Bitcoin has been all over the news for its incredible increases in value. Investors have been buying up Bitcoins like crazy, while others have been selling them as the price reached record new highs (close to $20,000 per Bitcoin), which almost immediately drove the prices down. The volatility in price swings of Bitcoins can be as much as plus or minus 35 percent in a matter of hours.
Many are calling Bitcoins an investment bubble that will eventually pop. Others, such as renowned anti-virus software developer John McAfee, say the opposite is true. He claims that in the next few years the value of Bitcoin will reach over $1 million per coin.
For the increasing value of Bitcoins to continue, this will depend on their continued legal existence, which is not certain. The NextWeb reports that central banks and governments around the world are launching a major coordinated attack to take Bitcoins down.
Illegal Use of Bitcoins
After Bitcoins launched in 2009, they quickly were adopted for use by criminals because they could be traded anonymously. Massive amounts of illegal transactions were conducted on the “dark” web to buy such things as illegal drugs, unregistered guns, and stolen credit card data by using Bitcoins.
Although legitimate uses of Bitcoins have greatly increased in recent years, Bitcoins continue to be used for illegal purposes to this day. One example from 2017 was the distribution by North Korean cyber attackers of the malware called Wannacry. This is ransomware that locks a computer with encryption and then demands a payment in Bitcoins to release the information back to its rightful owner.
Another worrisome thing for governments it that terrorists and their financial supporters have been caught using Bitcoins to transfer funds in support of terrorist activities.
Governments Want To Make Bitcoin Illegal
Many governments and their central banks fear Bitcoin and other cryptocurrencies and they are now taking serious steps to slow or stop the progress of cryptocurrencies as a medium of exchange and as investments.
Forbes says that by using an Initial Coin Offering (ICO) of cryptocurrency, entrepreneurs raised about $2.8 billion since their invention. Those ICOs were almost completely unregulated; however, the regulation crackdown has begun. In China and in South Korea, it is now illegal to raise money by using an ICO of a new cryptocurrency.
Techcrunch reported that the SEC in America arrested the founders of two different companies trying to raise money using an ICO in the USA. The SEC charged them with fraud and selling securities that were not properly registered with the SEC.
In the EU and the UK, Business Insider says that there is a new law in the works to make all traders in Bitcoins and other cryptocurrencies register with the government. All owners will need to declare their ownership positions in cryptocurrencies.
The governments of the world and the central banks are making new legislation and trading exchange barricades to outlaw the uses of cryptocurrency and are forcing those who own them to identify themselves.
These steps are inevitable because the governments feel so threatened about the real risks of criminal activity, terrorism, money laundering, and tax evasion. Do not be surprised if cryptocurrencies are outlawed in certain parts of the world, perhaps eventually there will be attempts to block them almost everywhere.
In the future, all investors in Bitcoin may have to become criminals to continue to use them.