Is Elon Musk Right In Saying Governments Can’t Destroy Crypto?

The Tesla founder’s statement came amid a crackdown by China on mining of cryptocurrency.

Some investors see cryptocurrency as a great opportunity to eliminate economic disparity in society and others see it as a hedge against inflation. Many others just want to capitalise on the digital currency while it delivers decent returns on investments. With the rapid rise of cryptocurrency, the debate on regulating it is also gaining traction. Authorities around the world are contemplating measures on how to manage the disruption it may cause, and yet its market and user base are growing steadily. Earlier this week, billionaire entrepreneur Elon Musk, a staunch backer of these virtual coins, warned governments against trying to “destroy” cryptocurrency. But he conceded they can slow down its progress.

Cryptocurrency fundamentally is aimed at reducing the power of a centralised government, said Musk, adding that is why “they don’t like” it. The Tesla and SpaceX founder’s statement came amidst a crackdown by China on the mining of cryptocurrency, which is blamed for the current electricity shortage in the country. There is also a consensus that cryptocurrency has the potential to upend the existing financial system, but how true is Musk in saying governments now can’t destroy cryptocurrency.

Given the choices, some countries — like El Salvador — adopted cryptocurrency as a legal tender, while some others are contemplating launching a crypto coin of their own, which national regulators can control or have some oversight.

At one level he appears to be correct. The crypto world is now more than a decade old since Bitcoin, the first virtual coin, came into existence in 2009. And Bitcoin alone has grown exponentially in these years to gain a market capitalisation of $1 trillion. As a whole, the crypto world’s market capitalisation has surpassed $2 trillion. Add to that the growing number of users who have invested real-world money into it.

Elon Musk has said that governments should not think of destroying cryptocurrency

Some investors see cryptocurrency as a great opportunity to eliminate economic disparity in society and others see it as a hedge against inflation. Many others just want to capitalise on the digital currency while it delivers decent returns on investments. With the rapid rise of cryptocurrency, the debate on regulating it is also gaining traction. Authorities around the world are contemplating measures on how to manage the disruption it may cause, and yet its market and user base are growing steadily. Earlier this week, billionaire entrepreneur Elon Musk, a staunch backer of these virtual coins, warned governments against trying to “destroy” cryptocurrency. But he conceded they can slow down its progress.

Cryptocurrency fundamentally is aimed at reducing the power of a centralised government, said Musk, adding that is why “they don’t like” it. The Tesla and SpaceX founder’s statement came amidst a crackdown by China on the mining of cryptocurrency, which is blamed for the current electricity shortage in the country. There is also a consensus that cryptocurrency has the potential to upend the existing financial system, but how true is Musk in saying governments now can’t destroy cryptocurrency.

Given the choices, some countries — like El Salvador — adopted cryptocurrency as a legal tender, while some others are contemplating launching a crypto coin of their own, which national regulators can control or have some oversight.

At one level he appears to be correct. The crypto world is now more than a decade old since Bitcoin, the first virtual coin, came into existence in 2009. And Bitcoin alone has grown exponentially in these years to gain a market capitalisation of $1 trillion. As a whole, the crypto world’s market capitalisation has surpassed $2 trillion. Add to that the growing number of users who have invested real-world money into it.

Even if countries like China try to crack down, people are likely to find ways to enter the lucrative but highly volatile market. This is because the whole system is online, that is all transactions and processes work in tandem on the Internet, using simple gadgets like mobile phones. It would be a difficult task for any government to completely wipe out the crypto trade.

Musk, one of the sharpest minds in the tech business, likely understands this far better than many others and must have weighed in the challenge it would pose to ban cryptocurrency.

The coin, which deems itself “the best rebase token known to man,” operates on the Binance Smart Chain, according to CoinMarketCap, which lists it in the 2,804 market rank position.

Today, the coin was at $0.00002144 mid-morning, according to CoinMarketCap data, which leads some to see it as the next Doge as it has room to grow.

While Flokinomics has been sending several shout outs to Musk on Twitter, he hasn’t yet said anything about the coin.

It’s important to note that there are several Doge knockoffs on the crypto scene, all chasing the same popularity and gains Doge, thanks to celebrity endorsements such as Musk’s. “The risk on these meme coins is quite high,” Garrick Hilleman, head of research at Blockchain.com and a visiting fellow at the London School of Economics, told the New York Post. “There’s a real risk that if the celebrity endorser loses interest or the meme-ability gets out-memed by another coin, you’re in trouble.”

Just last month, Dogecoin, which was created as a joke — its name is a reference to a popular internet meme — said it would be fighting back to reclaim its name, purpose and mission after several other cryptos used some iteration of its name.

The Dogecoin Foundation, a nonprofit formed in 2014 by Dogecoin’s creators and supporters, filed an official claim on the Dogecoin brand name in late August.

“Most believed it’s not worth registering those trademarks because who knows how long this would survive. Now we basically are ruing that a little bit,” Jens Wiechers, a Dogecoin Foundation board member, told The Wall Street Journal.

WazirXWarrior