Potential Threat- Government Action: Following Pavel Durov’s arrest for failing to prevent crime on Telegram, cryptocurrencies could be the next target.- Political Claims: Politicians claim that cryptocurrencies facilitate criminal activities such as terrorist financing and money laundering. Potential Government Strategies- 51% Attack on Bitcoin:- Mining Pools: Two mining pools control more than 50% of Bitcoin’s mining power.- Consolidation: Mining pools consolidate computing power, share costs, and increase reward opportunities.- Chainalysis Report: Lazarus and scammers use mining pools to mix illegal funds with legitimate mining rewards to launder money. Practical Challenges- Impossibility of a 51% Attack:- Computing Power: Significant computing power and coordination are required.- Expert Opinion: Andreas Antonopoulos, author of Mastering Bitcoin, explains why nation states can no longer effectively use Bitcoin. Strict regulatory crackdowns – Privacy coins under attack:- Arrests: Tornado Cash founder and Samourai Wallet CEO/CTO arrested for money laundering.- Bans: Countries like Japan, South Korea, and the UAE have banned privacy coins like XMR and ZEC. The EU is considering a similar ban.- Consequences: Delisting from centralized exchanges (CEX), reduced liquidity, lower adoption rates, and difficulty cashing out to fiat currencies.Case Study: China - Comprehensive Ban: - 2021 Ban: China declared all cryptocurrency transactions illegal, banning trading, mining, and related financial services. - Impact: - Declining hashrate: A nearly 50% drop in the computing power of the Bitcoin network. - Recovery: Computing power recovered quickly as mining operations moved to other countries. - User adaptation: Users in China used small rural commercial banks to buy cryptocurrency through gray market traders, setting a limit of $7,000 per transaction to evade scrutiny. Current Situation in China - Over-the-Counter Trading: Chinese individuals use over-the-counter trading on platforms like OKX and Binance and open accounts in Hong Kong. - Impediment to Development: The ban continues to impede crypto development in China, despite its large population. - Change of Attitude: Recently, China’s stance on cryptocurrencies appears to be shifting toward a more open approach, which is a positive sign. Threat of Self-Hosted Wallet Ban - A Big Blow: Banning self-hosted wallets would be a major setback. - Centralized crypto exchange reaction: It may Centralized exchanges (CEX) only interact with regulated custodial wallets, limiting the use of self-hosted wallets. - Loss of financial sovereignty: Users will be dependent on third parties who can freeze accounts.- Global cooperation needed: Effective bans require global cooperation; otherwise, users will move to regions where no such bans exist. - EU concerns: Despite concerns, the EU did not ban self-hosted wallets this year. Another effective ban - Operation Chokepoint 3.0: A simpler, more effective ban could be implemented. Worst case scenario: US bans cryptocurrencies - Complete ban: The US could ban holding cryptocurrencies entirely. - Convert to USD: Citizens could be forced to convert cryptocurrencies to USD, with penalties for non-compliance. - Bank restrictions: Banks would ban cryptocurrency transactions and report suspicious activity. - Global oversight: Increased international oversight and cooperation could lead to a ban. - Introduction of central bank digital currency: The US could introduce a central bank digital currency (CBDC) as an alternative. Historical context: The 1933 Gold Ban- Gold Ban: In 1933, the United States banned private ownership of gold.- Limited compliance: Only 20% to 25% of privately owned gold was surrendered.- Value effect: The value of the US dollar against gold fell by more than 40%, and the price of gold rose from $21 to nearly $35 per ounce.- Increased wealth: Those who held gold saw a significant increase in wealth. Possible outcomes of a cryptocurrency ban- Economic control: A ban could be driven by critical economic control issues.- Market impact: Such a ban could cause prices to collapse and drive the market underground.- Bitcoin resilience: Despite a ban, Bitcoin will continue to produce blocks and exist as a government-free haven. #BinanceBlockchainWeek BinanceBlockchainWeek #Binance CryptoBan#Government#BTC#CryptoMENAThe end of crypto markets = the end of online markets due to lack of trust in them. Then go take a mat and go sell potatoes because your work is done, O client of financial funds