Who opposes Crypto? And why?
Obstacles from the get-go
Since the day of the creation, cryptocurrencies have faced considerable opposition. The reasons for distrust varied from volatility, mystery, lack of understanding to simply – danger that is generated towards the well-established business world. The main detractors of the concept of crypto are 2 entities: Banks and Governments. Both usually fiercely oppose this new technology and consider currencies like; Bitcoin to be the “bubble” that will eventually burst.
Although it’s almost impossible to speculate on the future of blockchain and cryptocurrencies, it’s possible to conclude the reasons behind strong opposition, coming from governments and banks towards crypto.
The logic of government
First and foremost, this is a question of who controls the game. Governments gave birth to FIAT currencies and they direct central banks to issue or destroy money out of nothing just by employing “monetary policy”. Governments have tremendous possibilities of authority over all the processes within their country, all thanks to monetary units. All proceedings of cash can be controlled, like: Transfers, tracking, profits, names, personal data and many more. Deriving from that information it’s easier to impose a more detailed taxation system and seize most criminal activities such as; money laundering and illegal businesses. This is a genuine issue that blockchain system has to address to be seriously considered in the future stages of implementation.
With decentralized cryptocurrencies, all this would be virtually impossible, because no entity in the world can seize control over currencies like Ethereum and Bitcoin. Blockchain is the system of the society, working mostly due to enthusiasm and mutual cooperation. If done correctly, Cryptocurrencies could become the keys to total economic freedom.
The reasons of banks
Although almost all the “negative” factors mentioned above could fit the description, banks have a slightly more diversified set of reasons behind their rivalry towards blockchain technology. If we look at the big picture, Bitcoin’s market cap is almost at 140 billion US Dollars, which is already almost the same as America’s biggest bank, JP Morgan Chase. The growth of crypto is seriously worrying established institutions, and they perceive this new alternative as a threat.
Aside from the factor of decentralization, loss of control over financial power and inability to track transactions, banks also have to deal with lower costs and faster speeds, that cryptocurrencies bring to the table. International transfers of traditional financial institutions are quite pricey compared to blockchain technology, which are considerably cheaper and sometimes even free of cost. The speed of crypto transactions is much faster compared to the banks. What banks achieve in hours and days, blockchain can do in a matter of minutes. Last, but not the least is the simple fact that bankers could be looking at a potentially massive recession of jobs in the near future. Blockchain can procure an ideal system that could possibly cut the need for the middlemen and various different operations that usually take place in financial institutions, in term leading to banks becoming almost redundant.
A realistic threat
Blockchain and its cryptocurrencies are the new technology that have the potential to completely disrupt everything we know and are used to about the financial industry. Although still in the early developmental stages, crypto solutions have the ability to improve the world we live in. With more control and freedom transferred to the ordinary people, governments and banks could lose their influence over the finances of the general population. If done correctly, blockchain has the potential to change the world, and that’s the reason why at this stage it has so many detractors and opposition. Simple fact of history is that new and better technology always finds a way to overtake the old and dated concepts.