Is it possible to destroy Bitcoin?
Today, I’m going to destroy Bitcoin.
This should be interesting.
What if I told you it was possible to destroy Bitcoin…
Don’t be silly.
Let me finish. What if I told you it was possible to destroy Bitcoin from the position of the government.
If I were the government, I’d ban all the fiat services that serve/help Bitcoin.
People have said many things regarding the ability of governments to shut down Bitcoin. This could work in theory, but it is impractical and has failed in different countries.
Take Nigeria for example; in February 2021, the government issued a ban on all fiat services that helped facilitate Bitcoin transactions. When the ban began, Nigeria was the largest Bitcoin market in Africa.
Sixteen months later, Nigeria still remains the largest Bitcoin market in Africa.
I’m sure you’re probably wondering how this is possible. Many Nigerians simply moved their transactions from the regular banking-crypto system to P2P (peer-to-peer) platforms.
P2P platforms allow you to trade directly with another person with minimal or zero involvement from third-party intermediaries. Let’s say you want to buy Bitcoin to hold. You visit a P2P platform (Binance P2P, Remitano, Bundle) and register. The platform then connects you to another person that wants to sell in your region. Once you get matched, the seller’s Bitcoin becomes locked in a safeguard system called an “escrow”.
You’ll then be required to pay the amount required in your local currency to the seller’s bank account. Once the seller confirms the payment, they then release the coin to your wallet address. Simple as ABC.
So, if any government decides to ban financial services from supporting bitcoin, the populace will just switch to P2P platforms. This defeats the purpose of the ban, as more people will still be able to transact with Bitcoin.
I could bypass all these and just blacklist companies like Binance and co from operating in my country.
Hahaha! Do you know that crypto companies are blacklisted, and the use of crypto is banned in China? As you may know, China is the second-biggest economy in the world and was one of the first places where Bitcoin became popular.
When the Chinese government totally banned crypto in 2021, it was seen as a big blow for Bitcoin. At the time, China had more than 60% of BTC miners and many people who held Bitcoin.
After the ban, Bitcoin miners simply moved away from China to other crypto-friendly nations like Singapore and began to flourish. You should also know that since 2019, more than 42 countries have banned Bitcoin and crypto companies in different forms.
Yet, Bitcoin has continued to thrive and increase in value during this period. This should tell you that it has grown beyond the level where government blacklisting can work.
Governments worldwide are notorious for seeking a competitive advantage over each other. Once a nation bans crypto, the neighbouring countries quickly passes friendly laws to attract companies forced to leave the region.
Well, I could just attack your precious Stablecoins so that all forms of stability would be removed from the ecosystem. I wonder what will be left when I’m done.
Lol! Please note that not all stablecoins are stable. You can read a previous newsletter on how UST, a stablecoin, lost more than 70% of its value in a few days.
Back to your question, stablecoins are not as important as many claim and they are even the source of controversy among many Crypto OGs. Do you know that the first stablecoin — USDT — was launched in 2014?
That is seven years after the launch of Bitcoin. The presence of stablecoins in the crypto market is tied to the popularity of Bitcoin. Bitcoin was already well known and used before the advent of stablecoins.
Stablecoins were only introduced to ensure that crypto investors could reduce their exposure to volatility. If you remove stablecoins, everyone will revert to exchanging their Bitcoin for fiat currencies directly to hold the value of their assets. Therefore, removing stablecoins will not be as effective as you think
Tbh, I could turn off all the computers in the world and end your precious “digital gold.”
Haha! That’s financial armageddon.
Most developed countries have reached a stage where most of their banking system is online. So turning off all the computers in the world will lead to a shutdown of the global banking system.
You won’t be able to access your money from the ATM, and there will be panic globally. So it isn’t worth the risk. Let’s even imagine a scenario where you can turn off all computers for a minute and restart.
The Bitcoin system would (theoretically) start again from the longest chain last recorded before it shut down. So, technically, Bitcoin can never go extinct as long as computers and the internet exist.
Alright, alright, I could release a super virus that targets all the Bitcoin computers in the world.
Even if you manage to release a super virus targeted at only the Bitcoin network, it will be challenging for it to overwhelm its blockchain. This is because the Bitcoin network constantly reviews the blockchain for errors. Any error detected is highlighted and developers globally work together to release solutions to fix them.
Furthermore, erasing or overwriting information on Bitcoin is rendered impossible by the decentralized computing power demands of the Bitcoin blockchain. As a result, it will be super expensive to achieve and not worth the effort.
Meh. In that case, I’d just bribe Bitcoin miners and control the whole mining process.
This could have been possible a few years ago when only a few miners controlled the Bitcoin network. There’s something called a 51% attack. This is when an entity controls more than half (51%) of the total mining power of a blockchain.
This entity will be able to decide which transactions to approve and decline. In the early stages of bitcoin, some mining companies could control 51% of the network.
However, Bitcoin’s growing popularity and reward potential has resulted in thousands of miners joining the Bitcoin network. So it is almost impossible to achieve enough power to control the Bitcoin network.
The decentralized nature of Bitcoin also means you have to bribe many people from different locations in the world. That would be a major logistic nightmare.
I don’t understand why you look pleased with yourself.
Lol! I haven’t even said anything.
I need to quickly go and confirm something. I hope you’re still smiling when I come back with more ways to destroy your precious Bitcoin.
I’ll be here waiting.