We Need to End the “Wild West” of Cryptocurrencies

Decentralised doesn’t have to mean lawless. As Bitcoin turns 10 years old, it’s finally time to do away with the “wild west” narrative. While many believe that the cryptocurrency space is an unregulated free-for-all troubled by instability, this is changing fast.

Cryptocurrencies’ greatest strength is the fact that they are decentralised and not controlled by a central bank. However, this doesn’t need to come at the cost of security and stability. Whatever the doubters or purists say, at least the businesses in the crypto space are being regulated.

New crypto companies are applying for e-money licenses from the FCA in the United Kingdom, and there is the potential for a blanket EU measure to bring law to the supposed outlaw environment of ICO’s. This is welcome news for both the community, as well as investors.

Unification of the two systems is the only way forward, i.e the antiquated financial system and the revolutionary technology behind the decade-old token economy. The two systems must work together to protect consumers and weed out players who don’t follow industry guidelines.

For well over a year, many entrepreneurs have developed tokens with little to no use case. This has been a plague on the industry, with sales of crypto attached to a promise of riches instead of value to the ecosystem.

The industry needs to come together and create a structure for self-regulation, this can be achieved by utilising the blockchain for smart contracts or even through use of the outdated regulatory systems. People need to be held accountable for their actions if they breach guidelines designed to safeguard consumers.

Collectively, we need to build confidence in the sector, this will enable a transfer of interest from standard secure assets such as gold, property and other tradable stocks towards the cryptocurrency market. The inward flow of institutional money will be beneficial for everyone involved and society in general. Individuals and businesses will be able to use blockchain and cryptocurrencies without having to understand the underlying technology, similar to how the majority of the people don’t know how emails work.

It’s here, too, that cryptocurrencies show their legitimacy as a currency: they are increasingly used as a medium of exchange, a unit of measurement and a store of value for multiple use cases (in this sense, Bitcoin is often referred to as digital gold). They aren’t just tokens for speculation.

Experts increasingly predict a recession within the next two years. This is a decade after the last recession which led to the birth of Bitcoin by a person or a group called Satoshi Nakamoto, which in turn brought in the storm of the current tokenised economy. With that, there is an opportunity for crypto to show it’s true value, not as an unstable asset, but as a powerful financial tool with which to weather instability.

Like any developing technology, it takes time for the full applications and implications to take shape. Just look at the internet in the 1990s: the dot-com bubble was a major source of instability at the time, but as companies started using the internet, this changed dramatically. Only a few years later, It is now a fundamental and inescapable part of daily life for billions of people.

Who knows? It might even offer solutions to the Brexit debacle, for example enabling the UK customs union and tax authorities to have total transparency when tracking both imports and exports. In a no-deal scenario, we’re going to need all the help we can get.

Ultimately this “wild west” discourse is counterproductive. Britain is facing a period of instability, with constant fear mongering surrounding the Brexit. The sooner we harness these new technologies to streamline processes and weather periods of difficulty, the better the results for everyone in the future.