One of the common criticisms thrown Bitcoin’s way over the years has been that the system cannot work because governments will eventually ban it if it interferes with their ability to do things like control monetary policy or collect taxes. This has been the main criticism offered by JPMorgan Chase CEO Jamie Dimon when asked to comment on the peer-to-peer digital cash system.
But would it be possible to implement such a ban? Has the proliferation of Bitcoin already reached the point of no return?
In a recent interview with Crypto Insider’s Vlad Costea, Riccardo Spagni and Cayle Sharrock, who both work on projects related to the privacy-focused Monero altcoin, made the case that banning cryptocurrencies like Bitcoin and Monero would be just as pointless as the War on Drugs.
Strong Financial Privacy is Almost Here
When Costea asked his two guests what the private cryptocurrency space will look like in five or six years, Spagni explained his hope that the technology will reach a point where it becomes the norm.
“I personally hope privacy coins are going to be dominant enough that it will force everyone else’s hand,” said Spagni. “Between Bitcoin having enhanced privacy through something like Lightning and TumbleBit, between Monero and the work being done on ZK-STARKs by Starkware, between Grin and Beam and Tari [working on MimbleWimble]. I mean all of these projects that are building various privacy-enhancing aspects — I’m hoping that it’s just going to force a reckoning where everyone will have to go: ‘Okay, privacy is here. It’s accessible. Strong privacy is here.’”
Of course, user activity on centralized crypto asset exchanges is still under heavy surveillance, as indicated by the recent “crypto needs rules” ad campaign from digital asset exchange Gemini, which was co-founded by the Winklevoss Twins.
You Can’t Stop People from Using This Technology
Once strong privacy in cryptocurrencies has been established, Spagni is of the belief that it cannot be banned or regulated.
“We can’t stop people from going down this road because people are going to use it anyway,” said Spagni.
According to Spagni, a ban on a private cryptocurrency like Monero would be similar to a ban on marijuana, which may not be worth the associated costs.
“You have like this whole War on Drugs and you’re arresting people for growing weed in their garden and, as a government, you expend billions of dollars on this,” said Spagni. “And ultimately, the thing ends up getting legalized anyway, and all you’ve done is waste time.”
In Spagni’s view, there is a chance this same story will play out again with privacy-enhanced cryptocurrencies, as lawmakers are scared of the existence of private online transactions to affect basic government activities such as tax collection.
For example, then US President Barack Obama said at SXSW in 2016:
“If technologically it is possible to make an impenetrable device or system…what mechanisms do we have available that even do simple things like tax enforcement? Because if in fact you can’t crack that at all, and government can’t get in, then everybody’s walking around with a Swiss bank account in their pocket.”
“Over time, they’ll start to realize that actually you can still do proper law enforcement without needing to see everyone’s transactions,” added Spagni. “You can still do proper tax collecting without needing to see into everyone’s bank account.”
Privacy Advocates are Not Criminals
From Sharrock’s view, privacy-focused cryptocurrencies like Monero have the power to disable a government’s ability to take away the fundamental right to privacy.
“Privacy is a right, and technology has allowed the governments and other state agencies to encroach more and more into that right,” said Sharrock. “And [encryption] is a reaction. It’s a way to say, ‘No, we’re taking that right back.’”
Sharrock then added, “People who advocate privacy in money and messaging are not criminals. I think they’re just trying to stand up for what is fundamentally a human right.”