Creativity Makes Regulating Cryptocurrency Impossible

in #hive-1679222 years ago

We all heard the story: Regulation is coming.

It is evident that politicians and regulators are chomping at the bit to get their claws into cryptocurrency. We have the likes of Elizabeth Warren in the US Senate and Chair Gensler at the SEC. These people are duplicated all over the world.

Everyone presumes that regulation is a foregone conclusion. They are, after all, the government and have unlimited power. For centuries, they ruled the roost with increasing tyranny.

It seems like this is only increasing. However, is it the case when dealing in the digital world?

Cryptocurrency seems to bring with it a series of challenges, none of which regulators are ready to deal with.

Here, human creativity and ingenuity might be the factors that make regulation impossible.

image.png

Source

Morphing At Light Speed

We all know what cryptocurrency looks like today. Anyone is who around the industry knows the difference between a fungible and non-fungible token (NFT). There is also Decentralized Finance (DeFi) along with Decentralized Autonomous Organizations (DAOs).

Recently, they entered mainstream crypto consciousness.

Yet, think back a few years. Is this what cryptocurrency looked like? During the last bear market, 4 years ago, were we dealing with assets that looked like this?

The answer is obviously not.

Back then, it was all about the ICO. People were using cryptocurrency to raise (scam) funds. That was about it. Utility was practically non-existent. Of course, the industry was a shell of itself compared to where it stands now.

Does anyone think this is going to stop? Over the next four years, how much will change?

We are watching an industry that is global in nature advancing forward through the efforts of millions of people. Every 6-12 months, we see something "new" rolling out. The idea of 2.0 and 3.0 is common. Many aspect of the industry are advancing to the next stage, often not resembling what went before.

Speed is something that governments and regulators do not excel at. The wheels are slow, especially when compared to hundreds of thousands of developers all hacking away at code.

Old World Thinking

When something is new, we try to apply what we know to it. This is how we frame things. While it is natural, it is often wrong.

Take the original rollout of the Internet. What was it called? The Information Superhighway. This was how people it was presented to people.

Now, is that really what this medium is about? Certainly information became abundant so it isn't as if that analogy was wrong. Nevertheless, it grossly underexaggerates which ultimately took place.

The same is happening with cryptocurrency. Most are applying what they know about money, like the USD or EURO, and trying to apply it to this. Perhaps they go a step further looking at DeFi and cross referencing it with Wall Street.

Obviously, these are starting points just like the Internet with information. However, it is vital to grasp that we will move far beyond it. Cryptocurrency is going to have its own form of social media, mobile, and commercial applications. What that will be is as incomprehensible to us now as these ideas of the Internet were in 1995.

At some point, the old world thinking has to die off. What this means is enough people have to "see the future and create it". Here is where the creativity and ingenuity of people all over the world enters. People have ideas that they can pursue. Where they come from is impossible to pinpoint. We are dealing with a global situation.

Do you think the 500+ members of the United States Congress can keep up with this? Is there any way they can stay on top of it? The situation gets a lot trickier when we are dealing with hundreds of millions, possibly billions, of people involved.

Examples

Let us take a few examples of what can happen.

  • An artist brings out a token to raise money. This token is legally sold. Someone gets wind that the latest single is going to be highlighted on one of the music playing applications. This person buys the token.

Is that insider trading?

  • An airline sells tokens for discounted drinks on its flights.

Are they guilty of selling an unregistered security?

  • Kim Kardashian brings out a line of handbags. Each is one is represented by a token. That token is good for a backstage pass to a Kanye concert (pretend they reconciled).

Were any laws broken?

  • Regulation goes in place to make it illegal to sell any digital asset without registering as a security.

What happens when the owner of Pets.com (fill in any website) goes to sell it? At the same time, does GoDaddy need to become licensed to sell securities? How is this distinguished?

These are a few examples off the top of my head. Certainly there are dozens of others that people can come up with.

Again, the key is we are dealing with the knowledge of what we have now. What are we going to be dealing with in 3 or 4 years? How much further advanced will all this be?

In Conclusion

We hear a lot about regulatory framework and things of that nature. The challenge is they are trying to hit a moving target that is going at a rapid pace.

Notice how we went through this entire article without bringing up the idea of decentralization. Instead, we operated within the context of things the governments and regulators can control.

Even still, we see how difficult it is to get their hands around this. Just using specific terminology like digital asset makes it rather difficult. What qualifies and what does not?

Decentralization, even to the slightest degree, opens up a can of worms that makes regulation infinitely more difficult.

Couple that with creativity, speed, and global operations and we can see how the regulators along with politicians are truly impotent against what is taking place.

As soon as they grasp where we are now, the industry will be somewhere different.


If you found this article informative, please give an upvote and rehive.

gif by @doze

screen_vision2025_1.png

logo by @st8z

Posted Using LeoFinance Beta

Sort:  

Regulating crypto is just like catching an eel with bare hands . One of the biggest challenges for regulators is to classify existing cryptocurrencies correctly. Crypto assets have emerged as a direct result of recent digital technological advances, and their purpose is to provide new possibilities for barter, investment, and financial transactions.

Definitely a super highway and good luck to any regulator trying to keep up. Things change that quickly that they will most likely come up with a few basic regulations. I don't see regulation as that bad depending on what it is of course as there definitely needs to be some guidelines as this is like the wild west. If we want businesses and new money to pour into crypto, regulation has to be part of it as I don't see any other way.

Posted Using LeoFinance Beta

It is simply hard for them to keep up. When you look at all that developers are doing it is amazing. So if they government (pick one) set down regulation, how long until they code around it.

Posted Using LeoFinance Beta

I am thrilled how crypto has taken over the minds of many people in Ghana and around the world. The blockchain has become a new face ofinternet.

It is great what you all are doing to spread the word of crypto and Hive in Ghana. This is wonderful to witness.

Keep up the good work.

Posted Using LeoFinance Beta

Thanks sir.

As usual, you bring up some very good points. Maybe instead of saying regulation is necessary before crypto will be adopted by the masses it would be better to say failed regulation is necessary before crypto will be adopted by the masses...

Posted Using LeoFinance Beta

LOL good point. I think you are onto something.

Posted Using LeoFinance Beta

Lol.
That's an interesting point. Don't know how authorities will cope regulating this industry seeing how fast it is evolving.

Posted using LeoFinance Mobile

Hopefully we keep it evolving big time.

Posted Using LeoFinance Beta

Hi @taskmaster4450

Good point, and I must say that I agree as no doubt the creativity in the cryptocurrency world somehow comes creating conditions that make it impossible to execute strict regulations that affect the normal economic and financial functionality within the cryptocurrency market. Politicians will be sidelined when we reach mass adoption in the crypto market, or at least that's how I see it.

Best regards, be well.

It is hard to keep playing catch up with an industry that is going ahead at a massive pace.

Posted Using LeoFinance Beta

You have some great points in here. At some point the cryptocurrency industry will be so wide spread that it will be impossible for the regulators to regulate. They will put their claws on whatever they can reach, but that will be a small fraction of the whole industry.

Posted using LeoFinance Mobile

We just have to keep the expansion going. The edges have to keep being pushed further out. That is where resiliency comes from.

Posted Using LeoFinance Beta


Hey @taskmaster4450, here is a little bit of BEER from @fiberfrau for you. Enjoy it!

Do you want to win SOME BEER together with your friends and draw the BEERKING.


The rewards earned on this comment will go directly to the people( @taskmaster4450le ) sharing the post on Twitter as long as they are registered with @poshtoken. Sign up at https://hiveposh.com.

I will enjoy watching the bureaucrats swing and miss repeatedly over the next decade. Serves them right, buzzards that they are! !BEER

Hahaha, surely I'd pretend they reconciled as in the back of my mind is love that but it's their issue.

Yeah, regulation seem to be the best as they feel it should be tamed but it is a lot that you certainly can't keep up with.
It's not like the regular currencies that you keep track of but the same knowledge that has been applied in the past is what seem better. Sorry it isn't.

We look forward as we keep moving forward.

Just have to keep expanding things over time. People are very innovative. With something that is global, and a lot open source, it is incredible to think of what hundreds of thousands of people can come up with.

Posted Using LeoFinance Beta

!CTP

The future of freedom.

How great this article, I really enjoyed reading it, as lately google is constantly throwing me news about attempts to regulate cryptocurrency, but reading this makes me base on the fast and creative power that is in the cryptocurrency world, and it is as you say they want to apply what they know to new things, that is why they are stuck without being able to understand the decentralized thinking of the crypto world, thank you very much for this wonderful post.

Totally agree. That is what keeps the hope of good outcomes alive. It did so far and certainly it will in the future as well, and we do have plenty of historical examples that give that hope also a pretty solid meaning.

Posted Using LeoFinance Beta

I just imagine one politician or bureaucrat responding, "Yes, for now, those who tokenize their services are not breaking any law, but soon we will create those laws."

I love to see the parasitical class who thinks they are omnipotent and they are well-informed about everything that is going on in cryptocurrency will one day recognize the impotence of their power and the obsolescence of their knowledge.

Posted Using LeoFinance Beta


Hey @taskmaster4450, here is a little bit of BEER from @pixresteemer for you. Enjoy it!

Learn how to earn FREE BEER each day by staking your BEER.

pixresteemer_incognito_angel_mini.png
Bang, I did it again... I just rehived your post!
Week 111 of my contest just started...you can now check the winners of the previous week!
!BEER
9

This post has been manually curated by @bhattg from Indiaunited community. Join us on our Discord Server.

Do you know that you can earn a passive income by delegating your Leo power to @india-leo account? We share 100 % of the curation rewards with the delegators.

Please contribute to the community by upvoting this comment and posts made by @indiaunited.

Old thinking cannot fully grasp the digital world. Things here are fluid and multi dimensional. Thanks to bureaucracy, rules are not easily enacted. So while they're busy debating the rules, the concept has already shifted to something else and another 'new thing' has already risen.

Posted Using LeoFinance Beta

Even those of us in the digital world dont fully grasp all of what takes place. This is why it is so interesting. The expansion is too big to keep up with.

Posted Using LeoFinance Beta

Right. Anything can happen. We just have to learn how to spot the real value and capitalize on it.

Posted Using LeoFinance Beta

good points and I hope your arguments/intuition will hold true. But it is going to be a fight which only few are willing to fight for or even see it as what it is. But I guess only very few are still involved in crypto (in a deeper sense) so there is still a lot of potential/votes to counter such behavior by the institutions. Although I like your point that it's "impossible" to keep up with it, which I guess is true to a large extent. In Germany, to give you an example, I heard of someone wanting to sell some NFTs and the government told him to basically KYC every sale. That would be like Splinterlands operating only under KYC... How to circumvent something like this? It seems the only way to do that would be to move to another country where the restrictions are less severe. But overcoming these is always quite a hurdle which only few then actually overcome. It therefore takes a lot of individual resources / a "right" mind set to actually realize it.

They are not going to simply walk away without a fight. No doubt about this. We have to keep up the development and expansion.

For this reason, we become much more resilient.

Posted Using LeoFinance Beta

Regulation rarely helps people but there are just too many people who prefer to have regulation there. It's kind of sad that the gaming space believes that government intervention is required to stop predatory practices by gaming companies. It makes me wonder how far out decentralization will be.

Posted Using LeoFinance Beta

As I have mentioned it in several posts I have written in the past; It will always be an impossible task for governments to regulate cryptocurrencies and everything related to them, because no matter how hard they try, this phenomenon (due to its level of evolution, its characteristics and potential), is totally beyond its understanding.

And it's very true that by the time governments claim (or believe) to have regulated everything, some new development or possibility will always come its way that will demonstrate the opposite.

I found very interesting your article. Thanks for sharing. Greetings.

Posted Using LeoFinance Beta