Bitcoin, since its introduction in 2009 has come a long way to compete against US dollar and other prominent fiat currencies of the past. Banks and financial institutions who were the gatekeepers of everyone’s wealth now feel threatened as they find themselves powerless in front of the new digital currency. Bitcoin is completely independent and pseudonymous, taking central bank and other government organizations out of the picture. As if that is not enough, there is no single entity that controls bitcoin.
The decentralized nature combined with security, speed and low costs of transaction has helped bitcoin attain the status of alternate currency in the global economy. Bitcoin has become the symbol of financial liberation and independence where the trusted third party for transactions are individuals and not banks or governments with their own agendas. Bitcoin is making the concept of one world- one currency true rendering the whole foreign exchange structure obsolete. It is only a matter of time for the bitcoin network to gain the required threshold of users to attain mainstream status where it can operate completely independent from fiat currencies or exchanges.
If that day arrives, governments will lose complete control over economy and taxes, banks will be left obsolete, conventional payment processor who depend on huge transaction fees for making profits will be forced to shut shop as transaction fees over bitcoin network is negligible compared to them. In a nutshell, bitcoin’s ascent threatens to diminish the influence of all powerful entities with self-serving interests. By doing so, it hopes to give the power back into the hands of individuals.
The governments and banks wouldn’t want that to happen and they would do anything to stop bitcoin from becoming popular. Hence, there are always waiting to jump in and interfere with the operation of digital currency transactions whenever they get a chance. Some of the best examples can be the recent crackdown by Australian banks on the country’s bitcoin exchanges where they closed their accounts without offering any explanation, United States introducing strict regulations on bitcoin businesses, introduction of multiple taxation regimes, Russia imposing jail term for up to four years for exchanging bitcoin to ruble and the latest attempts of European Union to impose strict regulations on bitcoin and other alternative payment methods without having any evidence of its use by terrorists.
Most of these decisions are taken in haste, and the due process is often ignored by both institutions and authorities, as long as these governments, banking and financial entities perceive bitcoin has a threat to their existing way of operation, the digital currency will always have a bulls-eye on its back.