Will Governments Destroy Bitcoin?

By Crowphale | crowphale | 6 Jan 2021

Money enabled humans to specialize and collaborate [1], but since it's typically controlled by a central government, it's been also used to control people. Bitcoin removes this centralized control and gives the power back to the individuals. Many people believe that the world that runs on Bitcoin will be much better: more fair and diverse.

If people use Bitcoin to pay each other instead of fiat, there is a problem for the current governments though: they won't be able to get funded, unless people fund them voluntarily. Some people argue that will be better because suddenly the governments will need to do good job to get funded, just like a company needs to build a product or provide a service that their customers are willing to pay for. Well, even if that was better for most individuals, I think there is still a clear motivation for the existing governments to destroy Bitcoin, or at least centralize it, to keep the reliable funding through mandatory taxes, such as inflation.

What can the existing governments do to control Bitcoin? Some people think the answer is “nothing”. However, I'm afraid they are wrong, because at the end of the day Bitcoin is just code that can be changed. Technically, nothing is stopping us to increase the number of Bitcoins, or reject some “dirty” Bitcoins. For instance, some miners could start applying a black list of “dirty” Bitcoin addresses and never include them in the blockchain. Juraj Bednar describes how this could be achieved by convincing significantly less than 50% of miners in his great post: How could regulators successfully introduce Bitcoin censorship and other dystopias. Of course, this black list would be maintained by the governments, and once that's in place, they can use it to enforce taxes, de-platform individuals they don't like, and probably anything else.

You might think that all miners believe in the original Bitcoin philosophy and would never do this. How is the government going to convince them to do so? How about making it illegal to mine “dirty” Bitcoins and turning off their electricity or internet if they don't comply? How about child porn – the most powerful argument for banning encryption? All these “dirty” Bitcoins were used to fund child pornography, and we certainly must stop that!

What do you think? Am I totally paranoid and this will never happen? If you think so, please tell me why. What are some other ways how the governments could destroy or centralize Bitcoin? Most importantly, what can we do to help preserve the original mission of Bitcoin?

How do you rate this article?



Trying to understand the universe. Privacy, Machine Learning, Bitcoin, People. Here I share my thoughts, and questions. Email: [email protected] | Twitter: @crowphale10 | Keybase: crowphale


Random thoughts about universe.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.