Good. A precursor to banning crypto itself, I hope. The government SHOULD have a monopoly on certain things, like lethal force (armies), and issuance of currency, because total chaos and anarchy would happen otherwise.
Now whilst cypto is another currency, it is one that is very volatile and as we have seen, anything that volatile in a currency is always never good for the majority.
Also to have any impact, such crypto's would need to become more widespread and whilst in geek land we may view things as common usage, your average citizen probably at best only just aware of their existence. Indeed I'd hazard a guess that most people in any country have never held currency beyond their local offering (though the dollar sure does come close and that in some countries).
Is it? How would you go about banning crypto completely such that nobody uses it?
Then whenever you trace it to one of your citizens, you throw them in jail. This would destroy the exchanges, and prevent most people from participating in it (even as a curio).
It would be ultra easy to destroy crypto. If the US, Europe or China bans it for real, it will be worthless overnight. Nobody cares more about crypto than pissing off any of them.
I think all major countries are gearing up for this and it will happen eventually.
They have million man armies, jets, tanks, millions of bureaucrats, leading edge development programs, hypersonic missiles, nuclear weapons, atomic energy, etc - but they "couldn't stop crypto!", a ledger where all transactions are...explicitly public?
Like come on. They have entire departments devoted tracing transactions for tax avoidance, but they're helpless against...a public list of transactions? No way.
I think the big issue is just the scale of the market. They _could_ do it with enough funding and manpower, but I think it would cause a Streisand effect in that privacy-centric tokens would become more popular.
It's better for governments to contain it and not appear to be against it so that development focus doesn't shift to Monero-like tokens.
You can design a ideal token - the Platonic model of a crypto. Totally secure, totally anonymous. Assume it perfectly hides all information about all users.
And they could easily still destroy it - they'd just attack whoever offered cash for that token, who they would uncover by tracing regular cash (Dollars/Euros/Rinmenbi). There is no technical solution that can avoid actually avoid tracing when you turn the crypto into goods and services - unless both parties are willing to deal in that token exclusively AND not to keep records of any of their dealings. Which makes it only useful for illicit activities anyway - you're not going to get your kitchen remodel done and everyone is going to agree to get paid in your token and not report it to the government while also somehow hiding the fact that you're having people show up to your house to do work. It's just not practical. SOMEONE on the kitchen remodel team is going to go "Nah, I want...dollars?".
There's an XKCD about this:
^ They'd just drug the people involved and hit them with a wrench until they gave them the answers. Developing any of these "cryptos" is a total waste of time, and has been since day one - eventually people will figure this out and the price will plummet.
...in my opinion, obviously.
I think what's going to really happen is that the US is going to release a digital currency, and it will gain real adoption, and which one is Grandma going to use? Real US-backed E-bucks or... some trinket coin she doesn't understand that only allows her to buy heroin and contract killers? I mean maybe Grandma likes to party and has made a lifetime of enemies and it's a perfect fit, but I...doubt it?
Monero keeps no record of headers of each transaction, so granted it might be a bit interesting on a tax form how you got 100m in $Y currency but the crypto to $Y fiat off-ramp would be hidden. Also, there's BTC ATM's, people willing to meet in person for a crypto/cash exchange and plenty of people using crypto to provide liquidity for other base pair swaps.
Also, i don't believe crypto is ever going to be used for the masses. But it has very interesting properties in finance like POS, sythetics, etc. These are REAL uses (read economic gains) So, i may not ever use it for paying for my kitchen remodel but i will HODL it and see my fortunes rise.
Lastly, Multi-level marketing is a 'Meme' in the purest definition. It's why it has popped up in so many manifestations. Whether it's a good Meme or not is a different question but is the reason i believe crypto is here to stay. it's a brain virus with the implicit understanding that if you own crypto, it behoves you economically to get more people into it. If you don't own it and hate it, you are only passively 'Hating it', in a more dismissive posture than anything. This one sided take is the reason crypto will continue to eat traditional finances lunch.
In what sense can it be a useful currency?
Eventually, when everything is traded and priced in bitcoin, bitcoin becomes an objective unit of value. At that point bitcoin is the only thing that is not volatile, and volatility of everything else is measured against it.
Volatility is an an inherent property of an asset/currency/whatever(stddev of (log)returns), as long as you have a fixed and distinct numeraire.
Sure, you can argue that bitcoin may _be_ the numeraire one day, but what's the path towards that when it's so useless as a currency presently?
Either it's good as a currency, or it's good as a savings vehicle.
You seem to be confused about which line you're pushing
Of course there is, for example it would be necessary for it to be useful as a medium of exchange. Which, bitcoin certainly isn't.
I can't purchase, for example, >50% of the basket of goods that comprise the CPI with bitcoin.
Sure, you can argue that anything which can facilitate more than 0 exchanges with more than 0 counterparties is, at least ephemerally, a currency. But if you're arguing that, you've already lost.
Bitcoin is similar to gold in this regard, with the difference that the total amount of gold is practically unlimited and gold is mined with an unpredictable schedule.