Comment by unknown_apostle | Hacker News Reader

Comment by unknown_apostle | Hacker News Reader

unknown_apostle

Here's a question I've always had. If a government ever starts to fear a cryptocurrency, could it just destroy the cryptocurrency by blocking it at the network level? E.g. block a TCP port or something like that? Could that be circumvented and if so, would the cryptocurrency still be scalable then?

EDIT: thx to everybody who replied! That being said, I would have really liked to discuss the actual technicality of blocking a cryptocurrency :-) E.g. what technical measures could a hostile government take against bitcoin and how would any circumvention techniques, if they exist, impact scalability and usage of bitcoin. A lot of answers here just give reasons why a govt would never do something like this; or that there are other ways of discouraging bitcoin users; or that it wouldn't affect users outside of that country (wouldn't it though?). I think the dependence of cryptocurrencies on IT infrastructure is an important issue, as it puts boundaries on the extent to which a cryptocurrency's can truly be considered decentralized. I think we should assume that, given enough time, any cryptocurrency that makes it to the big leagues of being used as transaction money will be put to this test. And if it fails this test, its use cases will be more limited than what some currently think.

China, as of yesterday, is considering a blanket ban on all ICOs. Ethereum prices, of course, appreciated as a result.

I think crypto-anarchists will always find technology to "route around" any bad sectors in the network. Even if it comes down to sharing e-wallets via secure bluetooth mesh networks in ad-hoc fashion.

The more impactful story may be the way Big Banks are adopting blockchain tech. As with the R3 consortium and open-source Corda project:

https://www.corda.net/

Another data point to watch is LedgerX, the first LedgerX CFTC-regulated Swap Execution Facility (SEF) and Derivatives Clearing Organization (DCO) for crypto currencies.

https://ledgerx.com/introducing-ledgerx/

But suppose the technical managers of that currency and one or more governments are constantly playing whack-a-mole, wouldn't that degrade the scalability and usability of that currency? At least for the non-savvy people in those countries?

Money is only attractive if many people accept it as a payment method. Governments can easily make cryptocurrencies sufficiently unattractive that they don't reach a critical mass. There are no technology solutions to social obstacles.

IMO it's a mistake to view cryptocurrencies as "money".

If you view them as what they are, a commodity, you realize all you need is a buyer and a seller of that commodity. Whether or not you can trade that commodity for goods and services is entirely irrelevant.

Perhaps easier way is to criminalize using it. So usage will be limited, control and money printing will continue.

Do you think that actors in governments are not aware of the consequences of current monetary policies? They are looking for a life raft like everyone else.

If the use of a crypto currency is outlawed it will be less useful (in the affected country) and lose value. It will also be harder to convert the currency into fiat and vice versa.

They could also destroy it by putting people in locked metal cages, if they're found to have used a cryptocurrency.

The beauty of decentralisation. If Bitcoin (or other) continues on it's path and becomes widely used globally, the government has a huge disincentive to ban it. Lets say China, EU etc integrate $Crypto into their financial system, it would be economic self-harm for another player to ban its use.

Governments are more likely to outlaw the possession or use of something rather than "get their hands dirty". There is already a framework in place -> "Say it"/Legislate -> Let "authorities enforce it".

It's virtually impossible that all governments get together and outlaw it. And it's not even like with drugs where it can be argued that they are harmful. So there will still be plenty of countries in the world who wouldn't outlaw or heavily regulate it and they will thrive, while others will miss out.

It's enough to claim "only drug dealers, terrorists, and pedophiles use it" and randomly search computers of people who use it to make it sufficiently unattractive that it never reaches a critical mass of users.

It's not enough, because it's money. When it comes to money, most don't care what it smells like. That's why it's so unstoppable.

This largely depends on which government. For the US or EU the choke point is dollars or euros. They just make it illegal for any bank to do business with any organization that accepts said cryptocurrency. It won't "destroy" the cryptocurrency, just make it unviable as a currency. If you want to see something similar in action really dig into the nitty gritty details of how sanctions are used via the international banking system.

There is always a way to circumvent these blocks if the gov doesn't just block everything. Also, a reasonable large crypto couldn't get destroyed from just one country blocking it.

It's more likely they regulate at the exchanges and the vendors, i.e. the places you swap fiat currency and the places you buy stuff.

Of course, what's been happening in Bitcoin, the more they regulate it at that level, the more government legitimise it in the eyes investors and consumers, and the more it's usage increase. Regulation causing increase in usage - exactly what the word regulation is suppose to mean - to enable.

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