- Today cryptography is used to protect our crypto holdings from intrusion.
- The US develops quantum computer technologies capable of breaking binary cryptography.
- Elon Musk can shift entire crypto markets with a single tweet. Governmental agencies are poised to add quantum computers.
- Currently, countries such as India are considering banning public cryptocurrencies
A cryptocurrency can be regarded as a financial wonderland where timing is everything, and no one can say for sure. Every time you think you’re grasping the market, a billionaire tweets out a meme, and you’re on the verge of something else. The experience may be enjoyable for those who enjoy rollercoasters and thrill rides, but investors who want a less volatile future may wish for one. It isn’t easy to move forward, unfortunately. Bitcoin and Ethereum, two examples of decentralized digital currencies, make perfect sense on paper. My bitcoins are worth a dollar, and even if I have my citizenship revoked by the US government, they are still worth a dollar. The money I have in US markets, bank accounts, and 401K accounts would all be gone.
It should be impossible for any government, cryptocurrency holder, or central authority to revoke your holdings under a genuinely decentralized financial system.
Unfortunately, government agencies are often unable to seize cryptocurrency due to technological limitations. Would that change if it were possible?
Today, the literal cryptography used to protect our crypto holdings from intrusion, theft, and withholding has been confirmed. Similarly, the government shouldn’t be able to access our cryptocurrency holdings since our WhatsApp messages are encrypted.
Due to the decentralized (but well-managed) blockchain platform on which Bitcoin and similar giant cryptocurrencies are built, there’s little chance a government could grab assets once it gained enough of a technological advantage. The Bitcoin platform is large enough for the community to seek support for technology that mitigates the impact of quantum computers, for example, if China or the US develops quantum computer technologies capable of breaking binary cryptography.
However, Bitcoin and Ethereum account for 99.9% of the market. It is impossible to tell what is a scam and a legitimate cryptocurrency if your digital wallet is not protected by cryptography.
Cryptocurrencies that can resist quantum computing attacks from the IRS, FBI, Department of Defense, Chinese military, and anyone else who has the means to build and fund quantum machines may not have a bright future.
Against a tech paradigm like this, only a few Bitcoin-sized walled gardens could survive.
Those who oppose quantum computing cite the fact that it is still in its infancy, but the naysayers may not know where the technology is at when it comes to where we are.
Speculating that proper quantum cryptography systems are likely to be fully functional before 2050 doesn’t seem to be a gamble.
For people who wish to hold crypto-only because it’s decentralized, governments seizing cryptocurrency will be a problem as it’s easier than confiscating people’s cash or freezing their accounts.
However, it is theoretically possible for whales to gain even more advantages by essentially becoming “the house” when only a few cryptocurrencies are available.
As an example of how Elon Musk can shift entire crypto markets with a single tweet, he has the power to influence the followers of crypto enthusiasts with his position and popularity.
However, today’s market does appear to be in some equilibrium. Thousands of cryptocurrencies competing for the same market share as DogeCoin ride Elon’s wave of emotions.
It may sound flippant, but if you’re one of those thousands of people who’ve made Lambo money out of nothing but a few hundred dollars, a cryptocurrency trading app, and a Reddit account, then you probably don’t care.
There is plenty of money to be made by all investors in the current crypto market, whether they’re guppies or whales, as long as they stick to short-term financial gains.
Governmental agencies are poised to add quantum computers, however, which could transform everything. At the end of the fiscal year 2020, the IRS seized more than 90% of the funds held in cryptocurrency, and the agency expects that number to continue to rise in the upcoming fiscal year 2021-2022.
Countries such as India, whose policy of banning public cryptocurrencies is currently being considered, and China, where all cryptocurrency activities have been banned, would likely seize crypto-assets wherever and whenever possible.
Even decentralized coins in marginalized markets will be artificially centralized if only the largest cryptocurrencies survive government seizure and manipulation.
Albert Einstein described the strange machinations of quantum physics with the term “spooky action at a distance.”. Interestingly, this sentiment relates to cryptocurrency as well.
A majority of coins cannot imagine what five minutes will look like in the future. It is impossible to predict what the field will look like 30 years from now. The actors holding a whale position in the fiat market (such as the US government and Elon Musk) are unlikely to give up their place anytime soon. The outcome depends on their reasons for cornering the crypto market or splintering it.
Cryptocurrency supporters should urge the teams and communities behind legitimate coins to take action now to secure the future through decentralization.
The following 30 years of technology breakthroughs will not prove to be as eventful as the last 30 because IBM and Google are awaiting their quantum computers to appear on Amazon before they begin selling them. That would be a huge risk considering Bitcoin wasn’t invented 30 years ago.