It has been taken for granted by most of us over the years that wider and wider adoption of various crypto can only benefit crypto holders as the price of our holdings goes up and work towards a more free and convenient world. But what if we have left out some fundamental factors and our sloppy analysis proves to be anything but true? First, let's remove the misconception that more users lead to a higher price. Think of the times BTC was growing in price. Every time that happens the media buzz draws people in and for various reasons, the network gains investors, speculators, proponents and other holders, who then either choose or are forced to stay after the inevitable crash. We see then that the ever higher price draws in users, rather than an increase in users that ramps up the price. But this observation is neither here nor there when it comes to the main issue with popular crypto adoption.
The Bitcoin network is not anonymous, but pseudonymous. Every transaction can be traced and analysed. The more identities are tied to addresses or groups of addresses the easier it is to pinpoint an entity and establish its connections. With the steady rise of users, legislators have moved towards requiring KYC practice, meaning that we may wake up in a reality where law enforcement or other unjustified, malicious actors will be able to identify most crypto holders by looking at their picture where they hold up their passport. Sounds dystopian enough? Now consider a ban on BTC ATMs which still operate without KYC in some jurisdictions and a further ban on some privacy-minded crypto like Monero. Most people would comply, leaving those who deal with those 'illegal' activities more vulnerable, since they would lack the obscurity of numbers. Finally, states would be able to indiscriminately tax crypto mining and all other profit-making operation, so any gains made staking would be diminished by capital gains tax, not to mention some states tax you for investing into an asset and then selling at a profit, regardless of whether those are shares or a rare painting.
The picture that emerges is of a crypto future that makes our promised, chosen, heavenly, liberating forms of currency into the instruments of the same-old-shit system we started with, except perhaps even worse, since a society without cash, using BTC or a similar solution for daily payments could be invigilated to a much greater extent, since those pesky privacy laws would not need apply to the blockchain and surveillance capitalism would move into a hyper-connected phase. All this doom and gloom has been prophesised before, so what makes my post special? The fact that I want to draw your attention to the root of all evil: mass adoption. The more people use a solution the more incentive there is for malicious actors such as states to exploit their position and make unreasonable demands such as preventing anonymous people from buying crypto. This then allows for much greater penetration of any BTC-like crypto network and the application of unjustified laws and taxes to the crypto space. I will write in the future about why exactly state actors have no philosophical or moral right to tax crypto, but for now suffice it to say that those who had no hand in enabling something may not reap the gains of it. Just like in the Ant and the Grasshopper fable, except in this case the Grasshopper (state) arrives armed and forces his way in. There is no happy ending, so to preserve the future of crypto let us be wary of its ubiquitous adoption.
