It’s not necessarily “Big Brother”
Is regulation set to be the battleground that defines the leap from Fiat to crypto? We seem to be living in a world of catchall words and phrases that are used to encourage or scare off potential investors and users of blockchain, cryptocurrency and basically anything new.
It is impossible that there will be a single defining moment at which time the layman suddenly “gets it” and use of new technologies and encryption suddenly becomes trusted and we all live in a new age where banks start to crumble like dinosaurs unable to adapt to the changing needs of the market.
Governments cling to a single word as their defense against the march of financial progress.
That word is regulation.
Mark Zuckerberg, someone who appears to be stuck between having created a “nice” product in Facebook and knowing what to do with it other than to become the world’s largest store of personal data, made an interesting point the other day. Although I may be paraphrasing, he said that it is not a question of whether regulation is necessary, it is a question of what type of regulation is needed.
Of course, in the brave new world, information is everything and what is known about us, the public, influences everything, good and bad.
Regulation must be “self-inflicted”
The regulation of the cryptocurrency market will have to come from necessity since it is impossible for there to be a “negotiated settlement” since the two sides in the argument are so diverse.
On the one side individual countries are constantly announcing studies into cryptocurrencies that appear to be bureaucracy’s way of slowing the march of progress, and on the other we have a “wild west” attitude exhibited by “prospectors”, those who have grown up with technology and are eager to spread their wings.
It is certainly a clash of civilizations and the only people who will be able to suggest any form of regulation are those of the generation who grew up with the new paradigm and find it “second nature.
The first question will undoubtedly be “what needs to be regulated” and it will not be the blockchain which is central to the concept of automatic self-regulation.
It is obvious that ICO’s could stand some form of regulation. However, it revolves more around information and verifiability of information than having to conform or comply with any set form of rules.
Anything new, yet not fully understood by those who are interested in its development will always attract those looking to take advantage and they demonstrate the need for regulation.
Bitcoin suffers by association
Bitcoin had a week it will want to forget.
It fell well below the $8k level which optimists had considered as the level at which fresh buying could be expected. Those with a vested interest in a stronger Bitcoin have been out in force “talking it up” with comments like “how hard will you kick yourself when it is back and $15k or producing data which shows its rise from a few cents in 2011 to $20k last year. Unfortunately, they fail to take into consideration the depth of corrections that will have wiped out many buyers.
The reason for Bitcoin’s malaise was the news that Twitter is going to ban cryptocurrency advertising and Bitcoin, probably not the target of the ban, got caught up in the crossfire.
Those same people extolling the virtue of Bitcoin at $8k (despite it subsequently falling to $7k), were claiming foul and that the mainstream social media platforms were being threatened or at least influenced by Governments and regulators.
That, naturally, takes us back to my original premise. The veracity of adverts needs to be confirmed but falls outside of the purview of institutions like the UK’s Advertising Standards Authority.
