The Coin Wars

coin wars

It’s on. The conflict of our generation has been sparked, and while the fire smoulders almost invisibly, this is going to be huge.

I’m talking about the recent Bitcoin seizure by the U.S. Federal Government.

Bitcoin is the world’s premier cryptocurrency, a completely online, private, decentralized store of value and medium of exchange that is notoriously difficult to track and hack. It rose to fame for its use on the Silk Road, an anonymous online black market of sorts. Bitcoin’s amazing surge in value, coupled with its ease of use as a replacement for the dollar and other traditional state-run currencies, gave rise to speculations that it could end up completely supplanting the global financial system. This would allow citizens of the world to completely avoid funding the government, either directly through taxation or indirectly through printing money.

It’s all more than just speculation now. The government is getting worried. First it was Government Accountability Office addressing taxing Bitcoin. Now, with the Bitcoin raid over the purchase of illegal substances, the cryptocurrency’s time in the spotlight has begun.

And it won’t end peacefully. Here’s why:

First, attempting to track and tax Bitcoin will prove extremely difficult. This means that widespread taxation just won’t happen. As such, in order to secure obedience, the government will have to use “shock and awe” to scare users either into voluntary tax compliance or into abandoning cryptocurrency altogether. Such methods will probably include confiscation or destruction of assets, arrest, and imprisonment for many.

Second, the government has no other alternative. The state is maintained not through voluntary funding, but rather through threat of violence. If cryptocurrency becomes widespread, governments will lose virtually all their funding, and will no longer be able to exist as they do now. Their very survival depends on stopping, or controlling, Bitcoin.

The future isn’t certain, and even though I always bet on human ingenuity and freedom, we can’t see how this situation is going to play out. But one thing’s for sure: a great conflict is upon us. Even though the couple of skirmishes so far remain below the public radar, the struggle has been set in motion.

Begun the Coin Wars have…

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