Besides, when one is picking between different currencies or would be currencies its reliability depends on its history. What follows is that trading partners will coordinate to make a system of exchange that utilizes this currency work. Hence regardless of whether Bitcoin warrants the expenses of exchanging it should likewise be adequately superior to anything an incumbent currency can offer in order to warrant the expenses of coordination. The problem with existing currencies is exacerbated by the fact that virtually all national currencies are government-sponsored. These currencies typically benefit from some form of legal tender status and public adoption. It is thus going to be an arduous path for Bitcoin to receive greater adoption. Government sanctioned currencies additionally allow national banking authorities to conduct fiscal and monetary policy produce seigniorage income and control monetary transactions via regulatory oversight. To the degree that Bitcoin contradicts the role of banking authorities to a great extent i.e leading currency-related arrangements raising capital preventing illicit exchanges or extortion etc. it may be liable to administrative regulation and discourage trading partners from receiving Bitcoin as compensation.
Surely some governments such as that of China officially found a way to boycott or control Bitcoin via intense supervision of the internet the ability of Bitcoin in providing alternate governance leaves a sufficient degree of ambiguity. The usage of Bitcoin will neither be legally sanctioned nor banned for years to come. Just as the Prohibition era Bitcoin may see its light some years ahead or be completely abandoned as a result of legal sanctions. Regulatory institutions thus have a significant influence in raising or lowering the transaction cost of Bitcoin adoption. As much as Bitcoin is promoted by technology evangelists to be the next stage in human governance and economic exchange we should not ignore the pragmatic limitations an economy's regulatory institutions, political environment and judiciary system all have a part to play.
