Regulations don’t stop scams. What the hell is this Blockchain?
Updated: Sep 21, 2020
Attending the MoneyConf in Dublin triggered my curiosity about the blockchain. Here’s what I learned about the ecosystem and cryptocurrencies.
What is MoneyConf?
The MoneyConf started as a small stage at the WebSummit and expanded to become an independent conference in Dublin.
Last year, MoneyConf received over 5000 attendees and 740 CEOs of world-leading bitcoin, cryptocurrency and fin-tech startups.
A lot to digest in 3 days but the questions asked opened my mind on the future of cryptocurrencies. Let’s first understand how the ecosystem works and what’s cryptocurrencies.
Well, in 2008, someone called Satoshi Nakamoto, invented a peer to peer electronic cash system — known as the blockchain. It is completely decentralised, there is no server or authority involved, a global network where machines communicate with each other.
Because there is no centralized network, everyone can be a miner.
To Bitcoin or not to Bitcoin
Bitcoin was the first currency that was recorded in the blockchain. It grew so fast that some early adopters became millionaires from one day to another. It disrupted the world.
How to evaluate a token project by Edith Yeung, Head of Greater China, 500 Startups
Following the success of Bitcoin, people started creating other currencies. Some are doing better than others. They are not necessarily in competition with each other, they have been created for different purposes and to solve different problems.
“Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us.” — Thomas Carper, US-Senator
Crypto and regulations, should there be any?
Olga Feldmeier, CEO of Smart Valor, is pro-regulation, she’s convinced that regulators will step more into this space. “The majority of the exchanges today don’t have legal status or proper licensing. Segregation of funds and recording of transactions is very important to make the transactions more secure and more reliable”
On the other side, both Ben and Amos disagree with Olga and argue that the blockchain is already more tractable than cash itself today. ‘We have to be careful with the regulations… they are not compatible with the nature of the technology”
The crypto ecosystem: Coins, tokens, smart contracts, and regulations at CryptoConf
“If we’re looking at the securities and regulations, that makes sense that we have silos where each country has their own regulations but we’re talking about a decentralised way of moving asset freely in a decentralised way, we have to think about some kind of global relation to that” — Amos Meiri, co-founder and CEO of Colu
Crypto-Wallets, do we need regulation for that?
Jon, the Co-founder of ShapeShift thinks that Wallets shouldn’t be regulated at all, as long as people are using their own keys. He compared it to the wallet we have in our pocket, do we need regulation for our own pocket wallet? That would be ridiculous!
“My wallet in my pocket, I don’t need AML/KYC checks to put cash in my pocket or to give it to someone else” — Jon, the Co-founder of ShapeShift
Amos agrees on this, pointing out the difference between two types of users: the ones holding their own keys, in which case there is no need for regulation, and the ones holding private keys, in his opinion, there should be a regulation for that.
What about banks?
We are talking about a global network, banks have their own centralised servers. Yet, in 2015, some banks have started investigating in blockchain security and payments. The big ones are investing in cryptocurrencies, especially on Bitcoin as it was the first to appear.
“Big Banks are Investing Heavily in Blockchain and Crypto: $364 Billion Investment Firm” www.ccn.com
Peter McCormack wrote An Open Letter to Banks about Bitcoin and Cryptocurrencies, pointing out why banks should consider the crypto market to not lose their current customers. The letter talks about making more money, speed, flexibility, innovation and excitement. It’s a 13 mins read also available on audio, fun and sarcastic.
“You see we need global currencies and we don’t trust any centralised body to run it, and because Bitcoin is decentralised it has solved this need.”
To Wrap up
The regulations make it hard for the good actors to grow and innovate while the bad actors will ignore the regulations anyways, they will found ways to go around it. Hacking and laundering money is already illegal, there are already regulations for that. We need a global approach to Cryptocurrencies, the technology works in a decentralised way which gives everyone the right to use them or to mine them.
“The value of blockchain is bigger than transparency, it’s democratisation of capital” — Jalak jobanputra, Founding Partner at FuturePerfect
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