Big governments cannot tolerate Bitcoin, the digital currency that threatens to break their monopoly on printing money, and to manipulate the economy to accommodate the interests of powerful elites.
Sooner or later, they will crush it.
Once, Bitcoin was popular among the "innovators," tech savvy individuals enchanted by the process that created and distributed the exotic currency, and the promise Bitcoin held to solve the ills of a global economy dominated by big governments and powerful central banks. Like the problem of inflation, usually created by central banks to bail out heavily indebted companies and governments.
Somewhere down the road, innovators were joined by "early adopters," enterprising individuals seeing big advantages in the exotic currency— a better hedge against global uncertainties than conventional hedges like gold; a convenient medium of payment worldwide; and a limited supply — 21 million.
Soon, these two groups were joined by a couple of other groups. Like investors who saw cryptocurrencies as a safe haven against the ultra-accommodative policies of central bankers, and the rise of geopolitical tensions in Asia.
Add venture capitalists, who saw Initial Coin Offerings (ICOs) as a process to make quick bucks, and you have a Bitcoin bubble blooming like a colorful tulip in the early 17th century.
Bitcoin has soared from less than twenty dollars in 2012 to close to 4,500 last week. That’s more than a 2000 percent gain. Recently launched Bitcoin Investment Trust Shares (GBTC) has fared even better, soaring 640 percent in less than twelve months.
Meanwhile big governments and central banks are waiting, confining their intervention to regulating ICOs rather than restricting the use of cryptocurrencies as money.
But things may change once cryptocurrencies gain greater acceptance by the "early majority," a larger group of individuals that turns the small demand for these currencies into a cascade, replacing national currencies as a medium of exchange and store of value.
That's when cryptocurrencies will begin breaking the monopolies of governments to collect seigniorage income—the acquisition of commodities and assets by printing money.
Sadly for Bitcoin enthusiasts, the day Bitcoin replaces national currencies will never come. Big governments have the power to crush Bitcoin before Bitcoin crushes them.
Still, the digital currency won't disappear. The technology behind it is far too powerful to be controlled by big government. Bitcoin will return back to its old role: a collectible currency for tech savvy enthusiasts.
https://www.forbes.com/sites/panosmourdoukoutas/2017/08/23/big-governments-will-crush-bitcoin-but-wont-kill-it/#2a3bc2397439
