When I first heard of Bitcoin, it sounded like something out of a dystopian sci-fi novel. Digital, cryptographic, uncensorable money? It seemed such a radical idea, it couldn’t possibly belong in this decade.
But if it did — if Bitcoin were to go mainstream — I was convinced it would lead to a massive geopolitical disruption, shifting the power relations between governments and their citizens. It would mean investing into Bitcoin would be like funding a revolutionary army. It would be so subversive, only a few crazy people would be willing to do it.
Of course, I was wrong about every part of that.
Grandmothers now own Bitcoin. And with a few notable exceptions (namely China and India), world governments have been surprisingly welcoming toward cryptocurrencies. Bitcoin is legal almost everywhere.
Perhaps governments recognize the inevitable growth of blockchain technology and don’t want to stem innovation too early via overregulation. This is plausible: you still hear the echoes of “blockchain not Bitcoin” within the halls of industry, and blockchain idealism has become safe cocktail party conversation.
But this explanation falls short. First of all, we already have blockchains. Further Bitcoin development isn’t likely to contribute to enterprise blockchain deployments. If the purpose of letting Bitcoin flourish was to usher in the age of enterprise blockchains, its job is already done.
Perhaps governments are pattern-matching blockchains with the Internet. A wait-and-see approach to internet regulation was clearly instrumental to its flourishing, and perhaps governments intend to do the same here. But governments have also fought tooth and nail against end-to-end encryption, P2P filesharing, privacy technologies like Tor, and financial networks that enable tax evasion (see e-gold and global financial surveillance policies like FATCA). If Bitcoin threatens the power of financial surveillance, then it would be considered far more dangerous than any of these prior technologies.
In light of these examples, “all innovation is good innovation” doesn’t adequately explain the lax attitudes of governments.