Bitcoin and Governments: Why Countries Try to Ban It and Why They Fail

[00:03] that anyone buying or selling Bitcoin would be punished, anyone mining it would be imprisoned, and any bank dealing with cryptocurrency would be shut down. The question no one asked at the time was: why would a country the size of China, the world's second-largest economy, fear a computer program? Why would a country with an army, a

[00:16] central bank, and 1.4 billion citizens go to the trouble of fighting a digital currency? The answer will change your perspective on money forever. Bitcoin is now traded in billions of dollars every day. Companies like MicroStrategy and BlackRock buy Bitcoin in

[00:31] huge quantities, and countries like El Salvador and the Central African Republic have adopted Bitcoin as their official currency. But on the other hand, many countries are fighting it, banning it, and imprisoning its users. In this video, we'll understand together exactly why governments fear Bitcoin. This isn't a

[00:46] personal opinion or emotional analysis; we'll talk with numbers and facts. So grab your coffee, and let's get started. First, let me tell you... Here's a true story that happened in Argentina, a South American country. Inflation there reached terrifying levels in 2023. Prices increased by more than 200% that

[01:02] year. For example, a kilo of meat that cost 1000 pesos (the Argentine currency) in January cost 3000 pesos by the end of the year in December. Imagine working all year and finding that your money is worth only a third of what it was at the end of the year. So what did people do? They understood they

[01:16] had to get out of the pesos, but the government had closed the doors. Buying dollars was limited, transfers abroad were restricted, and there were taxes on everything. That's when Bitcoin came along. People started using Bitcoin and stablecoins pegged to

[01:30] the dollar, like the USDT and USDC, to protect their money. In other cases, people were investing in Bitcoin for the long term. Another phenomenon that emerged was crypto caves, which are secret places where people go to exchange cryptocurrencies. The peso is backed by

[01:44] digital currencies, and suddenly the government finds that control over the economy is slipping out of its grasp. The question is, what would you do if you were in the government's position and had a weapon called printing money, but suddenly people were fleeing your currency for something else you couldn't control?

[01:57] Before you answer, let me explain something very important that many people don't understand. Most governments in the world rely on something called monetary policy. Simply put, the central bank in every country has the ability to print money. When the economy collapses, it prints money. When the government

[02:11] the economy collapses, it prints money. When the government needs to finance wars or projects, it prints money. If it wants to encourage consumption, it prints money too. This isn't a conspiracy; it's a reality. Research the full extent of the easing of monetary policy yourself. For example, in 2020 alone, about 20% of the dollars

[02:25] in circulation in the US economy were printed that year. Can you imagine? 20% of the entire history of the dollar was printed in just one year. So what's the problem? As a general rule, the more money you print, the less value the money in your hand has. This is simple economics: if there's

[02:41] more money, prices naturally rise. The US dollar, for example, has lost more than 96% of its purchasing power since 1913, that is, since the Federal Reserve was established. Now let's look at Bitcoin. Bitcoin doesn't have a central bank or a government, and the

[02:56] Bitcoin code protocol specifies that the maximum number of Bitcoins is approximately 21 million, and there will never be an increase beyond that. Imagine if people abandoned the dollar and switched to Bitcoin. What would the government do? It would n't be able to print more money, it wouldn't be able to devalue the currency, and it wouldn't be able to use this tool.

[03:10] This is almost like someone who has a key that opens all doors, and suddenly finds a new door that the key doesn't open. You need to know that governments are not afraid of Bitcoin as a technology, they are afraid of losing control. Now let's talk about something deeper, which is the

[03:24] banking system. Before I tell you, I advise you to subscribe to the channel to see the upcoming videos, and also activate the bell button so that you receive all new content. And don't forget to like the video so that it reaches the largest possible number of people and everyone benefits from it. Look, the banking system in every country in the

[03:38] world works in a certain way. You put your money in the bank, the bank takes this money and lends it to other people and profits from the difference between the interest it takes and what it pays. This system is called the fractional bank reserve, meaning the bank keeps a very small part

[03:51] of people's deposits, about 10%, and uses the rest, which is 90% of the depositors' money. So what's the problem? The problem is that the bank is the intermediary. If you want to send money to your brother or friend in another country, the bank is the one that makes the transfer, takes a commission, and it may take days to transfer the

[04:07] money, and it also has to approve the transaction. Bitcoin is here to tell you why you need a middleman in the first place? Bitcoin operates on a decentralized network; no single person controls it. There are no banks, no intermediaries. Anyone with a wallet can send money to anyone else with a wallet, anytime,

[04:20] anywhere. Transactions are completed in minutes. Now imagine if everyone decided to abandon banks and switch to Bitcoin. Banks would go bankrupt. Banks fund governments, and governments rely on banks to implement their economic policies. This isn't just a

[04:34] threat to a service; it's a threat to a system that's over 100 years old. And then there's the taxes and oversight. Governments actually know exactly where your money goes. When you receive your salary, the bank knows. When you buy a car, the land registry knows. When you transfer money to someone, every

[04:49] transaction is recorded somewhere. Why all this? Simply put, for security, taxes, and to control money laundering. And here's something we need to be honest about: Bitcoin offers complete transparency on the blockchain. Anyone can see any transaction that happens on the

[05:03] blockchain, but names aren't visible. What is visible are wallet addresses and the dot, which makes tracking transactions more difficult for governments. Governments claim that the dot opens the door to money laundering, financing terrorism, tax evasion, and so on. But in reality, the same

[05:17] can happen easily with cash, which is regular paper money. No one can know how people spend or do with the cash they have because there's no mechanism to track where that money went or who it ended up with. So, I see no logic in the

[05:31] accusations leveled against Bitcoin; it's simply a matter of control. Now, let's move to a higher level and talk about the dollar. The US dollar is the dominant currency in the world. Almost all global trade is conducted in dollars. Oil is sold in dollars, and global commodities are also sold in dollars.

[05:45] dollars. Oil is sold in dollars, and global commodities are also sold in dollars. America, unfortunately, is economically and militarily powerful, and because The world is almost conditioned to trust the dollar. This advantage practically gives America enormous power, allowing it to print dollars and export them to

[05:59] the world. This gives it the power to impose sanctions on countries, cut them off from the global financial system, and control countries through economic manipulation. So what does Bitcoin have to do with all this? Bitcoin is actually a global currency not affiliated with any country. If two countries

[06:12] decide to trade with each other using Bitcoin, they won't need the dollar, the US Federal Reserve, or the SWIFT system, which is controlled by America. So imagine if major countries decided to use Bitcoin or other digital currencies

[06:24] in their trade. The dollar's dominance would weaken, and American economic power would diminish. This is n't just a threat to a central bank; it's a threat to the entire global system. So, if you were in the position of the American, Chinese, or European governments and saw that the global financial system

[06:37] might be shaken, what would you do? Of course, governments won't just sit idly by. Governments aren't asleep at the wheel. When they sensed the wave was coming, they started thinking about how to have it both ways. How to take all the technological advantages that threaten their power and eliminate the one thing that scares them: how to

[06:52] create our own Bitcoin, where only we hold the key. More than 137 countries worldwide have found the answer, and that's where things get really interesting. Governments saw that the blockchain technology behind Bitcoin is very powerful and they don't want to lose it, but at the same

[07:06] time, they don't want to lose control. So, the solution they came up with was central bank digital currencies ( CBDCs). Simply put, these are digital currencies, but instead of being decentralized like Bitcoin, they are completely centralized. The central bank issues them,

[07:20] controls them, and monitors all transactions. Now, dozens of countries are working with CBDCs. Take China, for example. The digital yuan, the UAE has the digital dirham, Europe is working on the digital euro, and many other countries are on the way. This is simply

[07:33] because governments want all the advantages of blockchain without its biggest drawback: decentralization. In the world of CBDCs, the government will see all transactions, be able to freeze your money with the click of a button, set an expiration date on your money, and even prevent you from buying from a

[07:47] specific location. This isn't science fiction; it's unfortunately being developed right now. Bitcoin is the direct antithesis of every remedy. Let me now summarize what distinguishes Bitcoin and why it's a real challenge for governments. First, decentralization: there's no central server or person in charge, and the network is

[08:02] distributed across thousands of computers worldwide. To stop Bitcoin, you'd have to stop it on every single one of those computers, which is practically impossible. Second, scarcity: only 21 million Bitcoins, and it wo n't increase. This goes against the philosophy of paper money, which can be traced endlessly. And third...

[08:16] Transparency is key; every transaction is recorded on the blockchain, and anyone can see it. Fourthly, Bitcoin has no geographical boundaries, meaning you can send Bitcoin to anyone in the world in seconds. There are no customs, no borders, and no intermediary banks. Fifthly, and most importantly, is ownership.

[08:29] When you put Bitcoin in a personal wallet, you are the true owner. No bank can freeze your account, and no one can confiscate your money without accessing your wallet. Each of these five aspects is a direct challenge to governments. Now, I must tell you

[08:44] something important: Bitcoin is not a magic solution, and there are real risks. Price fluctuations are extreme. One day Bitcoin might increase by 5%, and the next it might lose 10%. This is obviously not suitable for everyone. If you don't monitor your wallet properly, you could lose all your money. Even if you forget your

[09:00] wallet password, you'll still lose your money. The electricity consumption for mining is also very high. Why the environmental impact? In short, governments have concerns, some legitimate, like protecting investors, preventing crime, and ensuring financial stability. But there's a huge difference between a country that regulates and provides a

[09:13] legal framework and one that completely bans it. Countries like Japan, Singapore, Switzerland, and Dubai adopted Bitcoin regulation instead of banning it, resulting in massive investments, innovation, and jobs. Other countries chose banning it, resulting in black market activity and significant lost economic opportunities. Now,

[09:27] after all that, let's return to the original question: why are governments afraid of Bitcoin? The answer can be summarized in one word: control. For the first time in history, there's a global financial system not controlled by a single country, bank, or company. Bitcoin has become an

[09:41] existential challenge to the model the world has been accustomed to for over 100 years. And that's all for now. Peace.