Bitcoin is regarded as a threat to the global financial establishment and thus it has become the target of prosecution by multiple parties. Once hailed as a “Tool of the People” for its ability to bypass costly intermediaries and allow for P2P transactions. Bitcoin is under heavy attack in what appears to be an all out effort to discredit it out of existence. It is a paradox with capitulation on one end and expansion on the other. Despite its potential to digitize world economics, it is evident that there is a concerted attack by the media, the banks, and the government to prevent it. These special interest groups manipulate negative narratives against its use, technology, profitability and legality.
A number of prominent figures in the financial, economic, an political fields repeatedly dismiss Bitcoin’s usability. Their shared opinion is that Bitcoin is of little practical use and instead it is a tool for speculative trading and fraud. Former Israel’s Prime Minister Ehud Barak reinforced this portrayal by calling Crypto currencies a “Ponzi scheme” yesterday. His statement joins the multiple reports released throughout the year of 80% ICO failure rates and unrealized blockchain projects. The message is suspiciously timed with an attack on Bitcoin’s Proof-of-Work consensus mechanism.
The longstanding argument of Bitcoin’s uses for illicit activities is expanding to include the use of its mining software. In a recent cybersecurity conference in New York, earlier this month, Troy Kent, a Threat Assessor with Awake Security warned about the alternative use of cryptoming software. He stated that hackers could use software like Bitcoin miner, BTCminer, CGminers, etc, to decipher corporate secrets and gain access to sensitive data or control of services.
The basis of his arguments derives from the extended computational power and algorithmic programs that the software uses. Both of which form the encryption and decryption mechanism of Bitcoin.
Professor Atuya Sarin of Santa Clara University wrote in a column for MatketWatch that Bitcoin is entering a “Death spiral.” That is the point where it’s price will descend to zero due to its cost to mine is higher than its value. And due to persistent shorting position investors. In addition, critics cite the 15% drop of the Bitcoin Network difficulty and the 30% drop in hashrate. Both are indicators that a significant number of miners is leaving the space. Miners are crucial in maintaining network security. A reduced number of them makes the network vulnerable to a 51% sybill attack.
The Office of Foreign Assets (OFAC) has joined the SEC in enforcing violation of US laws by foreign operators. In this case, anyone using crypto currencies to circumvent sanctions imposed by the US government. In a clear show of force, OFAC identified and sanctioned two Iranian individuals Bitcoin addresses in relation to cyberattacks against US networks.
This is the last and a very powerful predator to join the hunt against Bitcoin. While not directly aimed at destroying Crypto currencies, its global reach and merciless enforcement will undoubtedly affect the market further.
Sensing weakness, Bitcoin’s enemies are launching a targetted offensive in an attempt to neutralize the crypto ecosystem. Taking advantage of investor’s loss of confidence, special interests press harder the idea that Bitcoin is in its death throes. However, the reality is that Bitcoin’s design accounts for all of this opposition.and adapts accordingly. Its network difficulty adjusts to maintain an equilibrium of profitability. Even if the price falls to zero, miners can go back to using CPUs until it’s profitable to use ASIC miners again. And enforcement will only create a more stable line up of verified operators.
The truth of the matter is that Bitcoin’s use is undeniable. And the real reason behind these attacks is to clear the path for institutional investment to build a crypto space of their own. One complete with new derivatives trading assets and conveniently regulated to their favor. For the moment, the tables have turned and Bitcoin is temporarily not a threat but a target to be destroyed or captured.