Harvard Professors Predict Bitcoin Collapse Due to Government Regulation
According to some Harvard economics professors, Bitcoin will eventually be destroyed through the weight of government regulation. Professor Kenneth S. Rogoff believes that the risk of financial anonymity will eventually create an environment where regulation would crush Bitcoin. He said:
“Small anonymous transactions with virtual currencies…would be desirable but large-scale anonymous payments would make it extremely difficult to collect taxes or counter criminal activity.”
The perspective is shared, though in a different vein, by the counterpart, Jeffrey A. Miron, whose Libertarian perspective makes him more lassez-faire. Nevertheless, he believes that central governments will eventually drive the technology out of existence. He said:
“It [government] could let cryptocurrencies peacefully exist, and not accept them as a means of payment, and that’s what I think it should do. But my guess is that sooner or later governments are going to regulate cryptocurrencies out of existence.”
The potential for government regulation is certainly real, as multiple nations have limited access to or exchange of Bitcoin and other cryptocurrencies. China famously banned ICOs (initial coin offerings) and has restricted Bitcoin exchange access.
It should also, of course, be remembered that Bitcoin is by no means anonymous. Users routinely make mistakes which weaken or eliminate Bitcoin’s psuedo-anonymity. As Cointelegraph has previously reported, the IRS has engaged the services of Blockchain analysis firm Chainalysis to help them tax cheats who don’t report their Bitcoin profits.