Why can’t Bitcoin be traced (Why can’t Bitcoin transactions be regulated)?
Why can\’t Bitcoin be traced? Let\’s go back to 2012. In a transaction in 2009, an
Why can’t Bitcoin be traced? Let’s go back to 2012. In a transaction in 2009, an address purchased 10,000 BTC for $1 million per second. At that time, it was worth around $100 million, and now it has reached a staggering 10 billion BTC. That’s an amazing 200% increase – and still rising! So, what is blockchain? To understand what blockchain is and how it works, let’s take a look at its purpose:
Firstly, you need to understand on-chain data and use it as evidence to find anything meaningful. This means you will be able to view the Bitcoin network history or analyze the history of Bitcoin. Without this information, you cannot create any new information. Therefore, you can access all the relevant information about the asset.
However, unlike other cryptocurrencies, Bitcoin is not marked as “inactive” like most other cryptocurrencies. “The only source of Bitcoin is a wallet.” Despite this, it still has some security risks. For example, one of the biggest flaws of Bitcoin may be its lack of verifiable signature function. While many people consider it to be decentralized, it is actually impractical: “Bitcoin has never really had the basic skills of private keys, cryptographic codes, etc. So when you use a technology, you have to know how Bitcoin came about.” The main use case of Bitcoin
By leveraging blockchain technology to solve this problem, we are seeing the applications of Bitcoin continuously evolving. Over time, more and more developers are starting to improve the benefits of this emerging technology. However, Bitcoin also faces two major problems: anonymity and high cost. For those who want to become cryptocurrency experts, Bitcoin is not a good choice because they want to have more funds to establish their own business models.
It is important to achieve this goal because people often ask if Bitcoin is trustworthy. The answer may be a bit complicated. Of course, this is just a theoretical solution because there are not enough methods currently available to make users trust it.
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Why can’t Bitcoin transactions be regulated?
Why can’t Bitcoin transactions be regulated according to US government regulatory agencies?
US Federal Judge (R.C.) stated that Bitcoin does not comply with monetary policy due to the lack of a clear legal framework and procedures to protect individual investors from illegal activities such as money laundering. Therefore, there are two reasons why Bitcoin does not comply with monetary policy: the use of encrypted assets for anonymous transfers as a means of value storage and the unacceptable practice of storing digital cash in the network.
If these virtual currencies are to be exchanged for fiat currency and converted into legal tender, approval from the Federal Reserve and other financial authorities is required to complete the process. However, this is not the main reason why not all banks have to do this. Because blockchain can solve the problem of information asymmetry and make payments easier and safer for cross-border payments, reducing costs.
However, unlike traditional electronic transfers, digital currencies have decentralized features that do not require central management agencies or intermediaries and are fully owned by users themselves. “We cannot control this phenomenon, as its existence makes it difficult to avoid criminal activities.” Brian Brooks, Chairman of the Office of Foreign Assets Control (OFAC) of the US Treasury Department, recently told the media, “When you transfer money from one place in one country to another place in another country, you will find that your funds can be sent out via the internet.” He added, “People often ask: Is Bitcoin a currency or an investment? Does Bitcoin belong to a medium of exchange?”
According to the Goods and Services Tax Act, anyone providing Bitcoin services can report what they buy and sell to regulated entities. The law also prohibits exchanges from selling securities or broker stocks for profit or other fees, including sales to specific entities. In addition, for companies holding cryptocurrencies, purchasing these securities may result in criminal penalties. (Coindesk)
So why can’t US regulatory agencies take a tough stance on it?
On the one hand, this is because the cryptocurrency industry in the United States is still in its early stages and lacks sufficient evidence support, and on the other hand, it is also because countries around the world are trying to find alternative solutions to cope with regulatory difficulties. For example, the Governor of the Bank of England, Bailey, has stated that CBDC can drive the modernization of the financial system in the short term. However, there are also factors that have affected the Bitcoin market – for example, the US Congress is working on legislation to allow stablecoins to enter the circulation scene, while considering the global nature and use cases of Bitcoin, so some stablecoin projects have begun planning their own experimental plans. On the other hand, as time goes on, more and more traditional institutions are exploring how to use it as a trusted store of value – Bitcoin.
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