The evolution of cryptocurrency and regulations since the inception of Bitcoin
Bitcoin is dubbed by most as the king of cryptocurrencies. That is mainly due to it being the first established crypto. However, between 1998 and 2009, various attempts were made at creating online currencies with ledgers secured by encryption. The two prime examples were B-Money and Bit Gold, which were proposed but never fully developed.
In 2008, a whitepaper called “Bitcoin: A Peer-to-Peer Electronic Cash System” was emailed to many people by a mysterious person or group of persons named Satoshi Nakamoto. Bitcoin was built on the blockchain, a revolutionary technology invented by cryptographers Scott Stornetta and Stuart Haber in 1991.
In 2009, the Bitcoin software was made public and thus began mining — the process by which new Bitcoins are created, and transactions are recorded and verified. A year later, on 22 May, a guy named Laszlo Hanyecz made history by trading Bitcoin for the first time. He agreed to pay 10,000 BTC for two pizzas in Florida. Admittedly, a day he’ll forever regret. Up until then, Bitcoin had no assigned value.
The first altcoins appeared in 2011 as Bitcoin increased in popularity primarily due to the idea of a decentralised currency that was not controlled or regulated by any government. Despite being the original cryptocurrency, Bitcoin has lagged concerning usability and is not a transactional crypto. Bitcoin is more of a store of value or even a commodity. At the same time, ETN continues to prove it is transactional and, therefore, usable.
Dr. Scott Stornetta said, “I think Bitcoin was a brilliant piece of work, but it was sort of a solution looking for a problem.” In contrast, the world-renowned scientist said that “Electroneum is piggybacking an abstract unit of currency onto ETN directly into something has intrinsic value, which combined is the idea of a GigFair (AnyTasks) ecosystem, which provides a question for which your cryptocurrency is the answer.”
A brief history of crypto regulation
For many years after Bitcoin’s inception, no government expressed concern over the need to regulate cryptocurrencies. That may be why the crypto space has frequently been described as the “Wild West.”
However, given where the natural evolution of mediums of exchange are headed, regulation seems an obvious and unavoidable step forward. Electroneum CEO Richard Ells and his team realised and decided ETN would be the first cryptocurrency to become KYC and AML compliant in 2018.
Stornetta agreed with Electroneum’s move to a moderated centralisation to ensure absolute security and regulatory certainty. He praised the fact that Electroneum is the first cryptocurrency in the world to have become fully KYC/AML compliant. “We (at Yugen Partners) feel that the ultimate solutions are somewhat hybrid between permissioned and permissionless,” which is precisely what Electroneum’s Moderated Blockchain is.
In 2013, the US Financial Crimes Enforcement Network said cryptocurrencies do not “have legal tender status in any jurisdiction.” And although Japan became in 2016 the first country to introduce regulation after a series of hacks against crypto exchanges, including the massive 850,000 BTC theft against Mt. Gox, many regulators around the world agreed there was still no need to regulate the space.
In fact, in March 2018, Financial Stability Board Chairman Mark Carney wrote a letter to the G20 saying the international organisation’s initial assessment was that crypto-assets did not pose risks to global financial stability.
Currently, the crypto global regulatory scenario has taken a completely different shape and form, meaning many countries have prohibited cryptocurrencies, including Algeria, China, Bangladesh, Bolivia, Colombia, Ecuador, Egypt, Indonesia, Iran, Nepal, and Taiwan, among a few others.
However, as shown below, there are many more countries that have embraced crypto, including Switzerland, that promises to be the first fully cryptocurrency country in the world.
Unfounded money laundering concerns
Some of the key concerns over cryptocurrencies are that they are used to launder money or to finance terrorism. However, many experts have responded to this saying fiat currencies are also widely used for the very same purposes.
The United Nations Office on Drugs and Crime reported that in one year, “”2% to 5% of the global gross domestic product, or US$800 billion to US$2 trillion” is laundered globally.
Further to this point, Kathryn Haun said the fiat-dominated financial system has proven to be inept at tackling the very thing it purports to worry about when it comes to crypto. Ms. Haun is a general partner at Andreesen Horowitz and the US Justice Department’s prosecutor for the infamous Silk Road case.
The fact is that both cryptocurrency and its underlying technology, blockchain, have proven to be a solution to many issues. VeChain, for instance, has used the blockchain to create a more secure and transparent supply chain, drastically reducing the risk of fraud across valuable sectors, including pharmaceuticals and food products. Electroneum is creating a regulated crypto ecosystem that is aimed at helping to eradicate financial exclusion by providing billions of people the opportunity to access the global digital economy instantly.
Creating value to the end-user today is as important as complying with regulatory frameworks. Compliance helps build trust; it’s appealing to corporations who otherwise would not get involved with crypto and protects consumers. Electroneum’s priority is helping people in developing countries, who are unbanked and living in poverty, by providing them with a safe and secure way to engage with ETN and have increasing places to use it as payment for everyday items and services.
Originally published at https://news.electroneum.com on March 3, 2020.
