Yes, I said it, the evil anti-crypto word. Regulations. And cryptocurrency needs it, badly.
In my initial intro blog, I exposed my belief that we are just beginning to see the initial stages of a leap in technology like no other leap in mankind history. Connected devices running on wireless 1G+ speeds will become as common as you making a phone call as you drive from home to the grocery store. Heck, you can already access cameras from an app that lets you see what is inside your refrigerator while shopping – we are a stone’s throw away from many more major technology advancements and they are coming fast.
So, great but how does this impact cryptocurrency? Here is how and why. Cryptocurrency is at its infancy stage and maturing fast. Blockchain projects that solve real world problems are pumping out and big-name players are supporting them hand over fist (Microsoft, SBI, IBM, BOA the list goes on and on). Investors are taking note and wanting a solid piece of the action, neighbors are talking about the recent Forbes Magazine articles, CBNC interviews with Charlie Lee of LiteCoin and Brad Garlinghouse from Ripple and asking ‘How do I get a piece of this action’. What do they find? It takes a week to get ‘approved’, then another week to figure out which exchange you can use to actually purchase these ‘altcoins’ (not to mention the amount of time certain US Residents from states like New York and Washington run into being denied access due to state regulations). In short, it is way too difficult for mass adoption. Then there is safety and security issues. We can look at the recent BTC-e debacle and the past Mt. Gox explosion as great examples on why mass adoption of cryptocurrency cannot occur in its current state. Regulations will shake these debacles off, help lose the consistent ‘Silk Road and AlphaBay’ references and push us forward into legitimacy. We need this, badly.
Fear not, regulators actually do want ‘kill crypto’. Why? They can’t and they know it. China has already tried to ban Bitcoin. How did that go? Not too well. Additionally, they (just like me and you) see a strong potential to make money and solve real world problems.
So, now the million-dollar question: How will regulations help cryptocurrency?
First, new investors equal new money. This can be seen just recently when Bitcoin hit $1843 on July 16th 2017 – Market Cap for all of Crypto was $65 Billion that day. On Sept 1st 2017, Bitcoin hit an ATH (all time-high) of $4892 – market cap of all crypto also hit ATH of $179 billion. Pretty clear.
Secondly, more regulations do not necessarily mean the end of ICO’s nor the end of crypto. What it means is the end of scam coins or projects drummed up out of Mom’s basement, copy and pasted whitepapers and ICO’s that have been running for months or even years – yes, all of these have occurred. This places confidence in investors that projects moving forward to ICO are much more likely to be legitimate than ever before. For a recent real example of how positive regulations can be look into Protostarr ICO. That whitepaper is about as dangerous investment as could be, yet somehow still collect US$47k – not the millions we often see, but if you could make US$47k by just popping out a whitepaper like that what is stopping millions more?
Lastly, the existing coin market will be thinned out. And I strongly support this. I think we all support this even if we do not realize this yet. As the new, ignorant to the past crypto investor looks around today how do they know that Dogecoin is not set to break out? Exactly. They need professional advice and a marketplace that is limited in scope will funnel that money into less coins – thus increasing value to our favorite projects. Regulations enters a whole new investor, one with money.
Too many regulations will kill any market. This is a real risk we do run; however, it is my strong belief that in order for cryptocurrency to fulfill the future that it has, regulations are not only needed…they are inevitable. Governments are taking strong note of cryptocurrency and blockchain technology while investors and the unbacked customer demands a solution. The main issue that demands to be solved, investor reassurance. The only method that will provide that reassurance for the investor is regulations. I believe we will see many ups and downs, however in the end I stand strong in my belief that the view Japan has taken on cryptocurrency will ultimately be close if not the exact blue-print on what we will see in the end.
To my fellow crypto enthusiasts, as the Borg so famously said “Resistance if futile”.
CryptoJayson
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