Donald Trump claims Bitcoin 'seems like a scam'
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The warning came from Billy Bambrough, who regularly writes about crypto for Forbes. Over the past year the value of Bitcoin soared, climaxing at over $60,000 per coin in April before falling back to $31,000.
Speaking to Express.co.uk, Mr Bambrough warned its value could fall dramatically if nation states make a concerted attempt to suppress the currency.
Asked whether Bitcoin is vulnerable to government pressure he replied: “I think very vulnerable in a practical sense.
“The power of the state still comes from the threat of imprisonment or physical harm.
“If a government or state wanted to stop people using Bitcoin they would say anyone who uses Bitcoin is going to get arrested and people would stop using it.
“If the threat from the state was significant enough it would deter people from using Bitcoin.
“There is a very good possibility that governments around the world decide that Bitcoin should no longer exist and they work together to make it a highly punishable offense to run a Bitcoin node, which is hooking your computer up to the Bitcoin network, mining Bitcoin, which is directing processing power towards the Bitcoin network, or trading Bitcoin.
“If doing any of these three things came with significant time in jail then people would just stop using it and the distribution of the Bitcoin network would shrink and shrink and shrink and so it wouldn’t be so decentralised, and it wouldn’t be as incorruptible or unhackable, and eventually it would get hacked and the value of Bitcoin would fall to zero.”
States around the world have adopted very different policies towards Bitcoin and other cryptocurrencies.
El Salvador recently announced it will make Bitcoin legal tender from September, the first country to do so.
However the currency’s value took a hit after China launched a major crackdown on Bitcoin mining.
Mr Bambrough downplayed the likelihood of a coordinated state attack on Bitcoin.
He commented: “I do think there is a possibility this could happen. The likelihood of it happening seems relatively low because there are different countries that are interested in Bitcoin in different ways.
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“China we’ve seen doesn’t particularly like people doing things with Bitcoin that it can’t manage, control and regulate very tightly.
“Other countries like El Salvador are interested in allowing Bitcoin to flourish.
“So if Bitcoin gets chased out of China it’s likely just to go somewhere else.”
Some states are considering launching their own central bank-controlled cryptocurrencies.
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The Bank of England has been looking into starting a currency, nicknamed ‘Britcoin’.
Mr Bambrough argued a central government attack could sharply reduce Bitcoin’s value, even if it isn’t destroyed entirely.
He said: “There is this chance that a crackdown by governments will weaken Bitcoin and potentially send the price significantly lower.
“I think it’s unlikely it will kill Bitcoin entirely.
“Bitcoin will always manage to hold on and stick around, but potentially at a much smaller price and level of distribution than it currently has.
“There’s a good possibility that something like this could happen.”
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