Cryptocurrency is a very hotly debated topic. Some hail it as the true savior of the complicated, flawed world of modern finance, but others are calling for its complete ban. The latter group has recently been gaining traction, particularly with a recent article in the Wall Street Journal. So, what is the argument that supports the complete ban of cryptocurrency? Crypto
A Pernicious Epidemic
One of the biggest epidemics hitting the business world is the problem of ransomware. This is huge news recently, as a series of ransomware attacks have in the past six months alone caused significant issues with massive impacts – including causing the price of oil in the US to increase (the Colonial Pipeline hack disrupted the oil supply chain in North America) and Irish hospitals to have to go analog and operate without the use of any computers.
Ransomware attacks aren’t going away. Last year, ransomware cases increased by 66% and it is estimated that victims paid out over a third of a billion dollars to avoid the negative repercussions of attacks.
Who is being targeted?
There tend to be two victims: huge companies who can fork out a lot of cash (especially those with large computer networks, as these will cost more to rebuild than just to pay the hackers) and companies that think they’ll never get targeted and are effectively low hanging fruit. It is a natural human bias to think that negative events are less likely to happen to you, but SMEs are some of the most targeted entities for ransomware. They will likely not have managed IT services from the likes of 24×7 IT Solutions, which take care of maintenance issues and watch a network for irregularities, reducing vulnerability to hacks, and in many cases won’t even have basic cybersecurity awareness.
So What’s This Got to Do with Crypto?
Simply put, ransomware would not be able to exist if it weren’t for cryptocurrency. In the old days of hacking, hackers would need to set up shell companies that can be shut down when traced, but this always leaves a trail. The existence of currencies like bitcoin that can easily be laundered, or just transferred into Monero (effectively untraceable), has caused ransomware attacks to skyrocket with impunity. There are even reports that entire states use crypto to send out ransomware for the purpose of funding activities like nuclear programs.
Many argue that cryptocurrency doesn’t actually provide a benefit that isn’t anonymity and making some fast cash, whether that is through selling illicit substances on the deep web or speculating on highly volatile markets. It doesn’t actually increase efficiency or reduce transaction costs, and cryptocurrencies can be very difficult to obtain for some people.
So should crypto be banned?
That is up to you to decide, but perhaps the strongest argument against the banning of crypto is that it is incredibly useful for countries that need a reserve currency. The dollar is slowly losing its foothold as a global reserve currency and, though something like Bitcoin is volatile, it doesn’t need the approval of another state to be available in huge quantities. It is not centrally controlled and, therefore, provides more theoretical freedom, which is why a country like Venezuela has started to see the increased use of Bitcoin in the day-to-day lives of its citizens.