Putting cryptocurrencies in their place
The US Senate bill to control cryptocurrencies and prevent abuses that put citizens at risk is an important victory for the industry and all actors involved in this environment, mainly because it avoids Securities and Exchange Commission (SEC) oversight and proposes to place under the supervision of the Commodity Futures Trading Commission (CFTC), a much smaller agency with an infinitely less hostile attitude toward the subject than that presented by the SEC and its current director, Gary Gensler.
The criteria for regulation is still interesting: right now, thinking of cryptocurrencies and crypto-activities in general as something comparable to a company’s stock and subject to its same regulations supposes a rather untenable situation, which if it lasts would probably turn the country into a hostile environment for this kind of development. The Senate bill is not intended to make the SEC too antiquated or incapable of regulating these types of assets, but rather that their nature makes it more meaningful to consider them as a currency, commodity, derivative, or other type of financial product.
Increasingly, we have to think of crypto-assets as something that is here to stay, and whose value will depend almost entirely on how many people consider them a reliable asset. Does this mean that anything goes and that the thousands of cryptocurrencies that exist today will survive in the future? Absolutely. Due to the open and simple nature of Satoshi Nakamoto’s famous article that brought the blockchain out of the drawer and launched the cryptocurrency revolution, it is relatively trivial and has few barriers to entry to propose and launch a cryptocurrency, to the extent that there are those that have done so for a joke.
In this area, therefore, bitcoin, whose issuance is already over 90% and which many investors, companies, and even governments use as a store of value, will coexist for some time, with an Ethereum whose creator had the idea of using its block chain in an infinitely more versatile way, and with an infinite number of coins with supposedly happy ideas that are, however, far from having achieved an adoption that assumes a minimum guarantee of survival. Along with them, many other crypto assets dedicated to all sorts of things, from reflecting ownership of something, to seeking market mechanisms to try to do things like encourage the removal of carbon dioxide from the atmosphere or create other supposedly efficient markets where none existed before.
All of this and more is, from an innovation standpoint, too diverse, plastic, and rich to be equated with a mechanism like the SEC. We are moving from an attitude of “if I don’t like cryptocurrencies, I’ll ban them,” to one of “this is here to stay, and if I take steps to chase it away, even temporarily, I risk damaging my economy.” An excess of conservatism in the control of crypto assets is increasingly seen as an absurd attitude, although this does not, of course, imply trying to protect the citizen from the many speculators and criminals who try to do business on the fringes of the phenomenon, or to protect the environment by trying to reduce the use of energy used in mining or coming from the sources from which it should come.
From here, little else: if we have a much more reliable and secure mechanism than the current one for the operation of a currency, and its value and relative importance depend only on the number of people who believe in it, try to oppose it simply absurd, because in many cases, the cat is out of the bag long ago, and conspiracy theories about supposed pyramid schemes are just that, conspiracy theories. Blockchain is destined to become an almost universal type of technology that will be behind many things and that, like other great technologies, is destined to change the way many others work. Some of these changes we will like, some we won’t, and some will seem downright insane to us, especially because of how brutal or challenging they are to what they will progressively replace. But let’s not say that we were not warned.
Originally published at https://www.reddit.com.