Cryptocurrency - cryptographically secure digital tokens such that all transactions involving these tokens are registered securely on a public blockchain.
In other words, it is electronic currency secured by an unalterable public ledger on the internet with automatic transactions. No authority needs to be trusted for your money to be good; your transactions cannot be controlled, and could even be anonymous. This is very good for liberty, but very bad for organized extortion firms, that is, governments.
While productive people want privacy and freedom, rulers (those who control the State) want an enumeration and appraisal of everything their subject's own, and all economic transactions. This intelligence is crucial; without it the rulers cannot maintain their system of organized plunder - their taxation and inflation and cartel-enforcement operations.
Blockchain - a public ledger that is resistent to alteration by use of modern cryptography and a distributed redundant architecture.
Crypto-currency is a threat to the State for these reasons:
- It makes enumeration of its subjects' property more difficult.
- It makes capturing (e.g. spying on) its subjects' trades, transactions, and intereations more difficult.
- As a result it makes taxation/extortion more difficult.
- The main extortion alternative is the fiat money dollar Ponzi scheme, however cryptocurrency use, when/if it becomes popular enough, would kill the fiat regime quickly. Why hold rapidly inflating currency when you can hold one that stores value demonstrably better. At what rate of inflation will people start abandoning the dollar? No one knows, but we do know from history that once it starts the dollar will die quickly.
Before 2020 the main strategy for most States was to repress cryptocurrencies. As Bitcoin became popular, and firms like Etherium developed the smart-contract idea, even mainstream financial institutions were looking into blockchain tech and cryptocurrency. The current strategy for States is to adopt digital currency, but in a form more conducive to their aims. They are trying to sell "trust your government" over a trustless unalterable blockchain. The blockchain makes a central authority obsolete.
However, the rulers have a couple of things going for them: (a) habituation to servitude, and (b) current near-monopoly control of the monetary system. In short, people are accustomed to using dollars, and from an end-user perspective, a CBDC (Central Bank Digital Currency) would feel a lot like a cryptocurrency. Most people do not value their privacy until it is gone. The US rulers currently have the largest market share by far in currency in the US.
We know the dollar will die, but can only speculate about when or how.
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