Should cryptocurrency be banned?

 

Image reference: Kaspersky

 

Cryptocurrency is an encrypted, digital currency. One of the most representative cryptocurrencies is Bitcoin. In recent years, news about Bitcoin has often been seen in the media. Since 2017, the government of South Korea has been trying to regulate cryptocurrency due to its potential drawbacks such as gambling risk. Despite the risk of gambling and over investment, I believe that cryptocurrency should not be banned. 

 

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First of all, buying cryptocurrencies is an investment, not a gamble. According to the people who think cryptocurrency must be banned, the reason why some governments tried to regulate it is because people who invest in cryptocurrency do not decide their investment by looking at the value of a company or the trend of the world economy, like they would do when investing in other asset classes like stocks. It seems like an unreasonable investment that depends on luck or their feelings. On the contrary, cryptocurrencies are tightly linked to the latest economic trends, and investing in them is a way of investing in the industries of the future. For instance, the reason why Bitcoin attracted attention was because of the belief that it embodied decentralization without state intervention and market action by autonomous functions. It was Bitcoin’s ability to capture the economic trend toward decentralization that led to it being valued so highly by the pure market forces of supply and demand. The resulting non-fungible token (NFT) craze and the revival of DeFi finance also show that cryptocurrencies are at the heart of an economic trend for which a robust future market exists. In this regard, the government should focus on fostering the virtual currency market rather than discriminating against it with regulations.

 

Image Reference: forbes

 

On top of that, cryptocurrency can become a solution for inflation. The greatest weakness of the original monetary system is inflation. The existing currency is an inflationary currency whose issuance increases over time. If the money is printed too much, the value of money goes down and the prices go up. Inflation obviously makes people’s lives difficult. Surprisingly, some cryptocurrencies do not have a risk of inflation. Let’s think about Bitcoin. The advantage of Bitcoin is that it is a hard money with a limited supply. Bitcoin can be defined as a deflationary currency in which the number of issuances decreases. Bitcoin is already a currency designed with mathematical coding. It has a half-life that halves every 4 years. In other words, even if the existing cash value is at risk of falling due to inflation, the cryptocurrency can be a solution to survive from inflation. While some countries are trying to ban the cryptocurrency, Bitcoin has survived in the United States and entered the institutional system already. Even if you are not an IT expert, it has become easier to have Bitcoin for investment and the way to avoid the risk of inflation. 

In a nutshell, the point is that inflation creates a favourable environment for cryptocurrency investment. The possibility of Bitcoin price rise will increase as the time passes. Consequently, the government should not ban cryptocurrency.