Computer security pioneer John McAfee has said that the worldwide nature of bitcoin was frightening governments, and would pose a long-term threat to government taxation and revenue.
The entrepreneur, who developed the McAfee brand of security software, has been a vocal supporter of bitcoin and blockchain technology, previously claiming that bitcoin would hit $500,000 in price in or before 2020.
Addressing the nature of bitcoin, and the fact there is no centralised exchange for governments to regulate, McAfee said that the rise of digital currencies was already causing headaches for governments and regulators, keen to retain their control.
“Our income taxes are the greatest source of revenue, but if everybody’s using Bitcoin, the government doesn’t know what your income is. They can’t tax it, and if you choose to say I didn’t have anything, they cannot prove otherwise. It will eventually frighten every nation state, but it doesn’t matter what they do, there’s no way you can create a law or to legislate something that will stop Bitcoin or any cryptocurrency because technically, you cannot.”
However, he stopped short of advocating a regulatory free-for-all, and instead suggested that some degree of self-regulation in crypto markets could be the best option, citing the topical case of ICOs as an example.
“China is right about one thing, the ICOs, the initial coin offerings, there are lots of scams, lots of people who are fraudulently taking money from other people, so that’s got to stop. But I don’t think governments can stop it. We as users and the bitcoin community have to be self-regulated.”
The comments come at a time of increasing attempts by governments across the world to regulate bitcoin and cryptocurrency exchanges and practices. ICOs in particular have been in the firing line from regulators, with many analysts expressing concerns about the nature and shape of some of the investments on offer.
Under the guise of protecting retail investors from excessive financial risks, regulators in Russia this week synced their thinking with counterparts in Beijing, with both favouring outright bans on the investment style.
But for commentators like McAfee, these efforts are all ultimately in vain, in a market that is fully decentralised and continuing to gain traction globally.