Putting cryptocurrencies in their place » Tech T100

IMAGE: Shubham Dhage - Unsplash

The bill proposed by the US Senate to put cryptocurrencies under control and prevent abuses that endanger citizens is an important victory for the industry and for all the actors involved in this environment, mainly because it avoids the supervision of the Securities and Exchange Commission (SEC) and proposes to put them under the supervision of the Commodity Futures Trading Commission (CFTC)a much smaller agency and with an attitude towards the subject infinitely less hostile than that shown by the SEC and its current director, Gary Gensler.

The regulation criteria is still interesting: at this point, thinking of cryptocurrencies and cryptoactives in general as something comparable to the actions of a company and subject to its same regulations supposes a rather unsustainable situation, which if it lasts , would probably turn the country into an unfriendly environment for this type of development. The Senate bill is not intended to make the SEC an institution that is too old-fashioned or incapable of regulating these types of assets, but rather that their nature makes it more meaningful to consider them as a currency, a commoditiesa derivative or another type of financial product.

More and more, we have to think of crypto assets as something that is here to stay, and whose value will depend almost exclusively on the number of people who consider them a trustworthy 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 the famous paper from Satoshi Nakamoto who pulled the blockchain out of a drawer and launched the cryptocurrency revolution, it is relatively trivial and has low barriers to entry to propose and launch a cryptocurrency, to the point that there are those who have done it for the sake of doing a joke.

In this area, therefore, bitcoin will coexist for some time, whose issue already exceeds 90% and in which many investors, companies and even governments use as a store of value, with an Ethereum whose creator had the idea of ​​using its chain of blocks in an infinitely more versatile way, and with an infinite number of coins with supposedly happy ideas that, however, are far from having achieved an adoption that supposes a minimum guarantee of survival. Along with them, many other crypto assets dedicated to all kinds of things, from reflecting the ownership of something, to looking for market mechanisms to try to do things like encourage the removal of carbon dioxide from the atmosphere, or create other supposedly efficient markets where before there were none.

All this and much more is, from an innovation point of view, 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 ban them”, to another of the type “this is here to stay, and if I take measures to scare it away, even temporarily, I risk harming my economy” . An excess of conservatism in the control of crypto assets is increasingly seen as an absurd attitude, although this does not imply, of course, trying to protect the citizen from the many speculators and criminals who try to do business around the margins of the phenomenon, or to protect the environment by trying to reduce the use of energy used in mining or come from the sources it should come from.

From here, little more: 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 only depends on the number of people who believe in it, try to oppose it it’s just absurd, because in many cases, the cat is long out of the bag, and conspiracy theories about alleged pyramid schemes are just that, conspiracy theories. The blockchain is destined to become a kind of quasi-universal 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, others we will not, and others will seem directly insane to us, especially because of what is brutal or challenging to what they will progressively replace. But let’s not say we weren’t warned.

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