Why Cryptocurrencies Bitcoin are Banned in Some Countries? – Cryptocurrency refers to a virtual currency that one can use to buy services and goods. It is essentially a mode of exchange like money. It ensures that financial transactions made are safer because they use strong encryptions that help monitor asset transfer and track the output of additional units.
Bitcoin uses a decentralized monitoring system, unlike normal currencies that are regulated and centralized.
According to crypto 101 by SoFi, some of the different types of cryptocurrencies include Bitcoin, Litecoin, Etherum, and Bitcoin cash. Bitcoin is the first and most prevalent cryptocurrency.
History of Cryptocurrency
The cryptocurrency was started by Nakamoto Santoshi(An individual or group of individuals who created the first bitcoin). They released a white paper called bitcoin, which is a peer-to-peer electronic cash system, in 2008. Bitcoin came into the cryptocurrency market in 2009.
In 2010, 10000 bitcoins were exchanged by its owner for 2 pizzas. The bitcoins would be of high value right now if the owner still had them.
The cryptocurrency market has been growing daily as it is high in demand, everyone is trying to get their hands on them.
Disadvantages of Cryptocurrencies
Some of the disadvantages of cryptocurrencies include:
- Huge risks are a likelihood as huge investments are involved.
- Some countries consider bitcoins and other cryptocurrencies as outlaws since the financial institutions and the government can’t regulate or control them.
- Cryptocurrencies have made cyber-terrorism thrive as it has eased the transfer of payments.
- Cryptocurrencies have threatened to surpass traditional banking institutions. Transactions that can take place outside normal banking systems can be carried out by anyone making it hard to track the transaction.
- The cryptocurrency market has attracted people and criminals who are interested in laundering money and evading tax.
- There is a huge risk of violation of laws against countering the funding of terrorism and money laundering.
Why are Cryptocurrencies Banned in Some Countries?
Some countries have banned cryptocurrencies due to religious reasons, Saudi Arabia outlawed bitcoin, saying it goes against the Muslim law.
Iceland forbade it to shield itself from too much money leaving the country, and the Bolivian government forbade it because it couldn’t control it.
Since it is hard to categorize cryptocurrencies for taxation purposes, some countries decided to do away with cryptocurrencies altogether.
Some of the countries that have banned bitcoin include Pakistan, Qatar, Algeria, Afghanistan, Vanuatu, Bolivia, Saudi Arabia, Bangladesh, Vietnam, Nepal, Ecuador, and Macedonia.
According to the experts at SoFi, to store crypto securely, an investor needs to use a crypto wallet, a software program for managing the assets. But even if you have the software you trust, you will be relied on to store and remember and secure a password that only you know. This is frequently an issue with crypto, as people who forget their passwords essentially have had their assets stranded.’
The governments issued notices about the dangers of investing in cryptocurrencies. The warning was to inform the public of the differences between cryptocurrencies and actual currencies. The warning also highlighted the possibilities of increased illegal activities.
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