Regulators Are Watching Crypto Closely - Is This Good?
My news feed was overwhelmed this morning with a certain trend: it seems that a lot of countries are starting to watch closer the crypto phenomenon. Australia, for example, is trying to pass a bill which will bring cryptocurrencies under the financial intelligence agency AUSTRAC, and local authorities in US, are noting in a report that they are closely watching cryptocurrencies.
This comes after China and South Korea declared ICOs illegal.
I'm trying to find reasons why this is good. Or bad, for what matters.
The Grim Way
Will a tighter regulation framework stop the spreading of cryptos? I don't think so. By design, blockchain is distributed. Unless the whole internet will be transformed after the Chinese model (with its famous "Wall" which blocks pretty much all the traffic in and out of the country) I don't think this is feasible. There will always be ways to generate new tokens and to maintain price discovery processes (exchanges) on top of these blockchains.
If regulation evolves into enforcement, though, we may see a slow sliding towards the "underground" area. Cryptos will be, to some degree, illegal.
But history shows us that what is rejected has this strange habit of growing even more. What you resist, persists. Remember prohibition? It lasted quite a lot but all it generated was an even bigger layer of criminality.
Cyber-war and cyber-crime are totally different things, though. We saw that with Napster, with torrents and, recently, with Pirate Bay. Sooner or later, the long arm of the established authority will find a way to put down these efforts. Especially when the lines between legitimate activity and crime are intentionally blurred, in an effort to downplay an entire phenomenon, not just a few players.
The Moderately Optimistic Way
A more optimistic approach, although still very upsetting, socially, would be the deep transformation of authority structures to adjust to this technology. It wouldn't be the first time in history this happens. Electricity changed dramatically how we live, although we're all way too young to realize that. It changed social structures, organizations and it shifted entire countries up or down.
So it may be possible to assist at dissolution of the state, as we know it. Structures that are empowered now will be decentralized. Money will change from its monolithic, government-controlled structure, into a fluid, dynamic flow that will be controlled only by demand and supply.
But make no mistake, this demand of supply will be still controlled by humans, who, we all know, are driven by greed and fear. Even though the state, as we know it, may disappear, power structures will not. They may shift in a different direction and they may take another form, but I think they will stay in place.
It will be clearly very interesting to talk about "whale consortiums" instead of "North Atlantic Alliance" and about "dolphins agreements" instead of "trade regulations".
Or I may just be ranting.
What do you think?
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
If you're new to Steemit, you may find these articles relevant (that's also part of my witness activity to support new members of the platform):
"whale consortiums" sound like a club for fat ladies :))
Technology and money marketss are always much much faster than regulators.
Governments are managed by polititians, not experts. They regulate to keep their status quo or the one from big and powerfull economical institutions and lobbies but there is not too much you can do with big technological disruptions.
It happened with MP3 in music, in editorials and book stores with readers, in the movie distribution business with peer to peer distribution. When a market just benefits a few and regulations appear to maintain their benefits, people starts working whith technology to be able to cheet the system.
Regulators come in, and they just slow things down for a short while, until markets boom after the regulations become opsolete.
Some finantial institutions will adapt but most of them will close down. Some governments will understant and take profit of the technology (probably only the small country ones), most of them will see how individuals break the regulations as it is imposible to control them.
This is the global money revolution, and it has just started.
I like how you think :)
Hey, where is the Super Optimistic Way section! That seems to be a very popular approach around here ;)
I think your analysis here is quite sobering. Time to change my witness vote...
?
Wasn't voting for you, now I am. Yet another good piece of analysis of the platform got me thinking that I want to support that (I was thinking about it for a while now).
I have a friend for about 10 years on the internet who first taught me about Pinterest. She frequently ends her posts with "Pray to God that nothing happens to the internet so we can all keep making money."
I don't know if they can blow out the whole world-wide network, or if the loss of the whole thing would be too devastating for the bad guys to even try. I would most definitely be destitute if I had no online activity.
It's about taxation but it's also about control freaks. People who get high up in government are the kind of people that like nannying others. They want planned economies where they can print and spend.
I can tell you with certainty of 100% how it will be in the future. In a time period of one year or more one of the governments will pass a model of the law which will regulate all cryptos and icos. All legal exchanges like Bittrex will be obliged to accept only certified cryptos that are created in accordance with certain legislation. Probably at some point all governments will follow one universal model. All they need is a time to adopt the laws in a way that fits government interests. If you don't agree with it , you won't have ability to list it on exchange. Easy as that.
Decentralised exchanges, wallets with built in privacy mixers etc, I see this stuff becoming more and more common and getting wider use. I'm in the process of withdrawing all my funds from Bittrex over weeks (the daily limits make it take a long time) because they got too nosy. These exchanges with "know your customer" compliance will go under and everything will move to decentralized methods. I see more and more trade taking place on platforms like EtherDelta, that used to be a ghost-town.
Wallet is one thing, exchanges is different, centralised or not it will have to follow legislation rules, trust me :) fully decentralised system is a dream, which works now for a short period of time.
The war on drugs has been a HUGE success...there are hardly any illegal drugs any more
Oh wait...that's not true..
I'm not concerned about regulations, but am looking forward to see what effects the regulation have. Let's be hones, especially in the US, it's not a matter of if it's when the government will decide to step into the crypto atmosphere.
Will regulation cause panic selloffs and bitcoin/crypto selloffs, or will it help legitimize crypto and in the long term make bitcoin seem even more valuable due to it's "illegal" status.
@dragosroua I am just excited with all the Good News and Positive things that are happening with crypto right now. With the help of what @ackza has posted over the past couple of days I was even able to Open my GOLOS account this morning ( Russian STEEMIT ) Voice of The.............Exciting Times !
yes friend you are right