Necessity is the mother of all invention - P2P cryto currency Exchanges
Abstract: As the currency printing is getting shifted from governments owned presses to a purely crowd sourced mechanism, governments around the world and the central banks are panic strikes and creating all sorts of hurdles. Like an guerilla marketing trick, the regulations are acting as the vehicle to mass adoption of decentralized virtual currencies. This is a classic Necessity acting as the mother of invention
Authors: Humans on the planet Earth
Keywords : blockchain, stupidity, printing presses, monopoly, mules, head load workers, economics
I am one of those Engineers who was unfortunate to failed to understand the importance of Economics. We had a course called "Engineering Economics" and it took me nearly a decade to understand that it was the single most important course in the entire engineering curriculum. As part of the work recently I was tasked to define coin distribution for a certain coin about to be listed in binance  - this made me find answers to few exciting questions.
- How many coins to be minted on day one ?
- Once the coins are minted, whom should we give them to ?
- How will we give it to people ?
This was essentially the same problem a country's central bank might have faced on day one of their establishment. They had to print the notes or mint the coins, decide on the coin supply, transport them and distribute them via local distribution channels. So the establishment hired few people called government officers who then setup distribution centers aka treasuries and they acted like the local warehouses from which the distribution happened - yea, just like an amazon warehouse in your vicinity. Then, for the last mile distribution they hired porters and they were essentially another set of government officials.
In a nutshell government officials work for the business as mules to transport minted coins from factories to regional or district centers and then from then from those locations to last mile door to door delivery. Based on the amount of money they transport, they have different grades too. Often the individual carrying the higher head load is paid more as he distributes more items (coins, notes).
Figure 1 : A Photograph taken at a burger + juice shop, Bangalore, India
For the rest of the hypothetical discussion the entity which prints/mints and distributes the paper with a certain non-intrinsic value will be termed as a printing press.
Often its bad to have monopolies as they tend to kill the competition and impose rules which will promote their business. In a free world, such monopolies often survive for few centuries and then they are disrupted. The way the monopolies work via creating closed eco-systems will little or no interoperability.
There are competitions committees established in various geographic locations to prevent any individual or entity taking control. When all other mechanisms fail, nature comes up with a Satoshi Nakomoto 
3. Printing Presses vs Satoshi
Over the last decade, the large scale printing presses all over the world mostly ignored the anti-competition initiative created by Satoshi. By the end of the decade however, large scale businesses like stock exchanges which speculate using the products of the printing presses started loosing business, insurance agencies, stock brokers and various wall streets noticed the impact of Satoshi.
This has created the tuzzle between the large scale printing presses and the decentralized printing press created by Satoshi where anyone and everyone became the printing press.
4. The Necessity
Threatened by the accumulated unsold inventory and means to distribute them the large scale printing presses faced a supply demand problem and they have understood unless prevented, the ghosts of satoshi will displace the head load workers employed by the printing presses.
The printing presses denied anyone and everyone who has any relationship with Satoshi access to their product.
The followers of Satoshi has alternate means and the ever growing community started interacting with each other by taking out the large printing presses acting as the intermediate agent.
The decentralized currency creation mechanism using cryptography and the exchanges needs no explanations these days. From your girl next door to the famous Facebook brothers are into it. The centralized exchanges faced challenges from various governments and this creating new challenges for the exchanges and the users. While a large number of users are merely speculating on these markets, from hitmen, to your favorite drug-lord to a content creator or musician on STEEM or Muse or a software engineer with thick spectacles are all earning or transacting in virtual currencies. The primary reason being, they are fast, easy and secure. The privacy argument is quite irrelevant IMHO as there is no privacy on a public ledger and I do not see the need for it. In a world were legacy systems like SWIFT  is still used, high speed transactions provided by blockchain implementations like Ripple  is taking over.
"The reason for adoption of blockchains are speed and ease of use as opposed to privacy"
The blockchain technology is driving innovations no just in financial sector, but also industries like telecommunication , supply chain and autonomous cars etc are also getting new innovations. In the financial sector and international payments, outdated payment mechanisms are either getting replaced revamped. SWIFT itself is rolling out faster solutions that resembles like blockchain 
5.2 Cryptography Exchanges and innovation
While the blockchain technology is transforming the overall technology sector by providing fast, secure, highly available solutions, the exchanges that is frequented by traders and promoting the use of currency is facing challenges from their bigger rivals - stock exchanges, mutual funds, the wall street and thus the obvious : governments.
The governments across the globe is trying to stop wide spread use of alternate currencies which essentially threatens their "business model" based on closed economies and control (in the name of either freedom or democracy or often both).
This has created pressure on the free economy and exchanges and those involved are finding innovative methods to circumvent the ~freedom of speech and freedom of choice~ restrictions imposed. The very restrictions are creating methods which are completely binding within the the frameworks while defeating the frameworks not just for the short term but eliminating them in the process. Historical mistakes of ban and regulation instead of managing the new challenges is threatening the very frameworks which the governments trust, implement and preach.
The Peer to Peer (P2P) model of exchanges, possibility with implementation of AML (Anti Money Laundering) regulations, government issued Digital Certificates (DSC) for verification of identity and thus the strongest KYC mechanism can completely replace the need for FIAT in the real world. Many of the modern blockchains like the ones based on Graphene and Chainbase (Bitshare 2.0, STEEM, EOS) as well as Ripple implement escrow capabilities with no or very low fee. One of the notable examples of a P2P exchange which is operating on the Chainbase based STEEM is Airhawk Exchange and those the escrow feature is not used, they seem be have crated an innovative method.
5.3 Suggestions for exchanges
While I am not sure about the financial aspects and regulations, it will be very easy to implement SSBC and secureScuttlebut based P2P exchange which can ensure secure communications, cryptography with KYC using government issued Digital Certificates and escrow. The cryptographic agreements will be legally binding due to the nature of digital certificates. If the digital certificates are supporting export, mostly they will be valid for cross border virtual currency transactions as well. Implications of FEMA, PMLA, FATCA, FATF must be considered.
While the so called crackdowns are impeding the short term profitability of traders, these regulations will create innovations which will make it possible to use the virtual currencies for day to day transactions. So rather than panicking, consider these regulations from the unprepared entities as initiatives which will indirectly act as means promote innovation and market the virtual currencies to the masses. The beauty of technology is that exceptional ones will be indistinguishable from magic and it will last.
 Satoshi Nakamoto - author of bitcoin paper and proof of concept blokchain developer
 SWIFT : the Society for Worldwide Interbank Financial Telecommunication
 GPI from SWIFT : https://www.swift.com/our-solutions/global-financial-messaging/payments-cash-management/swift-gpi/the-digital-transformation-of-cross-border-payments
 SSBC and Secure Scuttlebut are NodeJS implementation of a cryptographic signed append only transaction log