The idea of cryptocurrencies is absolutely genius, and they’ve certainly become more popular over the past few years. Bitcoin has come a long way since its original release in 2009, and its future seems promising. Bitcoin, which represents the leading cryptocurrency, has already reported a rise of over 300% in 2017. Only a month ago, Bitcoin was worth $2,000, and now it’s doubled in value. It hit a record high last week at $4,500, and has decreased slightly since then, sitting at $4,276 today.
There are many advantages to using cryptocurrencies. You’re not supporting big banks, it’s anonymous and secure, and you don’t have to pay any online transaction fees or bank transfer costs, which can get pretty steep when dealing with large sums of money.
However, there are perhaps more roadblocks than advantages when it comes to cryptocurrencies, one of which is the potential for government intervention. Of course, in some cases this is necessary, given the potential for money transfers going toward human trafficking, drug smuggling, and other illegal activities, but even regular users were worried about the potential for government intervention due to taxation issues and concerns over U.S. border control/customs regulations.
As a result, U.S. Congress members are drafting a new bill that will protect cryptocurrencies from government interference, while simultaneously ensuring that users meet minimum requirements to prevent these currencies from being used by criminals. In essence, the government is creating a bill that both allows and disallows government interference.
The Bill That Could Help Cryptocurrencies Become Mainstream
The proposed legislation is aimed at protecting cryptocurrencies from being used to conduct illegal activities, while aiding in mainstream adoption. It has been speculated that at least one Republican Senator and two Republican Congressmen are drafting it. Further details have not yet been provided given the sensitive nature of the topic.
According to the Cointelegraph, the bill is aimed at preventing cryptocurrency from being considered as “a form of security or an investment,” from being taxed, and from federal government interference.
Potential interference has posed some issues in the past; in May 2017 the Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017 attempted to force cryptocurrency users who had more than $10,000 on their person to disclose it when going through U.S. customs. This posed a problem because cryptocurrencies like Bitcoin are always considered to be “on one’s person” since it’s all online.
Of course, people have also been skeptical of cryptocurrencies given the bad rap they often get due to underground payments being made for drug smuggling, human trafficking, and other illegal crimes. This is one of the biggest challenges, if not the biggest, when it comes to people trusting cryptocurrencies and actually implementing the use of them wide-scale.
To mitigate the amount of illegal activity conducted using cryptocurrencies, users will need to meet a set of minimum requirements in order to be awarded with the benefits from this bill.
If you’d like to learn more about Bitcoin and the usage of cryptocurrencies, check out this CE article:
Previous Concerns and Scandals Surrounding Bitcoin
As previously mentioned, part of the concern the public has regarding Bitcoin and other cryptocurrencies relates to how they could aid illegal activities. The fact that many cryptocurrencies are extremely efficient, completely anonymous, and practically untraceable obviously bodes well for criminal activities. This has been a hurdle for both mainstream adoption and government intervention.
One such controversy occurred when a British model was kidnapped and almost sold on the dark web as a sex slave. The criminal involved was asking for payment in the form of Bitcoin, and police found proof that the kidnapper had auctioned off other women before the model.
The FBI has also reported on this issue, disclosing that cybercrimes were responsible for $1.3 billion in losses during 2016 alone. There was an increase in Bitcoin-related crimes, as many involved ransomware that would infect users’ computers and then hold users’ files as “ransom.” The hackers would then demand payment in return for their files, typically in the form of Bitcoin.
Earlier this year, Forbes actually reported: “On the contrary – the only reason Bitcoin has value to anyone is because of the underlying value as a medium of exchange for lawbreakers. If we could flip a switch and eliminate all illegal uses of Bitcoin, there would be nothing left of the cybercurrency.”
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Does cybercurrency represent our future monetary system? Who knows! It certainly has the potential to replace physical money, but there’s no denying that there are many drawbacks as well. On the one hand, do you really want to be supporting something that is directly linked with criminal activities? Then again, the big banks and Federal Reserve are linked to some serious corruption, too.
Nevertheless, this bill represents an interesting opportunity to increase usage of cryptocurrencies, though only time will tell if cryptocurrencies will actually be adopted on a grand scale. The questions here are, do the benefits of using cryptocurrencies outweigh the disadvantages, and could they really revolutionize our monetary system?
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