Although bitcoin has slowly been gaining mainstream acceptance among the online community and businesses, it seems that most governments are opposed to the cryptocurrency. For one, the lack of a centralized body or monetary authority overseeing bitcoin exchanges and transactions is seen to be the culprit for the lack of security and the rise in hacking incidents.
In line with this, governments are also wary that the absence of any code of conduct or regulations governing the bitcoin industry could result in an unstable financial system. There are plenty of gray lines in this particular industry that even criminal activities and lawsuits take a while to resolve.
Establishing Trust in Bitcoin
Apart from that, there is no asset backing the value of bitcoin. The cryptocurrency’s value is simply determined by supply and demand, unlike fiat currencies which are based on gold or other precious metals.
However, some say that it is the decentralized nature of bitcoin that gives it a higher potential for more secure transactions. These are logged in a public ledger called blockchain, which keeps track of the transactions between parties.
For businesses though, the use of bitcoin in transactions offers lower costs compared to other forms of payment such as credit or debit cards. There is no need for a middleman financial institution to verify the payments, as the bitcoin can easily be converted to cash. In some countries, bitcoin ATMs have already been installed to make withdrawals from online bitcoin wallets more convenient.
To resolve this issue, governments can come up with regulations to govern the cryptocurrency sphere, although some bitcoin enthusiasts say that this can destroy the viability of the system. Bear in mind, however, that some bitcoin startups have already added some high-profile former government officials to their strategic board in order to figure out how to increase trust in bitcoin and boost its international presence.
