Since shortly after its invention, cryptocurrency has had the attention of central bankers and government regulators all over the world. Without the slightest hint of self-reflection, they have repeatedly warned that Bitcoin, Litecoin, Ethereum, Ripple, and all the rest may be scams or tools to be used by terrorists, drug dealers, money launderers, and other ne’er-do-wells. Several countries have either considered cracking down on crypto exchanges or have already done so. Sometimes satire just writes itself; the fiat currencies that they create and inflate are far more commonly used in the criminal underworld, not to mention the criminal overworld that they run. Speaking of scams, currencies that lose 95 percent of their value over a century have proven quite effective at snatching the wealth out of people’s pockets without them even knowing it.

But perhaps the politicians and legacy financiers are on to something with their desire to ban cryptocurrency. Let us see how government efforts to ban crypto could actually strengthen crypto and do themselves in, and thus why one might agree with statists for the wrong reasons.

If cryptocurrencies are banned, they will not magically disappear, nor will many of the people who use them stop doing so. After all, did bans on drugs or guns ever eliminate those? Of course not; both are more common where they are banned than where they are legal but heavily regulated. Cryptocurrencies perform valuable services for people, and that which has a demand will have a supply. If this cannot happen legally, then it will happen illegally, as with any other commodity. States are good at destroying other centralized entities, but disrupting a decentralized system with no clear point of attack has never been their strong suit. Just look at how much copyrighted material is illegally available online. States cannot stop it because every time they arrest someone, seize a server, or shut down a website, dozens more pop up to replace them. So it would be with cryptocurrencies and sites that accept them. Showing such bans to be ineffective will be an important propaganda victory for crypto users, as will the very fact that it was tried. For why would the state and its central bank have to ban competitors unless their money was too inferior to compete?

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