We still see some with the idea that governments are going to stop cryptocurrency. This is a notion that should be passing as we move further down the road but some still believe in the power of government.

The basis of this article will focus upon two major points:

1. Governments are screwed when it comes to the digital world
2. Cryptocurrency is near infinite (basically limited only by bandwidth and compute)

Here we have the foundation, regardless of what government we are talking about, against them controlling crypto. While there are facets which they can usurp, the entirety of it is impossible.

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Governments Do Not Excel In The Digital Age

The next generation of the Internet (i.e. digital world) is AI. This is one of the basic components of Web 3.0. Just like social media (two way communication) was a major part of Web 2.0, AI agents are going to be the norm.

This is a major problem for governments.

As much as politicians and bureaucrats grandstand, the ability to control what takes place is beyond their reach. The governments do not control any facet of the Internet. Instead, they control companies who are operating and providing services on the Internet.

The example that I default to is Napster. Those who are old enough to remember saw quite a craze taking place. What happened there was basically a simple front end that allowed normies to share files.

Unfortunately, for the record companies, this could be a document, an image, or a copyrighted song. Obviously, the commotion around this was tied to the last part.

Eventually the government stepped on Napster. They also took out other applications like Kazaa and Limewire. Notice how these were the entities.

What they did not stop is the sharing of files. These are peer-to-peer transactions. Data is exchanged between two computers. Software is what allows computers to talk. In this instance, it is direct.

This is similar to how cryptocurrency operates although there are some nuances. With a file between two computers, there is no settlement. When dealing with finance, node operates run software that keeps the ledger updated while also sharing it with others. consensus is what brings everything in agreement, something crucial when dealing with monetary units.

Another point is that cryptocurrency is nothing more than data. It is no different than an image or document. The value it holds in the market will differ but the transfer is simply a data transaction.

When operating on a peer-to-peer basis, governments find themselves cornered. They were designed in a physical world. Everything associated with it stems from physical location. The system has tried to evolve as we expanded globally, with mixed results at best.

The modern day version of Napster are these illegal movie streaming sites. Governments have been battling then for years. If they take out one, 3 more pop up.

Which brings us to the next point.

Cryptocurrency Is Near Infinite

It is tempting to say that crypto is infinite but that would be a bit misleading. There are constraints, specifically bandwidth and compute. That said, both are increasing each year at a significant rate. Of course, these are used for more than just crypto.

Outside of that, cryptocurrency can be viewed unlimited.

How many tokens can there be? This stems from the idea of the number of networks are possible? How many times could Hive be forked into a new network? The same is true for the EVMs, Bitcoin, and Cardano. We also see new ones being created, with different consensus mechanisms.

Money was created to facilitate trade. It was the next step passed the barter system (although a case can be argued that ledgers actually pre-date this).

We are not looking at a government creation. Over the years, it tried to hijack the popular form of money. Of course, business always found a way around it. Throughout the centuries we saw all kinds of things utilized.

In the digital world, it is evident cryptocurrency is stepping up.

With Web 3.0, we are looking at transactions being undertaken and settled in cryptocurrency. I do not believe AI agents are going to use Visa or Mastercard.

Which brings up the issue for governments. How are they going to stop the development of AI agents? They cannot. We already have enough open source software that a variety of applications can be constructed. At the same time, the politicians are still debating what to do (when they are not out campaigning). While this is taking place, new generations of AI models are popping up.

In other words, they get further behind with each passing day.

Since it seems clear to me that AI agents are going to be the primary user of crypto, how is any government, the US included, going to stop the eventual tens of billions of AI agents from transacting? The idea that they will be able to identify them all is far-fetched to me.

Watch The AI/Crypto Correlation

A key point to all this is to watch how AI and crypto correlate. By this, I am not referring to markets but, rather, the development and expansion.

My view is both are going to feedback to each other.

Crypto is going to be the monetary system for AI. At the same time, AI will enhance cryptocurrency production, networks, and applications. Crypto is digital and AI is really a new form of software.

Separating the two is not going to be possible.

This will set off some major advancements over the next 3-5 years. For governments, this is a massive set back. While they will try to use AI to keep up, here we get the centralized development versus open nature debate.

History shows that, over time, decentralized, open source tends to win. Centralization gets the head start since tends to be better funded and focus is directed. However, as time passes, development starts to converge, creating powerful impacts.

Crypto is starting to see some of this. The "holes" are being filled, creating more expansive systems. AI is a bit earlier in its progress but is moving a lot faster. My guess is we will see major shifts in the next couple years.

This is happening everywhere. What are governments going to do when tens of millions of people can easily "code" a basic application along with creating a cryptocurrency with it? How are they going to battle this when people all over the world are doing it?

There will be a point in time when the numbers are against the governments. The digital world simply does not care.

Basically, they are fighting the idea of "more".

And that is a losing battle.

Posted Using InLeo Alpha