Illegal State Brings Value to Crypto than Legal Tender
I know a lot of us think that crypto needs to be accepted in every country. And banks and the govt should shut down. Meanwhile many among us lose money in DEX and other decentralized instruments. Hear me out, I am not being negative to crypto, just being realistic than a dreamer.
More news you read these days the more you realize that countries with crypto as legal tender are not doing any good. In fact their average public is struggling. People who don't even know how to scan QR code are being handed over bitcoin as the currency.
Meanwhile the more crypto gets the legal tender acceptance, it seems like crypto is losing it's value. Think of it like seeing the hero after adventures end. The social Effect where the coin losing it's value and becoming more normalized.
What could happen if Crypto becomes normalized?
What are some of the things that may happen if the crypto becomes normalized or say becomes legal tender in small nations. So let's discuss the same.
1. Anonymous Coins losing their Value
Imagine if CBDC becomes norm, the anonymous coins would be losing the value. People who are rebel would no longer think of crypto as a means to derive value once people move ships to the crypto offered by govt. People will be either forced to use Ethereum alternative approved by govt or simply similar projects which are govt controlled or multi-nation controlled blockchains.
2. Illegal finding Way inside Legal
A lot of people among us know that currently crypto is being used to turn the illegal funds into legal. If people find the way into the crypto then they can do the same inside the legal crypto instead of doing a lot of churning inside decentralized.
3. Regulation in Blockchain
Like most of the bank and finance projects, you would find that blockchain based programming would get regulated and also follow certification path for getting those legal jobs. Like you need to get certified and follow regulated practice for certain jobs and innovation too would be done through that sphere.
Illegal Has more Power than Legal
When bitcoin crypto started taking off in terms of the concept and the price rise, it was sold as a means for getting funds off the eyes of government. People thought the world without government would be possible.
In reality, you escape the local government only to create singular government when you try to push for decentralization. Which is kind of scary if you can imagine the world in the hands of China, Taliban, Russia like united front. I can't even imagine that world.
So the current rich people who managed to become one using the crypto trading or holding is because the crypto is illegal and it has made them more profit. Once it becomes normalized a lot of coins would lose value and so does it would fall below the legal tenders.
What do you think?
Do you think crypto would lose value once the CBDC comes in? Do you think the current value of crypto is higher because it is mostly used for the illegal purpose in the market? What's your opinion?
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It is an interesting point of view, it does not work to impose something from the top, from the government, and that is why countries that adopt cryptocurrencies are going to face the problem that the population is not adapted to them. It is the opposite of an organic diffusion among the population that would be from the bottom to the top, the population assimilates the cryptos, and then they become "legal".
I don't know if I have the same point of view regarding decentralization, but it is something that time will tell if the decentralization that cryptos bring will be beneficial or not for the world. Greetings!
I differ in opinion with you in that I do not believe crypto is "mostly used for the illegal purpose in the market." At this point in the game, I think there is a minute part of crypto that is used for illegalities, even if you include scammers. For instance, if you look on the Hive blockchain, how much of it is transacting illegally? The only part of that where it is true would be countries where they have illegalized crypto fully and yet people are still finding ways to participate online through VPNs or other such means.
I'm not saying nothing illegal is taking place in the crypto-sphere, but it would be naive to say crypto is mostly used for illegal purposes. I would say most crypto is being used for wealth creation and for technological introduction of new ideas/concepts. Even large companies like Amazon are using crypto for logistics, even though there's no coin attached to their crypto...it's crypto nonetheless.
As for the value going down, scarcity and velocity will decide that...supply and demand. As more people adopt one currency over another, that currency picks up steam. If it is a currency with a finite supply, the scarcity will increase, thus the value per denomination will increase, not decrease. There are many coins, but get this...I was in Target the other day returning headphones I got for my son. When I returned them, I didn't have the receipt. They gave me store credit and told me I wouldn't be able to spend the money anywhere except within the store. In my mind, that's the same as cryptocurrency. You have limitations on where you can spend it, but it still has value. I took the store credit and bought another set of headphones. People do this all day in the gaming world and think nothing of it. My son likes to play Fortnight. He got Vbucks for Christmas. $20 USD was exchanged for Vbucks. As far as I'm concerned, this in-game currency is cryptocurrency...you can only use it within the game. We've been doing this for ages now and it's not going to stop any time soon...it will just have another name. Call it Vbucks or LVL, or SPS, or whatever, and you still have a currency being used...not for nefarious purposes. Value goes up as long as the supply is restrained and people are demanding it more than before.
That's just my opinion ;)