Some investors see cryptocurrency as a great opportunity to eliminate economic disparity in society and others see it as a hedge against inflation. Many others just want to capitalise on the digital currency while it delivers decent returns on investments. With the rapid rise of cryptocurrency, the debate on regulating it is also gaining traction. Authorities around the world are contemplating measures on how to manage the disruption it may cause, and yet its market and user base are growing steadily. Earlier this week, billionaire entrepreneur Elon Musk, a staunch backer of these virtual coins, warned governments against trying to “destroy” cryptocurrency. But he conceded they can slow down its progress.
Cryptocurrency fundamentally is aimed at reducing the power of a centralised government, said Musk, adding that is why “they don’t like” it. The Tesla and SpaceX founder’s statement came amidst a crackdown by China on the mining of cryptocurrency, which is blamed for the current electricity shortage in the country. There is also a consensus that cryptocurrency has the potential to upend the existing financial system, but how true is Musk in saying governments now can’t destroy cryptocurrency.
Given the choices, some countries — like El Salvador — adopted cryptocurrency as a legal tender, while some others are contemplating launching a crypto coin of their own, which national regulators can control or have some oversight.
At one level he appears to be correct. The crypto world is now more than a decade old since Bitcoin, the first virtual coin, came into existence in 2009. And Bitcoin alone has grown exponentially in these years to gain a market capitalisation of $1 trillion. As a whole, the crypto world’s market capitalisation has surpassed $2 trillion. Add to that the growing number of users who have invested real-world money into it.
Even if countries like China try to crack down, people are likely to find ways to enter the lucrative but highly volatile market. This is because the whole system is online, that is all transactions and processes work in tandem on the Internet, using simple gadgets like mobile phones. It would be a difficult task for any government to completely wipe out the crypto trade.
Musk, one of the sharpest minds in the tech business, likely understands this far better than many others and must have weighed in the challenge it would pose to ban cryptocurrency.