The world of crypto should embrace regulation!
Now, I know “regulation” is a dirty word and some of you are likely already cursing my name. Yes, it’s a touchy subject for many within the industry but hear me out for a few minutes… there’s a method to my madness I assure you. So don’t hang me just yet, it may not be quite what you think.
A good bit of what I’m about to say may well not be very popular among a portion of readers and while admittedly my opinion shouldn’t be the sole reason you change your views from one plateau to another, (nor do I expect to actually change anyone’s mind), I think we can all agree on one thing as a whole — we want cryptocurrency to thrive and prosper.
It’s the methods required to get there that we may disagree on.
First, one critical key for cryptocurrency is mainstream integration and use. The sooner that it becomes possible for Sally Shopper to use her Litecoin at her neighborhood grocery store, Amazon, and the national chain of auto-repair shops, the quicker we’re going to start seeing more investors.
On that note however, even if big name companies start accepting the various cryptos and they become as easy to use as modern-day debit and credit cards, if we don’t see a few key changes within the industry, it could all be for naught.
At the moment, there continues to be exchange “hacks” on almost a regular basis. This is the first area where I believe regulation should come into play.
While cryptocurrency is supposed to be decentralized and free from regulation, there has to something that ensures the safety and integrity of the industry. Exchanges and wallets alike should be held to certain minimum standards, with fines for failing to adequately protect their infrastructure and customers.
While I don’t want to see rules that prevent healthy competition, how can we expect newbies to trust that they won’t lose their investment without some underlying rules that the platform must abide by?
A HUGE area that is in dire need of regulation is ICOs. There have been a virtual flood of scam ICO projects of late and if something isn’t done rather soon, we could end up missing out on some fantastic projects simply because we refuse to be scammed again. Once bitten, twice shy.
Currently, there’s not any sort of “authority” that verifies the legitimacy of any particular upcoming project. Scammers have gotten pretty damn adept at creating a “team” of developers using fake profiles, writing up an enticing white paper, and developing a very realistic-looking website where the crowdfunding is anonymous and many are so keenly crafted that they escape detection by the community until it’s too late for too many investors.
We seriously need an overall authority that verifies the authenticity of the people behind the project, and that who they claim is involved actually are, and perhaps a few other rules such as criminal record background check and a review of associated claims/promises to ensure authenticity. Once complete, that office would issue an approval and then, and only then, crowdfunding could begin.
Now, I know a lot of the “scamming” issues may well dissipate with the implementation of IEOs, but not all startups are going to be able to venture down this avenue. And again, we could miss a lot of unique and profitable opportunities if everyone is restricted to only launching via IEOs.
With ICO regulation, market confidence from current investors will increase and we’ll see new investors being attracted to the industry, helping to increase the entire overall market capitalization.
So who should provide this regulation?
See, I told you not to hang me yet.
It is up to us to ratify, implement, and govern the rules and regulations of the crypto industry. Of COURSE we can’t trust ANY government for proper oversight, and I wouldn’t dare to even suggest it. The first thing they would do is increase fees and immediately try to determine how they can tax us at every turn.
Utilizing the underlying tech of virtually every cryptocurrency, we can police our own. With blockchain, smart contracts, and the very same miners currently working to provide the heart of Bitcoin, Ether, XRP, etc., etc., we can eliminate virtually every scam ICO as well as ensure that exchanges and wallets are adhering to industry requirements.
It really boils down to one of the most basic set of commands known to man — If, Then, Goto, and Else. Except now we have the power of smart contracts where we can ensure that the parameters are completely met along the way, and we can verify these requirements via the blockchain at any given time.
The blockchain verifies the credentials of those announced to be a part of the upcoming project and with an overall consensus, approves or denies that individuals “seal of approval.” Every aspect of the offering could be voted on by the blockchain, with majority rule being the binding stipulation.
Of course this would take a lot greater minds than mine to make a reality and there’s a ton of variables that would have to be considered.. such as 51% attacks allowing in undesirables or blocking legitimate offerings just because they can. Thankfully, the industry is FULL of people waaaaaaay smarter than I, so I have complete faith that this could indeed become a reality.
However, if you read this and you do happen to launch the project based on what I said, hit me up with a finder’s fee or cut me in. I’ve got plenty of ideas!
How Crypto Should be Regulated
The world of crypto should embrace regulation!