Bitcoin under threat?

MUMBAI, INDIA: Bitcoin which took the market by storm is under threat.

According to a new report by Frost & Sullivan (F&S) titled, Dark Markets: Anonymity in Bitcoin, the crypto currency is under threat from government regulations namely compliance and surveillance.

Contextually in case of the first instance, even though Bitcoin allows anonymous transactions (being linked only a pseudonym), by using a purely digital, regulators can actually view the entire transaction history via blockchain analysis (a means of looking at transaction metadata).

Secondly, in lieu of the constant terrorist attacks globally, the governments fear that encryption and anonymity should be limited at this juncture.

Such efforts could prove disastrous for Bitcoin if they succeed, wrote Vijay Michalik, Research Analyst, Digital Transformation, F&S, in the research note cautioning that increasing scrutiny and regulation related to security concerns could derail the Bitcoin.

Going forward, this should be a serious concern, because as the means of blockchain analysis improve, Bitcoin could eventually become a worse option than traditional finance channels, he said.

Michalik said that while Bitcoin could be a tool for transformation of business and finance, excessive regulation or de-anonymization would stunt its growth irrevocably.

Do you approve of government interference in such cases?