Aug 15, 2020 10:47 AM EDT
4 Myths About Cryptocurrencies Being Pushed By Governments
It is no secret that the decentralized and autonomous nature of cryptocurrencies presents a number of challenges for governments. Briefly, it seeks to free the global financial, banking and economic sectors from the control of national governments and financial institutions.
This is why governments and international institutions have left no stone unturned to attack cryptocurrencies and the technology behind it. In addition to traditional national governments, major financial bodies, banks and trading bodies have also been unequivocal in their opposition.
In this article, we are going to list four myths frequently put forward by governments to discredit cryptocurrencies in general and Bitcoin in particular. However, before we get to the myths, let us first look at why governments and institutions fear the power of a decentralized digital currency.
Why Governments and Formal Institutions Hate Cryptocurrencies?
Do you know the kind of money governments earn simply by taking commissions and transaction fees? We are talking about trillions of dollars. Imagine if they do not have access to such resources. What do you think they will end up doing?
Every government wants to control the lives of its citizenry in different ways. Exercising financial control is one of the biggest ways governments keep you in check. It collects taxes, monitors your payments and sees what you are doing with your money.
Without such high-handed intervention and control, individuals would no longer listen to their governments and higher authorities. The decentralized nature of the digital currency makes it free from taxes, inflation, and governmental control. In many ways, this is a direct attack on the sovereignty of the government.
4 Myths Governments promote to discredit Cryptocurrencies: The List
- Cryptocurrencies are used by Criminal Elements-
Many governments have created extensive documentation stating how anti-social elements use Bitcoins and other cryptos as it is not traceable. However, this just goes to show their little and inferior knowledge on the subject.
Corrupt, criminal and anti-social activities can also be done with traditional currencies all over the world. In fact, crypto used in criminal activities does not even amount to 1% of the total illegal activities, which are funded by normal currency.
- Bitcoin is a scam to take away money from unsuspecting people-
When governments are not able to prove how crypto is bad, they say that it is a scam masterminded by some corrupt people to rob normal citizens. This might sound desperate, but the government goes out of its way to organize press conferences to educate people about staying away.
Many normal people, most of who are retail investors have been able to make millions of dollars by investing in Bitcoins. Bitcoin is not a scam; rather it is an exciting new investment opportunity, which seeks to redefine the way global financial capital works.
- Crypto Transactions are Untraceable-
Governments feel that since there is no intermediary like a bank to sign off the transaction between two parties, the transaction is untraceable. However, all transactions done on Blockchain are recorded and exist forever.
Yes, the transactions do not require consent and are done between two parties, yet if the government wants to know, it can easily access the transactions. This means that crypto transactions are traceable in nature, contrary to what the government says it is.
- You can easily Evade Taxes with Cryptocurrencies-
While the original idea of cryptocurrencies makes them autonomous and decentralized, it would be too far-fetched to state that it can be used to evade taxes. Rather than engaging with the technology and seeing how it can be regulated, governments are out there to discredit it.
In many countries, cryptocurrencies fall under financial products and services like mutual funds. In other places, they are considered as commodities and securities. Governments are themselves confused about the exact nature of how to bring cryptocurrencies under the ambit of taxation.
There is no doubt that governments all over the world see cryptocurrencies as a threat. However, countries like Canada, Germany and Japan have started formalizing the adoption of cryptocurrencies in their economies. Investments in Bitcoin are hitting an all-time high with people flocking to guarantee high return crypto trading platforms like 1K Daily Profit.
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