BTCManager Logo with clear background. Orange and white font.

BITCOIN PRICE: 6,689.88     HIGH: 6,755.14     LOW: 6,340.00

=
BTCManager.com
advertisement
advertisement
advertisement
#TRENDING STORIES
Next Event

World Blockchain Roadshow 2018 – Asia and Europe • June 28 - August 18, 2018

That is the story of wbrshow.idacb.com — where you will find best investors from most popular areas. We picked up…

Click for more details
advertisement
BTCManager.com

What Ways Might Governments Undermine Bitcoin?

by

What Ways Might Governments Undermine Bitcoin?

Erik Townsend, host of the MacroVoices podcast and manager of the hedge fund Fourth Turning Capital Management, LLC, spoke with CEO of Hedgeye Keith McCullough regarding cryptocurrencies and their relationship with governments on the whole.

Roadblocks and Skepticism

One of the most significant quotes that came from this conversation was “The bitcoin guys invented the technology. The government is going to steal it.”

After taking some time to explain what bitcoin is and how blockchain technology works, the finance duo moved on to addressing some of the key issues that appear to be the most significant roadblocks for the industry going forward.

Townsend argued that an astonishing amount of computer resources are being wasted around the world through the process of mining transactions. Unfortunately, these environmental claims are valid as some data indicates that the bitcoin network currently uses more electricity than entire countries.

Precisely, Singapore has a population of around 5.6 million, and their total energy consumption is less than what is used for bitcoin mining.

Second, Townsend is on the ball in calling out the network’s scalability issues. It is for these reasons specifically that the financial pundit points out that new technology is coming down the line that will trump blockchain due to the massive energy demands it has.

He then went on to address the argument that many in the bitcoin community claim that the government wouldn’t allow bitcoin to exist if it posed a threat to their respective fiat currency systems.

Townsend’s retorted that governments are allowing this engineering to be done by those in the community continually and eventually the government will come in and “steal it.” Further, believes that this technology will ultimately be used by governments to have comprehensive control over global transactions.

advertisement

Redefining Governmental Financial Control

The real goal, according to Townsend, should be the creation of a digital currency that can take over the US dollar as the new global reserve currency. It would not be the bank in your pocket as other evangelists have touted, but merely another draconian scheme by government bodies to control financial freedoms.

Bitcoin and other virtual currencies, once in the hands of governments, allows them to efficiently “audit, seize and claw back any transaction.” Townsend has been calling this worldwide digital currency “Orwell” and believes that all transactions would be identified using country codes and social security numbers.

Finally, the talk show host envisages digital currencies becoming something they were trying to avoid when they were created, morphing into centralized currencies that are controlled by governments.

The points presented are interesting, if not incredibly pessimistic. Townsend does manage to even other theories of an impending bubble and Ponzi schemes. In many ways, his criticism is refreshing and legitimate as further research already indicates our favorite decentralized systems aren’t actually that decentralized.

While a lot of people are anti-cryptocurrency, most of them do acknowledge the critical role that blockchain technology will have on our day-to-day lives, especially how transactions are processed.

Join our Telegram Channel!