Bitcoin and other virtual currencies offer tremendous potential in terms of creating additional jobs, wealth and economic stability all over the world; it should come as no surprise then to find out these are three of the key reasons why government officials are not too keen on Bitcoin becoming a part of their economy. After all, if wealth would be distributed on an even playing field and decentralization is the new way of life, what do we need governments for?
The Pros and Cons of Bitcoin as a Currency
People who are very passionate about Bitcoin and other virtual currencies will often see the positive sides while turning a blind eye to potential drawbacks. First and foremost, Bitcoin is a whole new level of financial technology, unlike anything the world has experienced up until this point.
Human nature will automatically try to avoid any drastic changes, as our species does not handle abrupt adjustments all that well. Granted, there will always be those who remain ignorant and oppose change at every turn; but over time, more and more people will explore the potential of drastic transformations. Bitcoin is no exception in this regard.
A proper regulatory framework for Bitcoin could do a lot of good and also cause a lot of harm, depending on how the rules are defined and enforced. BitLicense is a prime example of how Bitcoin regulation should not be handled, but that’s a different matter entirely. There are a lot of aspects about Bitcoin that are difficult to grasp for most people, especially legislators, regulators and government officials.
The reason for that is pretty simple: Bitcoin is the first borderless form of “currency” that has managed to gain traction all over the world. Even in remote African regions, the term Bitcoin is beknown to members of the local population. Low transaction fees and near-instant transfers of funds from one end of the world to the next are what makes Bitcoin a hot topic.
Playing devil’s advocate for a moment though, Bitcoin is not that consumer-friendly to novice users. Granted, a novice user would not have to know everything about Bitcoin to get started, but this virtual currency is not backed by tangible goods. While this is a positive aspect of Bitcoin, many people are afraid to embrace a virtual payment method that is based on age-old principle of supply and demand.
Judging by the current Bitcoin price, there does not seem to be a high demand for the number of Bitcoins in circulation right now. Nothing could be further from the truth though, as Bitcoin is seeing high trading volumes across Asia, North America and Europe on a daily basis. Even regions such as South America and the Middle East are warming up to the idea of using Bitcoin and blockchain technology.
Generating Bitcoins, on the other hand, can only be done through an intensive process called “mining”. Due to mounting electricity costs and Bitcoin mining hardware being obnoxiously loud while generating tons of heat, mining Bitcoin at home has become all but impossible. Right now, most Bitcoin mining takes place in data centers, which seem to be designed to handle this kind of computational power and electricity costs.
It’s Not Too Late to Get Involved in Bitcoin
One of the most often heard remarks from people not involved in virtual currencies is how it is (according to them) too late to get involved with Bitcoin. Truth be told, there has never been a more opportune time to enter the Bitcoin ecosystem, regardless of whether or not they are planning to make a financial investment.
Bitcoin is about so much more than just the monetary aspect, as the ideology and underlying technology offer unlimited possibilities for the future. It is important to remember that no one is forced to invest in Bitcoin to become a part of the community. Some of the most prominent figures in the industry have never invested a single cent in Bitcoin, but rather earned the wealth they possess right now.
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