A lot of attention is given to what governments are doing. At this point, it is a little more than theater.
Don't get me wrong, having alliances with governments in the sense of getting political support (cover) is beneficial. Unfortunately, at least in the United States and Canada, that is not coming in the near term.
We see a strong anti-crypto stance being taken. The latest from the interview that Gary Gensler, head of the Securities and Exchange Commission (SEC), gave to CNBC shows where things stand. These people do not want to regulate cryptocurrency. Instead, they want to destroy it. Gensler stated how the fiat currencies are already digital and hence there is no need for anything other then the USD.
I wonder if he will echo the same sentiments when there is talk of a central bank digital currency (CBDC) since, after all, the currency is already digital.
The recent actions of the SEC send shockwaves through the crypto markets. This is just another example of how knee jerk reactions play out.
That said, we need to step back and look at the bigger picture. Here we see the foolishness of this mindset and following what these people are doing. They believe they are in control, something that is a fallacy.
In this article we will cover how cryptocurrency does not require the approval from governments.
Networks Not Cryptocurrency
What most are focusing upon is the financial aspects. They completely ignore the foundation that is being built and what is actually taking place.
What is cryptocurrency? This is a question few take the time to consider. It seems most view it as a new asset class, like something Wall Street created. This was not the work of the present financial system.
Cryptocurrency is a solution to a long standing problem relating to the Internet. The original protocols (versions) did not make commerce native. What was created was an information system. The early programmers were academics and security agencies. Commercial applications were not in their thinking.
For this reason, we got a siloed system. PayPal and Amazon grew because they were built on top, filling in underlying voids. Blockchain, through the development of cryptocurrency, resolved this.
In other words, it made money native to the Internet. Now we have networks with currency built in. Anyone can create an application, tie into the wallet system, and incorporate the currency. This is open to anyone to utilize.
Thinking you can stop this is akin to believing the Internet can be stopped. Governments have shown completely incapable of excelling in this domain.
Decentralization
This is something we discussed frequently. However, this is the backdrop against what we are focusing upon.
Cryptocurrency is expanding as decentralization among many industries is occurring. I wrote about the likes of Tucker Carlson and Shannon Sharpe, leaving major broadcasting networks yet having other options. The former sent out a video tweet last night that got over 40 million views. That is a 10x over the nightly viewership he had on the major news channel.
Within this realm, we have only started playing around with decentralized ownership and governance. Decentralized Autonomous Organizations (DAOs) are only now being used. Over the next few years, we should expect to see many more projects such as ConstitutionDAO. Couple this with the advancements of artificial intelligence, i.e. software, and we can really see how this operates outside the reach of governments.
Those who are not truly decentralized are at risk. Here is where the pretending stops. It is true that much of the industry is at risk since cryptocurrency, for the most part, is not decentralized. The totality could be considered that yet the individual projects are not.
This means that Circle, Ethereum Foundation, and other companies are targets. If there is a party to subpoena, people like Gensler will do it.
If we want to flip this around, consider the idea of a truly decentralized media network where individuals are able to have their shows, this can be tokenized, and yet there are no companies involved at all. Even the hosting of the content is not done by a single company (or node).
What will agencies like the Federal Communication Commission (FCC) do then? How will Gensler attack it?
Imagine the idea of raising money and it going into a wallet that is controlled by a smart contract. That means the entire process, from the fundraising to execution is done without humans.
What is Gensler to do then?
Building
At the end of the day, the reason governments do not matter in this equation is we are building. Infrastructure is the key to all this. Once we have some major pieces in place, we see the entire system flip.
The one vulnerability is the on and off ramp to fiat currency. Here is where the regulators and governments might have some power. That all breaks down as more payment systems are developed. What is easiest is having real world goods and services available using cryptocurrency. Those that can be done direct using a coin such as the Hive Backed Dollar (HBD) becomes impossible to stop. There isn't even a company behind the wallet.
What this means is that everything built ties into this. As more of these appear, the value of the rest of the system explodes. The ability to develop crypto-to-crypto platforms is without question. DAOs, liquidity pools, and DEX all can be build, expanding the interoperability within cryptocurrency.
Start to remove the value of centralized exchanges (CEX) due to the decentralized development and direct payment of goods with cryptocurrency and it is game over. There is nothing that governments can do then.
Keep in mind what we started earlier: Cryptocurrency is native to the Internet. If you are on a blockchain, it is part of the base layer code. Then it becomes a question of controlling or shutting down the network.
The only reason someone like Gary Gensler is even remotely relevant is because we have not developed enough to make him (and those like him) completely irrelevant.
Give it another couple years and we will laugh at the governments' ineptitude at dealing with this. Open source software tied to decentralized networks is a force too powerful for them.
If you found this article informative, please give an upvote and rehive.
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If someone tries to destroy cryptocurrencies, it means that they completely do not understand them. There used to be those who tried to destroy mp3. So what?
Thankfully, Hive is not owned by a company, although I worry that if every other cryptocurrency is affected by the SEC, someway somehow, every type of cryptocurrency will lose attention and that might affect the overall value. I don’t really know how these things work though, but that’s my opinion
Try as they may, the government won't be able to control the use of cryptocurrency.
I think they fear it because they can't control it. This means, they are having difficulties in imposing taxes.
Very informative post. The way you explained everything is quite understandable, I've also upvoted and rehive.
Tucker Carlson and Shannon Sharpe, are another good example of decentralization.
The government should think again, and fast. The quicker they understand that cryptocurrency is the in-thing and native to the internet the better for all, because nobody can be able to stop the internet.
I don't believe that this will lead to anything, for every fall there will be the emergence of a better idea, that's why I keep my money out of centralized exchanges that can complicate my money with government decisions. I convert everything to Bitcoin and leave it allocated in a Bitcoin Core wallet.
I'd like to see the look on the faces of the likes of Gensler when we arrive at options where we do crypto on and offramps because that is where they are trying control cryptocurrency at present.
"Fiat is already," tells us the kind of leaders we have that are intent on holding onto the system that only benefits them.
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Indirectly saying that there isn't any need for crypto signals to us that they fear the tech or don't understand it. Governments aren't going to be the drivers in making crypto successful in the world. They're just wasting their time.
Si vienes a Venezuela te encuentras con una moneda digital llamada Petro y es controlada por el gobierno.
Si vienes a Venezuela te encuentras con una moneda digital llamada Petro y es controlada por el gobierno.
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It began with the democratization of information in the 90's. Then the democratization of media in the early 2000's. Now we are experiencing the democratization of content and monetization. It's a great time to be alive and creating content on Hive.
My thoughts on Hive and how it has devolved, and why I'm quitting after being here from day 1.