Are we headed for a crypto war?

As bitcoin and other cryptocurrencies look to challenge economy as we know it, governments are preparing to fight back

So what’s this about a crypto war?

Ah, you’ve seen the tweets, the Reddit discourse and the YouTube videos too, then? It’s a tale of two sides who disagree with each other and want the other gone. Montagues and Capulets, Arsenal and Tottenham. You get the idea. In the old corner, we have governments (and centralised banks like the Bank of England) who see crypto as a threat to their currency, central banks, and the ways in which the economy has existed for centuries (via them). In the new corner, there’s crypto, the hyper-secure, decentralised answer that (in theory) gives people the power. Let’s get ready to rumble.

Where’s this battle going to take place?

Online mainly, you’d imagine. But also in politics and general debate everywhere, from boardrooms to barstools. The thing is, right, many people want digitalised economies. They’re convenient and secure. Governments are well aware of this and they know a switch needs to happen in future, but they want to be in charge of it. Why let a coin that fluctuates and has no real owner like bitcoin take over? We can just make a digital quid that’s worth an IRL quid and controlled by us” is essentially what they’re saying. So they’re playing catch-up by creating their own central bank digital currencies (CBDC). This might be a useful compromise for some people, but for many, the entire point of cryptocurrency is that it is decentralised. Neither side will back off, so wherever that clashing of heads comes into play (from pubs to international borders) is where the scrap will go down.

Who will be involved?

Everyone. Digital currency will become the norm eventually and we will all be using it, especially in developed countries. It’s the specific form that digital currencies will take which is being debated here. The split will be between countries and within countries. The former can be seen in places such as El Salvador, Ukraine and Panama, where governments have either made or are looking into making bitcoin legal tender. The latter will be between individuals and perhaps companies, groups of people disagreeing on what they want for their country: crypto or centralised digital currencies. In essence, it’s a preservation of power against a power to the people” movement. For some, it’s just a new goldmine to tap. The most powerful countries are likely to want to regulate or avoid using cryptocurrencies, instead opting for virtual versions of their current currencies; developing countries will be backing bitcoin, ethereum and the rest.

Will this really happen?

We’re already seeing this battle play out. China has had the most vocal crypto crackdown so far. In the past few months, they’ve been the most active of any country when it comes to shutting down companies and miners (which is easier said than done). Of course, as with most countries that oppose bitcoin, they’ve cited environmental concerns as part of why they are doing this. While bitcoin uses up a lot of energy, for the most part, this is just a convenient excuse for these governments as they look to keep control of their economies. At the same time, El Salvador has announced it’s looking at eco ways to mine bitcoin. However, while crypto is in places bad for the environment, many coins such as SoalrCoin are actually beneficial for the planet, and central banks are vastly more polluting than Bitcoin”, according to reports. So it seems the environment concerns’ are secondary to the financial aspects. Again, the environment comes second to the financial aspects.

Will it get ugly?

Where crypto isn’t wanted, it’s more likely to be a cat and mouse of miners finding secret operations and the government shutting them down than anything more war”-like. In the US, congress introduced 18 bills around cryptocurrency recently, many of which are set to regulate how crypto is used in the States, both for crypto exchanges and miners. As with other countries, there was also talk of introducing a digital dollar. When it comes to friction between countries, not much is happening as of yet, but there’s a fair chance that they’ll be obstacles if nearly half the planet wants one thing and the other half doesn’t. However, for most people, the concept of digital currencies is a very new field, so while we know where certain groups and governments generally stand, it’s impossible to predict what will come of it all further down the line, as that’ll depend on what us regular people have to say. It’s a new era for crypto, however you look at it.

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