Bitcoin – something we have all heard of but never fully understand what the hype is all about. Apart from the hype, there are always news headlines regarding the scandals related to bitcoin. All of this talk in town only leads us to one question: what’s the controversy over Bitcoin?
For starters, you need to know what Bitcoin is. According to the company, they are the pioneers of a peer-to-peer payment network that involves no intermediary. Here , the first controversy begins: governments are highly against cryptocurrencies like Bitcoin simply due to the lack of a middleman during the buying and selling of money or commodities.
Governments and Money: What’s the Relationship?
Governments are the ones who issue currencies to their people. While currencies are merely numbers printed on pieces of paper or metal, the government claims that they have value, and the general population believes them. These notes and coins are then used to make transactions of all kind, and the money flows around through the entire economy.
However, conventional currencies do not have any actual value since they cannot be given back to the government in exchange for commodities. If you want to purchase even something as simple as a loaf of bread, you will have to make a transaction with a third-party who possesses that item.
The only thing the government does is control these currencies. They exert economic influence over the entire country through their monetary and fiscal policies – causing a huge impact on the business environment, crime rates, and much more.
Why Bitcoin is a Threat to the Government
When cryptocurrencies such as Bitcoin come into play, the general public will not need the government to provide them with notes and coins as currency anymore. Dependency upon the banking system and even the fiscal and monetary policies devised by the government will no longer be there. This is because Bitcoin operates in the digital world with people using only their computers to make transactions and purchases. The currency is not tangible, and it only exists in digital terms. Due to these attributes, each transaction is made directly between the buyers and sellers – without the need to involve any middleman such as the government or the banking system.
As Bitcoin becomes popular, the controversy begins that what if the banking system in the entire world becomes redundant? And if banks are not operational in an economy, who will be paying interest to people who save or provide help when there is an error in a transaction?
The government is not the only sociological institution to be affected by the rise of Bitcoin – instead, there will be implications on every single member of the economy. After all, bitcoin was created by a few anonymous programmers on the internet and there is no reliable evidence available to know what would happen in case of a failed or erroneous transaction. In the world of finance and the stock market, making an investment in bitcoin is far too complicated and risky. But then again, why is the value of the bitcoin continuing to rise? Is cryptocurrency the future of payments? That is where the true controversy lies.