[2017-12-05] Threats That Can Sink Bitcoin

[iamTom123]

We believe that the greatest threat is regulation aimed to kill Bitcoin. Several governments across the world have clamped down on exchanges, some halting trading altogether. Others have gone on to outright ban the use of Bitcoin. Sudden government actions in major Bitcoin trading hubs stand to disrupt the market, with the potential to severely affect the utility of bitcoin and its value.

However, banning bitcoin in any democratic country will be extremely difficult. Bitcoin's decentralized approach to currency is very people-centric and as it becomes more mainstream, more people will understand its benefit. Any democratic government that bans something so beneficial for the people risks losing power.

Another threat is the community disagreements and conflicts that result from this -- such as too many hard forks -- also have the potential to create dangerous turbulence in the marketplace. While nothing severe has happened just yet, this possibility becomes greater as the market gains momentum and the stakes become higher.

"Bitcoin has found a way to overcome many obstacles in the past," said Pitti. "The industry learned from Mt. Gox and wallets and exchanges have dramatically stepped up their security game." But such a raid on the exchanges with hackers growing craftier and with those controlling the exchanges often operating without significant checks and balances in place. The price of Bitcoin has been climbing for quite some time now and any black swan event could make people, especially those who are new to the cryptocurrency space, quickly lose their confidence in it and make the price drop rapidly.

"The biggest issue that Bitcoin is currently facing is related to scalability," Karki said. "The price and delay in transactions are making it difficult to actually use. Some people seem to prefer this, it portrays Bitcoin as a good store of value in their minds, while others would like to see it have some utility."

This is a market used to double digit price swings both upwards and downwards and holding can mostly be considered the most effective action to take in turbulent times. Though some insist Bitcoin is a bubble ready to burst at any moment, some are ready to see Bitcoin soar to $40,000 and beyond, Chicken Littles be damned. Taken from this source...

Bitcoin has been surging in value for weeks now but there remains to be big challenges that can soon be threats to it if not given appropriate solutions and remedies. I am now wondering if the decentralized nature of Bitcoin has not become a big hindrance for swift resolutions of the problems affecting it a long time. It is as if Bitcoin could not decide on what to do and what are the solutions that should be adopted because there is no single person who can decide for it. Well, as we realized now there are advantages and disadvantages with the decentralized nature of cryptocurrency but we know that at the end of the day the advantages will always win over.

[hatshepsut93]

However, banning bitcoin in any democratic country will be extremely difficult. Bitcoin's decentralized approach to currency is very people-centric and as it becomes more mainstream, more people will understand its benefit. Any democratic government that bans something so beneficial for the people risks losing power.

Banning bitcoin is pretty easy even in democratic country, because Bitcoin users are just a tiny minority and a lot of people haven't even heard about it. Take for example weed - 52% of Americans over 18 have tried it at least once, yet the government wages war on it. And although it's impossible to kill Bitcoin, they can certainly hurt it - if they will go after miners, which is very easy to do with their giant power consumption, we will lose the hashpower that secures current value of transactions in blocks, and they can even turn that hashpower against us if they will use seized mines to attack the network. ISP's might try to block or slow down all Bitcoin-related traffic, so we will have to use Tor, which will have negative impact on block propagation speed. Buying at selling Bitcoin would also be pretty hard if it will be outlawed, meaning less liquidity. To sum it up, lets just hope that it won't be outlawed by any major government.

[digodk]

Banning bitcoin is pretty easy even in democratic country, because Bitcoin users are just a tiny minority and a lot of people haven't even heard about it. Take for example weed - 52% of Americans over 18 have tried it at least once, yet the government wages war on it. And although it's impossible to kill Bitcoin, they can certainly hurt it - if they will go after miners, which is very easy to do with their giant power consumption, we will lose the hashpower that secures current value of transactions in blocks, and they can even turn that hashpower against us if they will use seized mines to attack the network. ISP's might try to block or slow down all Bitcoin-related traffic, so we will have to use Tor, which will have negative impact on block propagation speed. Buying at selling Bitcoin would also be pretty hard if it will be outlawed, meaning less liquidity. To sum it up, lets just hope that it won't be outlawed by any major government.

I second your concerns about what could be done regarding bitcoin in most democratic countries, although I think if a government behaved likt that it would anything but democratic. It seems to me Venezuela could do that in the near future, given the massive demand for bitcoin in the country and the plans to launch a state coin soon.

But overall, I think we're seeing a movement towards legitimization of the network (which could always have its downsides).

[Guardian.P]

The reason for such fluctuations bitcoin is the regulation of the government. I mean the prohibition of bitcoin in different countries. This also reduces the rate of bitcoin. Imagine if the government did not prohibit, what would be the course, as though the price of bitcoin was growing. They themselves rocked the boat and say that it is not stable

[Lucius]

Some of the largest countries in the world certainly have the power to inflict serious damage to BTC,only if they decide to do that.Take for example China,they ban cryptocurrency trading and this is not have almost no effect(maybe the price would be bigger if they operate) on BTC in general,but they also have option to ban mining, and this would seriously damage BTC at least for a short period of time.

When it comes to controlling finance,some government would be in the case of feeling threatened too much could join in a joint venture to "sink" BTC.In terms of value BTC is now around 200$ billion,and USA military budget for next year is something around 700$ billion.So they have enough money,power and necessary infrastructure if they want to go against BTC.

[sindikat]

However, banning bitcoin in any democratic country will be extremely difficult. Bitcoin's decentralized approach to currency is very people-centric and as it becomes more mainstream, more people will understand its benefit. Any democratic government that bans something so beneficial for the people risks losing power.

Banning bitcoin is pretty easy even in democratic country, because Bitcoin users are just a tiny minority and a lot of people haven't even heard about it. Take for example weed - 52% of Americans over 18 have tried it at least once, yet the government wages war on it. And although it's impossible to kill Bitcoin, they can certainly hurt it - if they will go after miners, which is very easy to do with their giant power consumption, we will lose the hashpower that secures current value of transactions in blocks, and they can even turn that hashpower against us if they will use seized mines to attack the network. ISP's might try to block or slow down all Bitcoin-related traffic, so we will have to use Tor, which will have negative impact on block propagation speed. Buying at selling Bitcoin would also be pretty hard if it will be outlawed, meaning less liquidity. To sum it up, lets just hope that it won't be outlawed by any major government.

The speed of transaction confirmation can be easily adjusted block size. Therefore, the use of tor does not affect the fate of bitcoin. Conversion of bitcoin to Fiat can be difficult. So I have high hopes that will be soon established trade with bitcoins. This may not prohibit any government. Even new goods can be exchanged as second hand bitcoins.

[1Referee]

The reason for such fluctuations bitcoin is the regulation of the government. I mean the prohibition of bitcoin in different countries. This also reduces the rate of bitcoin.

No. If we had to believe people, China was the main reason for Bitcoin to be at current levels, and if they would exit the game (they partially did), it would be catastrophic for Bitcoin. Look at how the market has gone up badly after China's partial exit. Countries prohibiting Bitcoin are nothing more than obstacles. If these obstacles take care of themselves, in the way that they exit this market, it only helps steering this market to new record highs. Bitcoin's adoption is now coming from basically all places in the word. It's not one country that we depend on, which is a great benefit. If the growth was centered at just one country, and that country would prohibit Bitcoin, that would be a bad thing, but this is something that is not much of a concern to us right now.

[Taki]

However, banning bitcoin in any democratic country will be extremely difficult. Bitcoin's decentralized approach to currency is very people-centric and as it becomes more mainstream, more people will understand its benefit. Any democratic government that bans something so beneficial for the people risks losing power.

Banning bitcoin is pretty easy even in democratic country, because Bitcoin users are just a tiny minority and a lot of people haven't even heard about it. Take for example weed - 52% of Americans over 18 have tried it at least once, yet the government wages war on it. And although it's impossible to kill Bitcoin, they can certainly hurt it - if they will go after miners, which is very easy to do with their giant power consumption, we will lose the hashpower that secures current value of transactions in blocks, and they can even turn that hashpower against us if they will use seized mines to attack the network. ISP's might try to block or slow down all Bitcoin-related traffic, so we will have to use Tor, which will have negative impact on block propagation speed. Buying at selling Bitcoin would also be pretty hard if it will be outlawed, meaning less liquidity. To sum it up, lets just hope that it won't be outlawed by any major government.

That's correct. A country can call itself as democratic one, but we all know that the government is usually follow the interests of the elite and if they will count crypto currencies as something dangerous or not religious (just like some Turkish imam said few days ago) - bitcoin is going to be banned. I think bitcoin can die for a concrete country only, but not for the whole world, no way. There always will be bitcoin welcome country which understands all the advantages of crypto currencies.

[digodk]

That's correct. A country can call itself as democratic one, but we all know that the government is usually follow the interests of the elite and if they will count crypto currencies as something dangerous or not religious (just like some Turkish imam said few days ago) - bitcoin is going to be banned. I think bitcoin can die for a concrete country only, but not for the whole world, no way. There always will be bitcoin welcome country which understands all the advantages of crypto currencies.

Japan, South Korea and Canada are the ones off the top of my head.
I really wish most of these countries would focus on legalize bitcoin rather than regulate it, but I think that's too much to ask.

[Palmerson]

That's correct. A country can call itself as democratic one, but we all know that the government is usually follow the interests of the elite and if they will count crypto currencies as something dangerous or not religious (just like some Turkish imam said few days ago) - bitcoin is going to be banned. I think bitcoin can die for a concrete country only, but not for the whole world, no way. There always will be bitcoin welcome country which understands all the advantages of crypto currencies.

Japan, South Korea and Canada are the ones off the top of my head.
I really wish most of these countries would focus on legalize bitcoin rather than regulate it, but I think that's too much to ask.

You seriously want to the state to regulate bitcoin? I think it will be the end of bitcoin. Think about it. Bitcoin became popular because it offers people freedom. States can't regulate financial flows. They can only steal money from people and profit at our expense. I am against any form of state intervention in bitcoin.

[darkangel11]

All countries will never ban BTC because the world has never been fighting for the same cause as one. There were always differences and they will be there till the end of times.
If your country bans BTC just move to another one and eventually they'll see it wasn't worth it. Governments who decide to ban BTC will be losing the income they'd get from taxes, making people leave the country and pay taxes abroad. There's really not much to gain from banning it.

[Qartersa]

We believe that the greatest threat is regulation aimed to kill Bitcoin. Several governments across the world have clamped down on exchanges, some halting trading altogether. Others have gone on to outright ban the use of Bitcoin. Sudden government actions in major Bitcoin trading hubs stand to disrupt the market, with the potential to severely affect the utility of bitcoin and its value.

However, banning bitcoin in any democratic country will be extremely difficult. Bitcoin's decentralized approach to currency is very people-centric and as it becomes more mainstream, more people will understand its benefit. Any democratic government that bans something so beneficial for the people risks losing power.

Another threat is the community disagreements and conflicts that result from this -- such as too many hard forks -- also have the potential to create dangerous turbulence in the marketplace. While nothing severe has happened just yet, this possibility becomes greater as the market gains momentum and the stakes become higher.

"Bitcoin has found a way to overcome many obstacles in the past," said Pitti. "The industry learned from Mt. Gox and wallets and exchanges have dramatically stepped up their security game." But such a raid on the exchanges with hackers growing craftier and with those controlling the exchanges often operating without significant checks and balances in place. The price of Bitcoin has been climbing for quite some time now and any black swan event could make people, especially those who are new to the cryptocurrency space, quickly lose their confidence in it and make the price drop rapidly.

"The biggest issue that Bitcoin is currently facing is related to scalability," Karki said. "The price and delay in transactions are making it difficult to actually use. Some people seem to prefer this, it portrays Bitcoin as a good store of value in their minds, while others would like to see it have some utility."

This is a market used to double digit price swings both upwards and downwards and holding can mostly be considered the most effective action to take in turbulent times. Though some insist Bitcoin is a bubble ready to burst at any moment, some are ready to see Bitcoin soar to $40,000 and beyond, Chicken Littles be damned. Taken from this source...

Bitcoin has been surging in value for weeks now but there remains to be big challenges that can soon be threats to it if not given appropriate solutions and remedies. I am now wondering if the decentralized nature of Bitcoin has not become a big hindrance for swift resolutions of the problems affecting it a long time. It is as if Bitcoin could not decide on what to do and what are the solutions that should be adopted because there is no single person who can decide for it. Well, as we realized now there are advantages and disadvantages with the decentralized nature of cryptocurrency but we know that at the end of the day the advantages will always win over.

I agree. There are definitely ways to eliminate Bitcoin. However, how can you stop something when governments are too afraid to face the next big thing? They cannot acquiesce for too long, you know. They have to step up and do something to either accept it or combat it.

Yes, you may say governments can effectively ban it, its scalability causes it to decline, and others of similar nature, but the thing is, a number of people continue to believe on it and invest on it because it is their HOPELESS way to fight financial crises given the economic situation nowadays. These people have seen success stories and they admittedly want to follow the success of others on the same field.

[vit05]

China mess was the prove that trying to baning Bitcoin will not be so easy. And every day Cryptocurrency marketing become bigger and stronger so it will be very hard to government just kill with a pen. They will need to coordinate a big agreement and will take months. Right now it is impossible.

[J. Cooper]

China mess was the prove that trying to baning Bitcoin will not be so easy. And every day Cryptocurrency marketing become bigger and stronger so it will be very hard to government just kill with a pen. They will need to coordinate a big agreement and will take months. Right now it is impossible.

You can't simply ban bitcoin, because it's peer to peer you would have to shut down every single node in the world. That's practically impossible, unless governments globally would start disregarding  international borders and start violating legislation surrouding privacy. However there's one way for the governments to fight bitoin and that would be to turn off the internet, but I deem that scenario highly unlikely.

[digodk]

You seriously want to the state to regulate bitcoin? I think it will be the end of bitcoin. Think about it. Bitcoin became popular because it offers people freedom. States can't regulate financial flows. They can only steal money from people and profit at our expense. I am against any form of state intervention in bitcoin.

I'm sorry, it seems i have not expressed myself correctly. I do not wish for governments to regulate, as in create laws and taxes and rules for bitcoin. I wish for them to say in an official capacity "That's ok, you can use bitcoin (or altcoins), we're not going after you."
That would bring much more publich attention to the system and with it both money and minds willing to help to improve to protocol.

I, too, believe that governments messing around with bitcoin is not a good idea.

[Carlton Banks]

That's correct. A country can call itself as democratic one, but we all know that the government is usually follow the interests of the elite and if they will count crypto currencies as something dangerous or not religious (just like some Turkish imam said few days ago) - bitcoin is going to be banned. I think bitcoin can die for a concrete country only, but not for the whole world, no way. There always will be bitcoin welcome country which understands all the advantages of crypto currencies.

Japan, South Korea and Canada are the ones off the top of my head.
I really wish most of these countries would focus on legalize bitcoin rather than regulate it, but I think that's too much to ask.

Maybe Satoshi too should have gone down on bended knee to beg for permission to do something innovative?

You've missed the point completely. Bittorrent was never illegalised because it would have been too embarrassing to governments to be seen as so powerless. Instead, torrent sites hosting copyrighted content were chased. Ineffectively (I just checked, major sites such as isohunt.to and thepiratebay.org are still up).

Meanwhile, intelligent artists are coming up with new business models to fund their careers instead of chasing the (now) failed copyright model. Bitcoin will do to taxes what Bittorrent did to copyright, and there's nothing any government can ultimately do about it (except make themselves even more unpopular during the process).


So sure, maybe select countries will ban Bitcoin or mining. Some won't. And Bitcoin will continue to be mined and transacted from countries in which it's banned, just as it is now in Venezuela where both mining and transacting Bitcoin is illegal.

I do not wish for governments to regulate, as in create laws and taxes and rules for bitcoin. I wish for them to say in an official capacity "That's ok, you can use bitcoin (or altcoins), we're not going after you."

You're still missing the point.

Think about it logically: where are the resources going to come from to actually stop people using Bitcoin and other cryptocurrencies? It's an impossible task, and it's even more difficult than the previous impossible problems governments set out to solve, due to the resources required to attempt effectiveness.

They have little choice but to roll over, cryptocurrency represents a genuine change in the power balance between governments and everyday people.

China was the main reason for Bitcoin to be at current levels, and if they would exit the game (they partially did), it would be catastrophic for Bitcoin. Look at how the market has gone up badly after China's partial exit. Countries prohibiting Bitcoin are nothing more than obstacles.

Precisely. If exchange sites being banned in the most totalitarian major economy cannot affect the Bitcoin price, I expect nothing can. There is an effective counter measure for just about any attack government agencies can attempt, and each failed attack will only make Bitcoin, and it's demand, stronger.

[augmentedinvestor]

If cryptokittens atomic swaps over to Bitcoin blockchain & brings down the entire network...

[RedX]

Wait a minute, I think I have heard this somewhere? Right! Hundreds of times! This is the same people that is against bitcoin and hoping that they would be successful when they spread these FUD articles. Bitcoin has been there, China and and other countries banning it and bubble again and again but look where we are now.

[MoonJeina]

That is true , the major problem going on with Bitcoin these days is the hustle that is being created by the unauthorized and delayed transactions . There are a major number of people complaining about it . But obviously , this is because of the sudden shoot of price and everybody wants to withdraw now which is leading to the crowdy situation for miners .
Even though Bitcoin has faced every obstacle till now the major threat comes if the major countries tries to ban Bitcoin . To stop that there is a major need to increase the participants and investors in bitcoin so that at the time of crisis there can be a good opposition to the stupid decisions of banning and regulating Bitcoin.                                                                         

[cynical]

interesting topic, the only real threat in my opinion to bitcoin is no internet.
anything else can be overcome.
if the exchanges are closed and banned there will still be a way particularly for existing bitcoin users, getting into it might be harder.
something like localbitcoins and similar would flourish.
Look at the darkweb, it is still there.