{"id":150897,"date":"2021-12-04T20:09:50","date_gmt":"2021-12-04T14:39:50","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=150897"},"modified":"2021-12-06T10:11:56","modified_gmt":"2021-12-06T04:41:56","slug":"the-tech-holes-that-ensure-that-crypto-can-never-be-effectively-banned","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-tech-holes-that-ensure-that-crypto-can-never-be-effectively-banned\/","title":{"rendered":"The tech holes that ensure that crypto can never be effectively banned"},"content":{"rendered":"\n

News<\/strong>: Experts have stated that it is not possible to enforce an effective ban on cryptocurrency in a foolproof manner.
\n<\/span><\/p>\n

Why banning Cryptocurrency is not possible?<\/h5>\n

Peer to Peer networks<\/strong>: Users can always transact using peer-to-peer networks. This is exactly what happened in India post RBI’s restrictions on Indian banks in 2018.
\n<\/span><\/p>\n

Defi platforms<\/strong>: Users can trade or transact in Crypto via Decentralised finance (Defi) platforms. These platforms can be used without any intermediaries like banks or standard cry\u00adpto exchanges. User sign-ups are completely anon\u00adymous<\/strong> on these platforms, without any identity markers like name, email-id or location.<\/span><\/p>\n

Banning ports would lead to unintended consequences<\/strong>: One way to block these DeFi platforms and cryptos would be to ban the ports, which are the interfaces that allow computers to communicate regarding a software with each other. But this would mean blocking other genuine software that use a particular port. For instance<\/strong>: Port 8333 is used by Bitcoin, but also by cloud computing major VMware.<\/span><\/p>\n

Exchanges can move abroad<\/strong>: The simplest option for a ban is to block local crypto exchanges in the country. In that case, the exchanges would move abroad and attract users through virtual private networks (VPNs).<\/span> It would just reduce the government\u2019s ability to track and tax transactions. There will be money laundering and scams.<\/span><\/p>\n

A ban on crypto in India would not stop people from amassing such assets in other jurisdictions.<\/strong> For example, a crypto user giving freelance services to a company abroad, can take the payment in crypto. His Crypto assets could sit in the foreign jurisdiction untouched until they are traded in INR transactions in India.<\/span><\/p>\n

Also, as per Financial Action Task Force re\u00adcently issued Guidance on Virtual Assets and Virtual Asset Service Providers<\/strong>, the proliferation of these instruments req\u00aduires accommodation in any go\u00advernance model.<\/span><\/p>\n

What have been the implications of a blanket Crypto ban?<\/h5>\n

At present, two countries have banned Crypto: Nigeria & China, and both have failed at curbing their usage.<\/p>\n

A ban only boosts adoption of Crypto<\/strong>: In countries where a blanket ban was imposed, it eventually resulted in an even greater adoption of Crypto. For instance<\/strong>: Nigeria & China
\n<\/span><\/p>\n

– Nigeria<\/strong>: Nigeria\u2019s central bank curbed local banks from working with cryptocurrencies in February 2021. It warned of severe regulatory sanctions and freezing accounts of companies and users using them. But a Reuters report in October said that crypto adoption in the country increased<\/strong> following the ban.<\/span><\/p>\n

– China<\/strong>: In May 2021, China first cracked down on crypto mining operations in the country and then followed it up with a blanket ban on all crypto related activities, including trading, in September. But, there has been an increased activity on decentralised finance (DeFi) platforms.<\/strong><\/p>\n

Why Defi platforms cannot be banned?<\/strong><\/h5>\n

Unlike crypto exchanges like CoinSwitch Kuber, WazirX or CoinDCX that are based on the respective servers of the companies, decentralised platforms are not controlled by a single server or group of servers. <\/span><\/p>\n

They are like distributed peer-to-peer networks<\/strong> that are run by computers across the globe. This means that there is no single point of failure<\/strong>, meaning shutting down a few computers would not lead to blocking access for others.
\n<\/span><\/p>\n

Source<\/strong>: This post is based on the article \u201cThe tech holes that ensure that crypto can never be effectively banned<\/strong>\u201d published in Business Standard<\/strong> on 3rd Dec 2021<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

News: Experts have stated that it is not possible to enforce an effective ban on cryptocurrency in a foolproof manner. Why banning Cryptocurrency is not possible? Peer to Peer networks: Users can always transact using peer-to-peer networks. This is exactly what happened in India post RBI’s restrictions on Indian banks in 2018. Defi platforms: Users… Continue reading The tech holes that ensure that crypto can never be effectively banned<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[2786,10503,2498],"class_list":["post-150897","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-blockchain","tag-business-standard","tag-cryptocurrency","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704933538},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/150897","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=150897"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/150897\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=150897"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=150897"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=150897"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}