$ (or any govt issued currency) is legal tender. It has the full force of the US govt and all it has all instruments of power behind it. Including the power to tax, enforce contracts, regulate, make things illegal etc. Sovereign nations will doubt a lot before making BTC legal tender or even relevant as a currency beyond a point, since the foundations of BTC makes it anti-sovereign from the purview of a nation-state.
BTC has an incredible algorithm, a skilled decentralized developer community and a strong evangelizing community behind it. But that’s all of it, as of now. In the event of a dispute between 2 parties, who is going to adjudicate, enforce and honor contracts that is based on Bitcoin? How will force be brought in, in case the situation demands it?
All laws depend on the threat of violence to be enforced.
Contracts only matter insofar as they can be enforced. Without force/violence behind them, a contract is just a piece of paper. This includes “constitutions” and “charters of rights”.
Unless a govt co-adopts bitcoin, the above scenarios cannot effectively be dealt with. But, as of now, I cannot image how a sovereign nation can co-adopt Bitcoin. Without co-adoption it cannot be a reliable mainstream currency.
This is the reason why China banned it completely since it goes against what the CCP stands for. India also is tilting towards strong regulation because of the anti-sovereign nature of BTC in the context of the state.
El Salvador took the bold step of co-adopting BTC and will perhaps serve as the blueprint for others. But I doubt if BTC can make it without the larger more powerful nations truly co-adopting it.
If the US also gets to a stage where it strongly regulates Bitcoin; then Bitcoin will not fulfill it's original vision. Here and there, leaders in the US have already started criticizing BTC citing how it'll destabilize the economy, is bad for the environment. It's only a matter of time when its cited as a threat to national security.
What are the holes in my thought process, what am I missing here? How and why would BTC overcome these hurdles?
No comments:
Post a Comment