial institutions. Crypto denies both of these core principles:
- Most cryptocurrencies have a capped supply not allowing the government to inflate the supply.
- Most cryptocurrencies are decentralized and permissionless, therefore governments cannot regulate or manipulate the markets in their favor.
Now that we have established that governments are threatened greatly by crypto, and that crypto could have a devastating effect on the power that government holds, we must speak about what the government can (and might) do to stop this revolution:
- Governments could implement CBDCs (Central Bank Digital Currency), a digital coin under the complete supervision and authority of the government. A CBDC will be exactly like paper cash but worse. Not only will it be inflatable in moments, it would be extremely trackable and traceable, denying us our right to privacy and anonymity.
- Governments can outlaw crypto, thus making anyone, not deep in the ideology and philosophy or, criminals shy away.
- Governments have immense resources. Maybe not to the extent of shutting down the strongest of the decentralized networks, but definitely to the extent of making most chains virtually unusable.
What we can do about it:
- Call or E-Mail your local representative to tell them about the positives sides of crypto.
- Make crypto less offensive to government (even if it still is), “BTC is not a dollar killer, but rather will go hand-in-hand with it” etc.
- Keep innovating, we can out-innovate our governments. We can build infrastructure that they cannot dream of toppling, we just have to work together.
We are Satoshi.