The FTX saga has brought back talks about crypto regulation, and I am one of the many persons making this call for obvious reasons. Self-regulation in the crypto sphere has failed several times. The excuse that the crypto sphere is still very much in its infancy doesn’t hold much water–especially to me. This technology/industry is impacting the lives of millions of people–many of who aren’t familiar with the inner workings of this sphere.
I think this statement doesn’t take into consideration the intricate nature of the crypto sphere and the fact that many are well accustomed to the mode of operations of the traditional physical system, thus, leaning toward CEx whose operations mirrors that of bank and other traditional financial institutions. People are used to keeping their monies in the bank for safekeeping and transactional purposes without having to look over their shoulders (because there are regulatory frameworks protecting their interests--or at least the semblance of it). Self-custody is still very much a novel idea to many individuals. Even the idea of self-custody seems intellectually dishonest because we need a third wallet to transact in most instances in the crypto-space (Trust wallet, Metamask), these too can be compromised.
The bottom line is crypto needs to be safe, even for the most vulnerable individual with little technical know-how of the crypto space. This is why I think more regulation is required in this space. Centralised entities that do not follow the ethos of blockchain technology should not enjoy the immunity of decentralisation. Many of these centralised entities have grown in strength and dictate what happens in the crypto space through corrupt practices. This should stop.
Centralised exchanges play an important role in the crypto sphere. They bridge the gap between the traditional system and the crypto sphere. Crypto is still not a viable means of exchange for most people. I cannot walk into a grocery store and buy milk with my hive. If that wasn’t the case I would have no need for binance or any CEX. They also offer safety features like account recovery that are appealing to the masses-this is what they are used to in the traditional financial system. So the idea of not using or keeping funds on CEX is quite unrealistic. So rather than telling people not to use CEXs, a better approach would be to advocate for better regulatory frameworks that protect customers.
My dilemma with advocating for more regulations is that one hand I want customers to feel safe and on the other hand I want to preserve the ethos of decentralisation. The latter seems to be more important to people, but I would like to see a healthy balance between both, and to achieve this I think there should be more strict regulations of CEXs. However, regulation leads to more regulation. The only way out of this would be a fast pace of development in the crypto space. Crypto is about innovation, not personalities or ego, which the crypto community has fortunately gravitated towards over the last few years.
There is cancer eating through the crypto sphere. The VCs, the pseudo-technocrats, the speculators, CEXs, etc are ruining this space. If decentralisation is truly the goal, we need to take a U-turn in the way the sphere operates. Unfortunately, I am not an idealist and I do not see these players leaving any time soon. So I will call for more regulations. The masses should not suffer while the oligarchs play their little games.
I also think Crypto needs to be safe. I think there need to be more ways for people to learn about Crypto. I use an app called Continuum to stay on top of learning new things about Crypto and Blockchain. I wrote an article if you want to check it out. The app is pretty awesome.
https://read.cash/@HattyHats/continuum-earn-crypto-and-nfts-while-learning-about-your-favorite-topics-b80ea171
As time goes on and people start realizing how important it is to keep the majority of your Crypto in a cold wallet and transfer to an exchange when you are ready to sell or trade then I think people will realize how safe Crypto can be. Regulations on exchanges are a must but regulations on the individual are going to be a little more difficult. A good amount of people use Crypto to stay away from centralized entities. I guess we will have to wait and see what the future holds and what our "leaders" decide to do.
Thanks for the great read and looking forward to your next one.
There is no safety in any sphere, may it be the classic currency or cryptos. If you want a safe space, you'll get it, be sure of that. If enough people move the tides - and the fall of FTX is the perfect moment - governments will all jump on it and regulate the scene. They will NOT regulate the big players, who might have not announced yet their own coins, but I bet they will. Then everyone will jump on it, because too big to fail. I hope, I will be wrong though.
It is the unregulated market that makes it thrilling and fun. People like to moan when they lose in the casino, but they have great fun winning. If you want security in a decentralised environment, you will get it centralised. Aren't you still a bit young for that? I read in another article of yours that you were a student not long ago. Except you studied as an already adult, so let me know :)