It’s important to remember that the US was founded in 1776, or roughly 1800. And that in 1900, the country had 100 years of transportation by riding horses or horse drawn wagons.
In 1900 the train and the car were introduced to revolutionize the transportation of people and both raw material and manufactured goods.
These two innovations were soon followed by the airplane.
In 1900 very few people could envision a system of railroads which would connect the east coast and west coast of America by train, and fewer still thought of traveling across the country, not on a reliable horse but in a gasoline powered car.
It is safe to say, that these people’s minds would have been completely blown by the idea of flying not just across the entire country by plane, but across the oceans.
Horses, wagons, planes and trains are not the same.
If you reflect on how different a car is from a horse, how different a horse drawn wagon is from a train, it is crystal clear to you why rules regarding horses and wagons were very inadequate to regulate gas powered cars, and coal-powered trains.
In recognition of these vast differences, completely new rules, regulations, and completely new bodies of knowledge were developed to inform and guide the governments response to the technological advances of trains, planes and automobiles.
These technologies revolutionized every facet of our life, and the contributions of these technologies to the growth of our countries wealth and the American family’s standard of living, as one of the highest in the world is self evident.
Computers, the internet and cryptocurrency.
We have also experienced a recent similar revolution in the area of computers and the Internet.
We can look at the recent 1980’s advent of the personal computer, and the Internet.
Those two technologies, the computer, was in the beginning a machine the size of rooms, and the Internet a complicated way for scientists and the military to communicate across the continent instantly.
Now we wear more powerful computers than the ones which sent a man to the moon on our wrist. And using the improved Internet, we have video phone-calls with people across the globe.
It is often said of our modern computer technology, and the modern use of the internet, that nothing we do now was even dreamed of by the majority of people using or attempting to regulate these technologies at the beginning of their advent.
However government leaders had learned from their predecessors, who dealt with the transition from horses to cars, trains and planes. They understood the government should be vigilant for crooks and thieves, but regulate new technologies as little as possible, so the country and its people benefit from the growth and development of new technologies.
They clearly learned the lessons of the past, that old rules, for old technology, are inadequate for regulating new technology. And that just as we needed different rules for cars then horses, trains then wagons, and completely new rules for planes, as they had no predecessor. We were faced with a similar dilemma with computers and the Internet.
Cryptocurrency and the Blockchain
We who are alive today are faced with a dilemma, that we are experiencing technological innovation at a much faster pace than ever before in recorded history.
We need to recognize that as a technology cryptocurrency and the blockchain, are innovations different from the Internet and all the amazing things built on the Internet.
And just like cars, trains and planes were scientific technologies with huge economic effects, so have computers and the Internet had huge economic effects. So we should intuitively expect cryptocurrency and the blockchain to have a similar economic effect.
And just like our government has done with every other technological innovation, our government needs to acquire a new body of knowledge to guide the development of regulation. The government needs to take a similar approach to cryptocurrency as it did to other innovations, regulate very lightly to nurture growth and development, be vigilante for crooks and thieves, removing them quickly. And do the work to create bodies of knowledge to understand the new technology, and then create specific regulation that protects the people, but nurtures the technology. Because technology has a long record of improving the overall wealth and standard of living for our country. Our government needs to do the work of creating bodies of knowledge to understand this technology, regulate it lightly, remove crooks quickly, and understand it will take time to develop wise and technology specific regulation.
Cryptocurrency is different from all the things which came before it. Our government needs to regulate it lightly, nurture it carefully and be careful about applying rules like some US Securities laws which are nearly 100 years old. Cryptocurrencies may not look as different from stocks and bonds, as horses were from cars, but upon studying it over time, and seeking understanding, our opinion may change. - Nowhere is this more apparent then the brand new interface between cryptocurrency and finance, called decentralized finance.
Decentralized Finance is another huge technological innovation, occurring so soon after the last huge technological innovation blockchain. That it is understandable that people’s reaction is to want to put the brakes on it, to give the country and government the time to understand the major innovation which came before it: cryptocurrency and the blockchain. It is overwhelming in some respects for us to deal with multiple technological developments.
It is clear that we as a country and government have only started to build our body of knowledge and develop our understanding of cryptocurrency and the blockchain. And now we need to start creating a body of knowledge and develop understanding for this new innovation called decentralized finance.
In my opinion we know the successful formula is to recognize it is something new, regulate it very lightly in recognition of the inapplicability of rules regarding horses to cars. Plus be vigilant for crooks, remove them quickly, but nurture its development in our country, so our people can benefit from the wealth and prosperity innovation brings.
Those who profit from the status quo
Lastly, we must be honest with ourselves, that the industries which benefit from the status quo will attack innovation with every tool they have, to destroy it, or cripple it enough that they can take control of it, thus maintaining their ability to be profitable and successful.
However the current fight against cryptocurrency, by nature of our new world and the mobility of companies and technological innovators; makes it possible for innovators to move to different countries.
We don’t want to be the first generation in the history of our nation, to drive technological innovation, and the wealth and prosperity which accompanies it, out of our country.
Especially during a time of economic decline.
Regulate lightly, remove crooks quickly, nurture innovation and let innovation inspired prosperity grow in our country.
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