Why regulation of new crypto-currencies is pointless !
TLDR; In this article I’ll try and have a look at the broader perspective for the online development space, and I’ll try to explain why it’s useless to even start with regulating crypto. Of course regulators have to try, because that’s what they do, but it will all seem pointless in the years to come… ( if you ask me ; )
All of the fuzz around Libra-coin shows exactly what a lot of blockchain-enthusiasts have already realised in the last years: There only has to be one killer-crypto-app… and immediately after it, there will be a new financial institution of respectable size, maybe even competing with the biggest governments, and… they won’t be able to ban it!
One app to rule them all, and even more so.. with its own rules.
Of course we have already struck our digital gold with Bitcoin. Many articles have been written about how great it is, and what is coming with the Lightning Network ( and the bigger world doesn’t even see that yet, amazing ; ), but let’s just try and look at it from an even broader perspective.
Every app can now have its own token…
What if Instagram would have a crypto-currency integrated from the start?That a development cycle like this in the diagram below is possible, tells us that there is a significant chance of new crypto being used globally in the nearby future, within 8 weeks!
The scaling-debate
Many crypto-doubters would object to this and point out all the challenges around scaling. Will a crypto-coin ever reach mass adoption? Or … shouldn’t we increase the block size?’ And… ‘ when will crypto have it’s netscape-moment?’ A lot of focus has been put on this. In my opinion these are all valid questions, but they come from people who can’t see the forest for the trees here. Questions that need to be asked, but eventually they don’t really matter, because… nowadays, ‘apps on phones’ can already be scaled!
I believe this is a very much overlooked aspect of the world we are living in. I also believe that ‘blockchain development’ is moving very rapidly towards this world where its app-tools can just be integrated into those apps. Just imagine ‘the next Instagram-app’ with a crypto-coin installed.
Within a couple of weeks millions of users could be using it. They might not be able to transact all at the same time, but why is that even necessary?
“Crypto doesn’t really need a netscape moment, because the internet already has had its adoption moments…“
The Netscape moment is something that is often referred too. During that period the internet has adopted billions of users. So… crypto ‘only’ needs a breakthrough into the world of app development… and it looks like that’s already taking place.
The world is now shifting from using all of those apps, some with in-app currencies already, to a connected world of apps that might interact with the ‘blockchain’. A new world for which the core developers right now are in the process of setting-up all of the rules. But… watch it… they don’t decide. They are just figuring out what works best!
The thing is, that one-app-developer, it can be anybody, can conquer some ground in the coming years, but it will be everybody all-together who are decorating the space. All of those teams setting up all of their rules for their own coins, and accordingly: when some of those coins would receive those killer-statistics downloads with an app, the rules of that coin are applicable for each of the app participants from then on. Only then, after ‘that adoption from one apps-perspective’, comes regulation above the surface. It’s my believe that it will be pretty hard to keep track of all of these developments. Did you ever see one government regulator playing around in the World of Warcraft for instance?
How are those regulators going to stop all of those people from using their soon to become favourite apps and their connected currencies?
If they will try to ban a popular demand then there will be a dApp developed very quick. If for one thing ‘Satoshi Nakamoto’ gave us that promise. That seems to be the number one rule of blockchain and crypto-currency. It can’t be regulated by external third- parties… ‘the blockchain’ will prove what works, and what doesn’t work…
“If you have millions of users in a game, how is any government going to set up the rules for that?”
So therefore one of the perspectives of this article that I’d like to give you is: There are already thousands of these app developers not complying with any regulation whatsoever… did you ever see one regulator in your favourite online game?
So in our apps we are living according to our own rules and standards. Of course if one of those crypto-apps really breaks-through and gains some traction in 2020, few boundaries might be set for that specific example. That might be something to worry about for governments in the years to come. Any app with crypto and some traction. We will probably see some of that happening soon. But what if thousands of these apps are going to use all of those specific currencies… or just a few of those coins? Or Bitcoin only? What if thousands of those massively adopted apps ( millions of users ; ) start popping up all the time, and they just have one outer-app currency integrated, or even more? How are governments going to regulate that?
Well. In my opinion that’s the trend that our world now follows. I wrote this article just a year ago. I could now easily follow it up with already hundreds of apps with crypto-integration instead of just ten of last year. Just look at all of the wallets and applications that are being developed. All of the games, and trading-apps, etc. everything that is being developed in the crypto-space.
And then… try and realise, who is regulating all this development right now?
Where regulation does take place…
If you look at the crypto-space you can mostly see that the ground infrastructure is being set up for a lot of blockchains in a very rapid pace. I’m linking Ethereum-news here, with no pun intended. For insiders: I believe any question about Ethereum being a bit delayed is completely ridiculous! (read the article in the link to find out why ;)
However… whatever blockchain environment you would like to take (Bitcoin, Komodo, EOS, Tron, etc.) all of the actual rules are being set-up there, and all of the tools are being developed to integrate new techniques of tokens, new smart-contracts, and all of its merits into the world of app-development in an easy manner from now on. All kind of improvements are being made to already discovered token standards. It will be only a matter of time before the whole world of app development is taking all of those (now ‘by blockchain regulated’ ; ) tools and start injecting them into their apps. You can see that shift happening in the gaming world already, for instance.
The great thing is that all of those new currencies will be interconnected. That’s what ‘the blockchain’ is making possible. It has already set up the rules for the years to come for every crypto-currency by its foundations, and also the connectivity within those rules. How are you going to stop all of that development of apps and their now connected outer-app currency with a government regulation facility? From this perspective, I understand why it needs to happen, but it looks kind of silly to even try, in my opinion…
Where we are now…
The market cap of crypto is about 250 billion dollars right now. As we know that number sort of fluctuates and it might even be discussed. There are already a lot (!) of projects in development which could gain user traction in the years to come, or not. For insiders: There is a great bet being set about whether that will actually be happening, or not. I’m thinking Jimmy Song is going to lose this bet by the way, but if Joe would lose, that wouldn’t even matter. A lot of crypto-currencies are gaining traction anyway…
Governments are now watching Libra and are worrying and will (very justly in my opinion ; ) try to think of all kinds of ways and rules to stop that coin from really developing or taking off. That’s good of course, for privacy perspective! Or maybe they will loosen their grip a bit and let it play. Forced by some argument to try and see its advantages, and maybe they can even work with it. But what they can’t see is the forest for the trees here…
That in their country at the same time there are thousands of (d)App developers working on their own version of their currency, with its own rules, completely out of sight from government regulation.
So we won’t need to see that sign of a netscape-moment, and we won’t need to see that sign of a specific killer app that rules them all, and it won’t all be necessary… because soon (you could argue now already ; ) at a click of a button all of those blockchain-tools will be available… everywhere.
‘The blockchain’ sets the rules!
Take a stroll…
You might want to have a glimpse at such a new world? Just one? Just last week we could still fly through this space, and there was no gravity… but now we can’t anymore. I think that’s a shame, but the point is: This space shows a glimpse of the new world if you ask me. This is where the rules come out and play. This is where there is a fundamental blockchain-layer with regulated coins integrated. This is what’s happening just next to our real world… and it happens online… and give it ten years or so and it will be setting the standards for what’s happening offline. No regulator can compete with that. You could call it ‘the disruption of regulation’…
If a developer decides that we can pay with crypto flying through the air, then we can. If that developer invents a way to integrate payments at our local coffee-corner, then we can. And if that developer decides that everybody can join that game, then we can too. From this moment on ‘the blockchain’ is now in control and available for everybody to set-up their own online environment and to have their own currencies integrated. Currencies which are now all connected to world just outside of the games.
The great thing is, that developer can be you! It is a user owned virtual world.
How long it will take…
My prediction? I think it will be a short matter of time, ten years maybe, before we really won’t need any FIAT-gateway anymore. It only takes one baker in the virtual game above to set-up shop on a real-life location and play along with its rules. One baker that sells his bread for the value of a token. One baker to see the value of the token for which we can buy it, with whatever app is available, where we have whatever which coins. We exchange that token at a click of the button, and we have something to eat. After which we just go on and play some more.
If I could bake some bread I would sell it to you right now for some bitcoin...
( that’s no financial advise, it’s just opinion, as everything is in this article ; )
I hope I could make my perspective a bit clear. Do you now also see why regulation of crypto-currencies by governments is pointless? Because ‘the blockchain-development-space’ is already taking care of regulation. They are working out what works or not. Already for over ten years now! And it’s just a matter of clicking that button and add a crypto-tool to an app, any app… your app… anywhere in the world, whether that app is decentralised or not.
It might feel like I’m stating the obvious here, but you think about it you must agree. It’s quite a groundbreaking insight for me ( again ; ) in that rapid development that is taking place in our world.
Please do leave your comments if you think otherwise…
O yeah... by the way... there are some governments that already realise this. By installing blockchain regulation-free zones South-Korea is doing what is necessary to compete ‘with regulation’ in the world of tomorrow. Haha, my guess is that would be the best way to go! ;)
