Will Regulation Come?
Bitcoin is a type of digital currency. It is also a finite resource. Only about 21 million bitcoins can be mined according to experts.1
About half of this number has been mined already; mainly by private citizens and private business concerns in the developed world. Yet, those in developing countries cannot join the mining of this resource in earnest because of low energy/power installation considerations (there are frequent power cuts and outages for sustained periods) and poor access to computers/computing technologies (digital-divide issues). Should quotas for the mining of bitcoin be introduced, therefore? These may be considered analogous to Special Drawing Rights regulated by the International Monetary Fund or the preservation of spaces for geosynchronous satellites by countries of the world.
Since one selling-point of cryptocurrencies is that no central authority regulates transactional activity between users of such currencies, non-regulation is 'built-in' or 'in-built'. Any attempts to introduce regulation will be resisted unless governments force the regulatory issue. There is talk that the Chinese are forcing 'some' regulation through. Although their motives are less clear and particular modus operandi among the Chinese are not well understood. Muted fears that governments could launch or mint their own alt-coins yoked to ‘blockchain’, (with injunctions mandating use) are part of some peoples’ nightmare scenarios. The government of Venezuela is being rumoured to be considering this option strongly.
So, if the blockchain, invented 8 or 9 years ago, went viral through a singular application2 and more applications are being yoked to blockchain per second per second as may be imagined, what is to stop governments from raiding the space and mandating everyone to use their own application?
1See S Volkering, ‘Crypto Revolution, Bitcoin, Crytocurrency and the future of money’ (Southbank Investment Research Ltd 2017) 91.
2Bitcoin's price appreciation and price volatility last year was everyone's redflag (so to speak), Governments really took notice. Bitcoin is the one application of blockchain technology with massive uptake. Steem Dollars may be viewed as an application of blockchain technology in the social media space. Does this make sense?
Here's a news story provided as rider to the post above ...
Banks are developing their own blockchain applications.
No surprises there.
'Expert' talks about the blockchain and its significance but disparages initial applications of blockchain technology. ... Is he right?