Is Bitcoin Regulation Necessary? Image: Adobe stock
Bitcoin has primarily operated unregulated and unchecked. And this has been a primary concern for governments and regulators who are worried that Bitcoin’s unregulated nature could be a recipe for disaster. However, for those opposed to Bitcoin regulation, regulation is wrong and unnecessary. Part of their argument is that the law is tantamount to government interference. Before looking into some of those reasons, please check out the british-bitcoinprofit.com if you are interested in trading Bitcoin.
Bitcoin came to replace the centralized financial system. It provides a decentralized digital currency and investment asset where neither government, regulatory institutions, nor other commercial intermediaries have control. And this has been a critical selling point for Bitcoin. But it has also instilled fear among some investors, especially institutional investors who prefer regulation to reduce risk.
Bitcoin operates on the same underlying blockchain technology as other cryptocurrencies. And this provides the security of users. It’s virtually impossible to hack the blockchain. Even the concerns that the blockchain could be compromised are pretty baseless. Since Bitcoin’s development, there has never been an incident of blockchain being hacked or compromised.
On that basis, then, one wonders why the need for regulation. Without negating the concerns of those who oppose the law, Bitcoin regulation is not necessary, but it is crucial for several reasons.
Bitcoin regulation is essential because it will boost investor confidence. Many institutional investors have opted to stay away from Bitcoin because of the lack of regulation. These high-stake investors see the lack of law as a high-risk investment. With Bitcoin regulation, these investors will feel confident in Bitcoin and invest massively.
The Bitcoin market is unstable. Prices keep changing unpredictably, which has pushed many potential investors away. Regulation will ultimately bring some stability by minimizing speculation in the market. Moreover, with law, more institutional investors will come in, and this will also contribute to price stability.
While most Bitcoin users are honest investors, there are always those who come with ill motives. Criminals often use Bitcoin’s anonymity and privacy to cover up their tracks. You have probably heard about stories of cyber criminals hacking into government or institutional systems and demanding payment via Bitcoin. With proper regulation, this can be curbed and make the Bitcoin market safer for everyone.
You may be so confident about Bitcoin’sblockchain technology. But you may fall victim to criminals who may get access to your digital wallet and milk it dry. Likewise, you may use Bitcoin to pay for an item you purchased online, but the seller won’t deliver. While you can go to the police, there is only much they can do because of the lack of specific Bitcoin regulations dealing with such matters. Bitcoin regulation will help you in such times because you will have a particular place to go to for help.
Lastly, Bitcoin users need to differentiate regulation from government interference. Bitcoin regulation could streamline the market, protect investors, and reduce criminal activity. These should not worry you unless you intend to use Bitcoin to hide some illicit activity. It does not mean that government or regulators can determine how you use Bitcoin.
Bitcoin regulation is not necessary, but it is vital for the above reasons. There is some unfounded fear of rules based on baseless claims and assumptions. Perhaps a mindset change is needed to ensure that Bitcoin investors understand that regulation is not the same as interference.
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