Cryptocurrency And Libertarianism: Can Crypto Uphold Libertarian Views Without Government Scrutiny

Vandana  |  Aug 21, 2020

Bitcoin was created with the sole aim of creating an alternative to the centralized fiat monetary system.  This element of decentralization is a major factor which attracted many of Liberatrain view to this space.

Libertarianism could be understood as a political philosophy that seeks the minimal intervention of the government in the lives of its citizens. The basic principle on which the foundation of libertarianism has been formed is “liberty”. As this philosophy also aims to reduce government intervention just like decentralization, that is why people tend to associate cryptocurrency with libertarianism.

Cryptocurrency and Libertarianism 

The core principle of most of the cryptocurrencies is to create a completely secure and decentralized ecosystem that will remove the intervention of the central authorities to a very great extent. This is the reason why libertarians are highly attracted to cryptocurrencies and advocate for their wider adoption. The cryptography technology on which the cryptocurrencies have been established ensures that all the transactions are highly secure and private without the need for any centralized authority, and ultimately it fulfills the major goal of Libertarianism. 

Satoshi Nakamoto, the creator of the world's largest cryptocurrency, Bitcoin, also aimed towards this decentralized system. This is the reason why Bitcoin acts as a hedge against inflation as its market movement is not dependent on any other asset class.

Crypto regulations and its impact on cryptocurrency

In the past few years, it has been seen that governments across the world are showing great interest in cryptocurrency and blockchain technology. However, they are certainly trying to regulate cryptocurrency partially and even fully in some places. By regulating crypto, the government authorities will make several rules for cryptocurrency in order to have some kind of control over them.

This cannot be denied that some sort of regulations in cryptocurrency is not harmful at all, in fact, it gives a sense of security against the risk to the crypto users. Even after all these years, there is a huge section out there who hesitates to put their money in cryptocurrency. This could be seen as a major reason that in many places around the world, the crypto adoption is very minimal.

It is believed that crypto regulations are going to play a huge role in the long-run for cryptocurrency and are going to benefit them to the fullest. Through regulations, the ownership of the virtual asset will become highly secure, financial institutions will be able to invest in them and a lot more. There are also several claims which state that government regulations can influence the price of cryptocurrencies extensively. 

Even though there are a lot of benefits that the crypto users are going to get from regulation, it will destroy the core principle of crypto being decentralized. If or when the cryptocurrency will be regulated by central authorities, the privacy will be compromised extensively. It will also lose trust from all the libertarians who believe that cryptocurrency will create the kind of financial system that they have been looking for.

A system where there will be no place for government intervention and one can spend their funds independently.  This might also have a negative impact on crypto adoption because a lot of people have moved towards cryptocurrency because of the decentralization factor. 

Conclusion

If the government regulations have to be applied to cryptocurrency then there must be a particular pattern and it should not be fully controlled by the central authorities. If there will be complete involvement of government bodies in cryptocurrency then it won’t act like a safe haven during the time of crisis. However, the association of libertarianism with cryptocurrencies will be demolished completely. 

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