In the future we could see a situation where Bitcoin is as commonly used and accepted as traditional currencies are, but to get to that point Bitcoin will not only have to perform the basic functions of money at least as well as state money, it will also need qualities that transcend the way in which state money works. In order for that to happen there needs to be a level playing field between state currency and cryptocurrency.
The current situation is analogous to old monopolies (like British Gas or British Telecom) where a government monopoly stifled innovation and resulted in poor service. Once the monopoly was broken competition appeared and innovation prospered.
Just like any monopoly, those that profit from it will be reluctant to dismantle it but because Bitcoin is decentralised, it is hard to crack down on using courts and laws. To stop Bitcoin you would need to shut down the internet, so governments will find it extremely difficult to halt its rise. Although bitcoin isn’t the first example of an alternative currency it is the first that governments can’t realistically shut down.
The currency is here to stay, and as soon as authorities admit that (As California is edging towards), the sooner a level playing field can be established between currencies and cryptocurrencies to foster competition and innovation, the faster cryptocurrencies will innovate far beyond traditional currency uses, and persuade us they are better than traditional currencies.
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