Once virtual currency is legalized, will it still be decentralized?

One of the core concepts of virtual currencies is decentralization, allowing everyone to transact freely without intermediaries such as banks or governments. However, once the country fully legalizes virtual currencies, this "freedom" may be restricted. Why?

1. The government’s control is strengthened

The first step toward legalization is often accompanied by the regulation and taxation of virtual currencies. When virtual currencies are included in regulations, governments may require exchanges and wallets to provide users’ identifying information, which conflicts with anonymity. for example:

• Transaction monitoring: Each transaction may be tracked by the government, losing the privacy feature of “decentralization”.

• Tax burden: Every time you earn a penny of profit, you may need to pay a high tax, which directly affects your investment return.

2. The essence of decentralization is weakened

Legalization may “change the flavor” of some virtual currencies:

• Fiatization trend: Governments may launch their own digital currency (CBDC), such as China’s digital yuan or Europe’s digital euro. These currencies are centralized and not the original "decentralized" spirit of cryptocurrency.

• Market competition pressure: Decentralized currencies may be suppressed due to the promotion of government currencies, and market vitality will decrease.

3. Reduced investment opportunities

Cryptocurrencies’ high volatility and price growth stems in part from market uncertainty. Once the state fully regulates:

• Volatility may be significantly reduced and profit margins compressed.

• The market will be more stable, but at the same time it will lose the "gambling" appeal of high returns.

How can I make money?

The only way to make money may be early deployment, long-term holding, or using new technologies to create application scenarios, but the difficulty of making money will increase, especially for ordinary investors.

So where is the opportunity?

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