There’s been a lot of talk in recent weeks about the possible use of virtual currencies like Bitcoin to buy illegal goods or services in existing markets. The argument goes like this: if you can use digital currency to purchase products and services without the need for a third party, then that might well remove some of the financial obstacles and inefficiencies that prevent small businesses from operating. It’s a great argument, but it misses one important point: governments should legalize cryptocurrencies. That’s what this piece is all about.
In my opinion—and I am sure many disagree with me—there are far more positive uses of cryptocurrencies than negative ones. We should not tolerate any attempts to ban or regulate them, and we should take steps to make sure that they don’t become a tool for criminals or money launderers. So here’s why governments should legalize cryptocurrencies:
- They’re the most transparent form of money available today
This is the most important point on which we should all agree. Cryptocurrencies are the most transparent form of money ever created. There are no third-party intermediaries in the buying and selling of cryptocurrencies.
All that’s happening directly between you and the person you’re trying to buy from or sell to. This level of transparency makes it extremely easy to identify who is behind a transaction and ensure that they are complying with the rules.
- A centralized digital currency is extremely risky and expensive to store
Storing money is probably the No. 1 security risk that a business or institution faces. Losing your money is a risk that businesses and financial institutions are very reluctant to take. So how can you store your cryptocurrency and make sure it’s secure? Well, for one thing, you can’t keep it in an email account on your computer—that’s the equivalent of putting your money in a savings account with a high-interest rate.
You can put your money in a high-end security camera or a better fire-proof safe. And you should invest in a wallet like Bitcoin 360. These are the types of investments that will help you make sure your money is safe.
- They’re the only currency that’s decentralized
Decentralization is the ability of a currency to be independent of any one institution or person’s control. Bitcoin and many other major cryptocurrencies are decentralized. There is no central authority that can shut off the flow of money and control the supply of a currency. This is a very positive thing.
There are no benefits to being centralized. If anything, being centralized in theory means that there is a higher risk of being hacked. But in practice, decentralized cryptocurrencies are more secure than centralized ones, and there is less of a risk of that occurring with decentralized cryptocurrencies like Bitcoin.
- There are benefits to being decentralized
There are benefits to being centralized, and there are risks to being decentralized. Centralized banks are more or less regulated, and they play an important role in the financial system. If something goes wrong, the system functions as intended. But with decentralized cryptocurrencies, there is no central authority to regulate them and there is no way to ensure that transactions are secure.
Decentralized cryptocurrencies are therefore more susceptible to fraud and hacking. These risks are outweighed by the benefits of decentralized cryptocurrencies, which allow for much smoother transactions and a greater level of privacy.
- If legalized, cryptocurrencies could be used for barter transactions
Bartering is the transfer of goods or services without using a third party. This can be done anywhere that barter agreements are accepted, and it’s done as an exchange of one type of currency for another. The goods exchanged could be goods like food or furniture, services like household help or car repairs, or money in the form of cash or a cryptocurrency like Bitcoin.
Bartering can be a great way to connect people who might not otherwise meet, and it can also help you to access goods and services that are not available to you because they’re only available to those who have the money to buy them.
There are many advantages to using cryptocurrencies. They are the most transparent form of money available today. They are the only currency that’s decentralized. There are benefits to being decentralized. And there are risks to being centralized. It all comes down to deciding which path you’d like to take with your money. If you’re concerned about keeping your money safe, then go with a centralized digital currency. If you’re looking for a quick boost in the economy, then consider using a digital currency like Bitcoin to purchase goods and services without needing a third party.