The U.S government is a huge, bureaucratic nightmare where dreams go to die.
I should know I've worked for them for 9 years.
Ok, ok, not necessarily true but I've taken this quote by generally respected famous person to heart:
"The only thing that saves us from the bureaucracy is its inefficiency."
Eugene J McCarthy
When ever I'm stuck in a bureaucratic process and I ask myself "Why do we need this?" I have to think of this quote:
"The bureaucracy is expanding to meet the needs of the expanding bureaucracy."Civ 5!
Ok, here's my prediction:
- For the sake of example, we'll say that the US deems it illegal.
- A massive sell-off would occur
- Bitcoin would immediately lose at least 90% of its value (there are few who are interested in doing anything illegal).
- Other first-world countries would follow suit.
- Bitcoin would drop another 50% in value (total of 95%).
- It would continue to be used by niche/fringe crowds of libertarians and black market traders.
- Price would very slowly rise after a few months of shrinkage, possibly recovering completely and rising beyond even the current price levels, depending on how much it is used in the underground.
- Bitcoin would never achieve mainstream use at this point.
- Governments might create their own crypto-currencies, but create them in such a way that they still control the issuance of the currency. People would accept this as ok, because the government knows best, right?