The Daily Hodl
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Altcoins
    • Financeflux
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams, Hacks & Breaches
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • Chainwire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Altcoins
    • Financeflux
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams, Hacks & Breaches
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • Chainwire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
No Result
View All Result
The Daily Hodl
No Result
View All Result

Bitcoin and Crypto Hedge Fund Founder Charts Dystopian Future Where Governments Control Digital Currencies

by Daily Hodl Staff
February 14, 2019
in Regulators

Ari Paul, chief financial officer, managing partner and co-founder of crypto hedge fund BlockTower Capital, just dropped his vision of financial dystopia in an epic tweetstorm. Surveillance on steroids is coming to a society near you, courtesy of governments around the world that will try to brand, issue and operate their own highly trackable and traceable digital currencies.

Their most damaging feature will be a freeze-and-seize function that will allow a government to cut off your purchasing power and revoke your ownership rights at the flip of a bureaucratic switch.

Crypto fiat (i.e. government controlled permissioned cryptocurrencies) will be the biggest battleground globally for human rights over the next decade. China is leading the way, many other countries, including some big western democracies, will follow. https://t.co/8BqfmBJ2mP

— Ari Paul ?? (@AriDavidPaul) February 13, 2019

Writes Paul,

“Governments have a powerful incentive to require exclusive usage of crypto fiat. It makes tax enforcement easy, lets governments ‘turn off’ the money of criminals and political dissidents, and central banks love it for the real-time transparency and tighter monetary control.

I expect China and some others to first roll out crypto fiat, and then quickly thereafter to ban anything that competes with it: cash, non-crypto fiat, and if they enjoy significant usage, gold and public cryptocurrencies like Bitcoin.

Most money is already electronic. Going from electronic Yuan to crypto Yuan is pretty easy technologically but gives the government an entirely different level of transparency and control.

Imagine if an algorithm or bureaucrat could easily ‘turn off’ the money of 100,000 citizens with social media links to political dissidents. Not only would their money be frozen, but no one would be able to give them money. They’d be functionally cut off from society.

Currently we have privacy through obscurity. The Chinese (and US governments) can already track and freeze electronic money, but it’s very ‘expensive’ and manual. It requires patching together transactions across a long list of heterogeneous databases.

And freezing the money requires the involvement of numerous third parties (like brokerage firms) that obey government directives, but again, a lot of manual work for every freeze. With crypto fiat, it’s a click of a button across all platforms to freeze or confiscate money.

The people who are going to be most in need of cryptocurrency? My guess is the ~200m people in China out of favor with the government, and people in similar situations globally. It’s a staggeringly large pool of people.

Engineers sometimes argue with me about the distinction between crypto fiat and electronic fiat, since there’s little (if any) engineering difference. Probably the best way to frame it is in boring bureaucratic terms.

Currently when the SEC wants to investigate suspicious activity in equity markets, they have to go through a crazy process to track down the source of the trades, sometimes resulting in dead ends, because the trades go through a half dozen intermediaries.

It’s not that crypto fiat technologically enables anything that’s currently impossible with fiat, it’s that it removes the bureaucratic friction to such a degree as to enable qualitative, not just incremental, increase in government control.

One last example – imagine if Beijing law enforcement rolled out an algorithm that acted kind of like your credit card company – freezing your credit card on suspicious activity automatically. Now imagine if that applied to *all* money you have across any platform.

And if the algorithm was looking not just for outright criminal activity as we think of it, but of activity that an algorithm deemed possibly unpatriotic. And if to get access to your money again, you then had to confront a faceless bureaucracy, like the US no-fly list.

As with China’s social credit score, a great deal of the impact of such a policy is likely to come from ‘voluntary’ behavior changes among the population. If you have to be worried about an algorithm arbitrarily freezing all of your assets, may you avoid being friends.

With someone who occasionally criticizes the government. You might censor yourself and those around you to keep things easy. This creates a sharply bifurcated society, a separate underground economy and underground civil society fully divorced from mainstream.”

[the_ad id="42537"] [the_ad id="42536"]
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Submit a Press Release

Industry Announcements

  • BTCC Exchange Appoints Dan Liu as CEO Ahead of 14th Anniversary Milestone
    May 21, 2025
  • Bitcoin Suisse Secures In-Principle Approval From ADGM’s Financial Services Regulatory Authority
    May 21, 2025
  • Beer 2.0 – The Memecoin That’s Brewing Something Bigger on Solana
    May 20, 2025
  • Wall Street Ponke Launches With AI Tools, Learning Hub and Over $300,000 Raised in Hours
    May 20, 2025
  • Reppo Launches World’s First Liquid Node Sale, Pioneering Decentralized Data Infrastructure
    May 20, 2025
  • BingX AI Evolution Begins – A $300 Million Vision To Build the Future of AI-Powered Crypto
    May 20, 2025
  • Imrat Group Gains Priority Access to New Product – Bybit Launches Direct Stock Trading via Tether Stablecoin
    May 20, 2025
Submit a Guest Post
ADVERTISEMENT
Bitcoin
$109,740.40
$109,740.40
2.68%
Ethereum
$2,561.59
$2,561.59
1.42%
BNB
$675.83
$675.83
3.81%
Solana
$174.10
$174.10
3.35%
XRP
$2.40
$2.40
1.94%

Spotlight

  • Here’s When It’ll Be Time To Flip Cautious on Crypto Markets, According to Analyst Jason Pizzino
    May 14, 2025
  • SEC Chair Paul Atkins Says Rational Regulatory Framework Needed for US To Become ‘Crypto Capital of the Planet’
    May 14, 2025
  • Low Cap Nasdaq-Listed Firm Reveals $300,000,000 Fundraising Plan To Acquire Crypto, Including President’s TRUMP Token: Report
    May 14, 2025
  • JPMorgan Chase Settles First Transaction on Public Blockchain Using Chainlink (LINK) and Ondo Finance (ONDO): Report
    May 14, 2025
DON'T MISS A BEAT
Crypto headlines delivered daily
to your inbox
BTC, ETH, XRP news alert options
By joining The Daily Hodl news list you agree to our
Terms and Conditions and Privacy Policy.
Featured Image: Shutterstock/Billion Photos

Covering the future of finance, including macro, bitcoin, ethereum, crypto, and web 3.

Categories

Bitcoin • Ethereum • Trading •
Altcoins • Futuremash • Financeflux •
Blockchain • Regulators • Scams •
HodlX • Press Releases

 

ABOUT US | EDITORIAL POLICY | PRIVACY POLICY
TERMS AND CONDITIONS | CONTACT | ADVERTISE

JOIN US ON TELEGRAM

JOIN US ON X

JOIN US ON FACEBOOK

COPYRIGHT © 2017-2025 THE DAILY HODL

No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Altcoins
    • Financeflux
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams, Hacks & Breaches
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • Chainwire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise

© 2025 The Daily Hodl