The crypto sphere in the US has, in recent times, been under intense scrutiny with crackdowns against the trade and relative transactions getting more intense. However, despite these letdowns, the cryptocurrency market has experienced a surge in popularity and growth albeit with a significant amount of setbacks.
On this account, one of the questions on the mind of many is ‘could the US dollar really be threatened by the growth of cryptocurrencies?’ or could cryptocurrencies eventually replace the ‘world’s reserve currency’ in the global financial scenes?
The Power of Cryptocurrencies
There are several properties of cryptocurrencies that makes the amenable to use as alternative methods of transactions, store and transfer and value. They are so easy to distribute such that all you need is a good network connection and wallets without any transaction leading back to the owners.
Decentralization is one distinct feature of cryptocurrencies that gives them an edge over all other forms of cash systems. Bitcoin and other cryptocurrencies are not answerable to any financial institution or central authority. As such, government officials who want in on controlling everything to goes in and out of their territory are finding all these a bit overwhelming.
However, with no central authority presiding over their flow and anonymity, the power of their distribution, any chance of controlling them would be dependent on a global consensus. Plus even if there is a chance of restricting their flow across the border of any country, a simple VPN is enough to implement easy operation.
Andreas M. Antonopoulos tweeted in 2016:
The question is not whether #bitcoin should be regulated, but whether it *can* be regulated. The reality is “No”. The rest is nostalgia.
— Andreas M. Antonopoulos (@aantonop) December 31, 2016
In other words, any attempt to stop the growth of cryptocurrencies would be like a wild goose chase. Take a dark site for instance, occasional arrests of servers and people involved might be made but there is no possibility that the entire site could be regulated.
In the case of cryptocurrencies, tracking the owners of cryptocurrencies is really difficult. While using a public blockchain could give links to certain wallets, linking them to a real person is near impossible. Worse, a person could use a cold wallet or even an alias and poof! Nothing is traced to them.
Moreso, if there are still speculations as to whether Bitcoin’s Satoshi Nakamoto is a real-life person or a group of developers, how easy can it be to trace Bitcoins to the real world?
Could the Cryptocurrencies be Drained Out?
As far as regulating cryptocurrencies goes, limiting ‘cash out’ is the only way to control them. However, the possibility of that happening is zero to nil simply because a global consensus is needed.
The major issue is that almost all global currencies can be traded online. Hence, in extreme cases, should a country close its doors against crypto trading and another country still keeps its doors open to crypto exchange into its local denomination, a cash out could be effected.
Hence, short of an agreement on regulations, the solution is to embrace the technology and look towards possible ways the technology could help in development. Integrating it into the present financial models in place in countries might be quite difficult, given their developmental make-up.
However, further development with the crypto community would go a long way in assuaging any doubt because these currencies look like they will be around for a long time.
Ifeanyi Egede is an experienced and versatile blockchain technology and cryptocurrency content writer and researcher with tons of published works both online and in the print media. He has helped several startup companies grow their businesses in the blockchain and cryptocurrency space. Ifeanyi has close to a decade of writing experience, and when he is not writing, he spends time with his lovely wife, Tega and adorable daughter, Chimamanda.