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While delivering a keynote address to the attendees of the Bitcoin 2022 conference in Miami, PayPal co-founder and billionaire tech investor Peter Thiel accused the ‘finance gerontocracy’ of intentionally stalling the progress of cryptocurrencies and called Buffet Bitcoin’s “enemy no.1.”
During his speech, he called out multi billionaire investor Warren Buffet and the CEO of JPMorgan Chase, Jamie Dimon, for their opposition to cryptocurrencies.
The battle for decentralization of finance
Whether or not you agree with Thiel’s view of Buffet and Dimon as the enemies of cryptocurrency, there’s no denying the fact that governments and some large institutions around the world have long been wary of this new, decentralized digital payment method.
Even with governments pushing hard to keep cryptocurrencies off the market, investors are freely trading cryptocurrencies.
Even in countries where governments have banned cryptocurrencies, people can easily buy and sell them without the government ever finding out.
For instance, you can buy Bitcoin pretty much the same way you’d buy it elsewhere even in Bangladesh—a country where cryptocurrencies are banned.
It’s exactly this lack of control that’s causing the governments to feel uneasy about cryptocurrencies.
On the other hand, fiat currency can be controlled by the government, through various intermediaries like banks and other financial institutions.
Governments can track the movement of fiat currency within an economy as well as between different economies.
How crypto can dismantle governmental control
This ability to track and control the currency system allows the government to create and implement a monetary policy, dictate how money is transferred between different sectors, and regulate the economy.
Fiat currency also helps with tax collection by allowing the government to track the earnings of individuals as well as corporations.
Cryptocurrencies are created and exchanged through a decentralized, digital system known as blockchain that has the potential to dismantle the government’s control over the economy.
For instance, Bitcoin (currently the most popular cryptocurrency) allows for peer-to-peer transfers between different parties on its network.
The ability to execute P2P transfers means that traditional intermediaries, such as the central bank, are no longer needed to distribute currency throughout the economy.
Why the government should consider accepting cryptocurrencies
Most governments are headed by aged policymakers who are naturally wary of a new technology that threatens to overturn the financial system that they know and understand.
The crypto community can overcome this to a certain extent by reaching out to key policymakers and patiently addressing their questions and concerns.
While there are obvious issues with crypto such as lack of transparency, popular cryptocurrencies like Bitcoin offer a range of benefits to individuals and businesses alike.
Finding a middle ground could make the government popular among crypto supporters. Here are the benefits that cryptocurrencies offer traders and investors:
1. More convenient transactions
Cryptocurrency transactions are easier, faster, and cheaper than transactions involving fiat currency. These transactions are also much more private, secure, and harder to track than fiat currency transactions.
2. No need for a bank account
Bitcoin ATMs are designed to allow people to buy Bitcoin with cash, which means you don’t need a bank account to sell or buy Bitcoin.
3. Reliable hedge against inflation
Cryptocurrencies are a great investment option and can act as a reliable store of value during times of inflation, since they’re not affected by the policies of any central bank.
The anti-inflation features are even better with some cryptocurrencies like Bitcoin, since the Bitcoin protocol is specifically designed to maintain scarcity as a hedge against inflation.
4. Low fees and quick settlements
Crypto is a great medium of exchange for both global and local transactions. The fees are lower than traditional wire transfers and payments are settled within seconds.
5. Rapid growth
Cryptocurrencies, including Bitcoin, are one of the fastest growing markets in the world. Between 2013 and 2021, the total market cap jumped from $0.05 billion to $1.2 trillion, proving crypto to be a lucrative asset class for high-risk investors.
6. Lack of state control
The transactional freedom of cryptocurrencies is one of the greatest benefits. Though a benefit for the general public, it’s also a major reason why it’s opposed by many governments and institutions.
Since cryptocurrencies are decentralized and not controlled by any state, it’s resistant to government sanctions and censorship.
Choosing the right exchange goes a long way
Many governments, especially from developing economies, cite crypto scams as a major drawback of blockchain. However, choosing the right exchange can be instrumental in ensuring your money doesn’t go to scammers.
Choosing an established exchange with a proven track record not only keeps you safe, it also offers other benefits like better functionality.
Here are the things you should look for, when choosing a crypto exchange to buy Bitcoin or any other type of cryptocurrency:
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Your chosen crypto exchange should be available globally and allow for local currency transactions.
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Crypto exchanges don’t require you to buy a minimum value of a cryptocurrency (except for the default minimum of 0.0001 Bitcoin). If it requires you to deposit a relatively big amount, run in the opposite direction.
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The crypto exchange should offer best-in-class security — including data encryption and disaster recovery backup systems — to ensure that all your Bitcoin purchases are safe. Of course, you can also use a cold wallet to protect your assets.
Will gerontocracy prevail?
Will finance gerontocracy succeed in stalling the progress of cryptocurrencies? Only time will tell. In the meantime, investors are quickly getting in on the action in the crypto market.
Regardless of when and if the government gets on board with it, the fact remains that cryptocurrencies like Bitcoin (and the associated blockchain technology) have put in motion the biggest digital revolution since the invention of the Internet.
Author Bio:
Email - ruparelia.arjun@gmail.com
An accountant turned writer, Arjun writes financial blog posts and research reports for clients across the globe, including Skale. Arjun has five years of financial writing experience across verticals. He is a CMA and CA (Intermediate) by qualification.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.