Governments, private banks, and all central banks, credit card industry giants, such as Visa, MasterCard, and American Express, taxing agencies, some tech companies such as Apple, Microsoft, Google, Amazon, and the United Nations are all in principle opposed to Bitcoin.
Governments want to tax anything and everything. That is what they do best. Taxing transactions and people requires knowing who spends what and with whom. Any alternative currency that offers anonymity such as Bitcoin, presents governments with a hard challenge. After all, how can they track Bitcoins and the users to tax them?
If we set-up our Bitcoin accounts in a certain fashion, and do not bring Bitcoins back into our bank accounts, then governments will have a hard time accessing this information.
Government regulations attempt to restrict access to exchanges, label it an investment, or that it is trying to be a currency that threatens the government monopoly. All these fall under Financial Crimes.
Users of Bitcoins do not fall under Financial Crime rules, but any exchange or wallet services do! They are known as MSB’s or money services businesses. This means that any service that transfers, exchanges, stores, or interacts with Bitcoins on a per fee basis, could eventually be the target of the banking regulation authorities and any other taxation or fraud investigation agency that chooses to participate.
This represents the greatest threat against Bitcoin. Our mystery developers behind Bitcoin saw this attack coming. Their answer was to distribute the ability to exchange Bitcoin. They built it in a “black market.” What they really built in - was freedom for free people to transact without anyone else knowing about it, taxing it, or being able to stop it.
There is no way short of taking down the Internet and/or power grid for the government to fully stop Bitcoin. That won’t necessarily stop them from trying, however.
Banks have a monopoly on storing, distributing, transferring, making loans, and exchanging currency.
Banks look at Bitcoin as an enemy stealing their wire fees, currency exchange fees, late fees, overdraft fees, and even their bank vault fees. Banks of all kinds, governments around the world, and the centuries old power structure of world banking families and institutions all hate Bitcoin.
In time, Bitcoin can put many banks under. No more credit card fees, bank accounts fees, or controlled interest rate schemes can flourish when we can provide our own banking services through choice.
The distributed nature of the Bitcoin network and mining is a great strength. The network verifies all the transactions. It also solves any disputed transactions. With a huge and growing number of nodes, there is no single server to hack for the miners, spenders, merchants, or governing body. Without a central storehouse of key data such as a Citibank, Bank of America, or any number of other major banks, the system is much more robust than almost any other currency system.
The cryptographic code for Bitcoin is virtually impossible to crack. That brings all the focus for hackers to use more basic brute force methods of shutting down exchanges and getting Bitcoins.
A DDoS is a Distributed-Denial-of-Service attack that sends huge numbers of bot data visitors that overload servers. When an exchange gets hit, inevitably the value of Bitcoins tumbles. This alone would provide enough profit to motivate hackers to crash exchanges for cleaning up the now devalued BTC’s. When the exchange gets back up and running, the value of BTC’s climb and the hackers have their pay day- possibly. It is also possible that the hackers simply want to crash the service.
In theory, an individual or an agency can slam the value of Bitcoin by selling a huge quantity in less than one hour. This would effectively cause Bitcoin value to plummet because nobody would get their value in their national currency out of Bitcoin.
Some theorize these acts could be planned and executed by individuals or organizations banking and financial powers, backed with government approval, to see how they could ruin this new competitor. While a banking entity or government crashing Bitcoin is a possibility, a private individual can crush any currency in similar fashion.
George Soros famously helped devalue the British pound on September 16, 1992. Soros sold British pounds aggressively which he had borrowed, and eventually forced the Bank of England to break its peg to the European Exchange Rate Mechanism. Soros made over $1 billion in this trade.
On the plus side, the open source software groups support Bitcoin strongly. The younger generation has adopted it as their own. Asia is betting on Bitcoin to preserve their hopes for increasing wealth while their central banks create massive inflation. Those wishing to keep funds from being confiscated will use Bitcoin.
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