Worried About A Ban? Then You Need Bitcoin More Than You Think
Skeptics often argue that governments will ban Bitcoin when it becomes too important and threatens national sovereignty. At least these critics understand Bitcoin’s importance and the power that state currency monopolies exert over us. What they fail to understand is the power of distributed open-source technologies and the game theory faced by governments when making these decisions. TLDR: Bans are ineffective—they merely cede global technological power to peers. Authoritarian governments are more inclined to attempt regressive regulations. If you live under that type of regime, you need Bitcoin more than you think.
You Cannot Ban Bitcoin—You Can Only Ban Yourself From Bitcoin
Self-regulation is the most important component of distributed open-source technologies like Bitcoin. The bitcoin supply is preprogrammed with a hard limit of 21 million units, blocks are mined every 10 minutes on average, miners are rewarded with new bitcoin, supply growth halves every 4 years, anyone can view and validate transactions by running a node, and no one can be censored from the network if they have internet access and abide by the consensus rules. These principles remain intact no matter what you, I or regulators think. A government can attempt to ban its citizens from using the network, but Bitcoin will continue to run on the internet. The Securities Exchange Commission’s Hester Peirce made this point recently when she concluded that “governments would be foolish to ban Bitcoin.”
Bans Are Ineffective And Potentially Impossible
Even if a government were to ban bitcoin, it would be ineffective. The U.S. government banned alcohol under Prohibition, but liquor was widely available during that time. Bitcoin is not even a physical entity, so how do governments intend to seize it? It is excruciatingly difficult to ban people from using code on the internet. Ask China—they tried to ban Facebook, but Chinese…