The team here at MEDIA Protocol are deeply committed to creating a more direct, transparent and secure ecosystem for content creators, publishers, and consumers through the revolutionary application of blockchain technology. In fact, it’s the very revolutionary nature of the technology that really excites us.

We’d like to share our thoughts about blockchain technology and how we see it progressing into the future, hopefully demystifying and clarifying some of the misconceptions that currently exist about blockchain and its applications. We want to help create a common understanding of the technology for everyone’s benefit.

This series of articles aims to explore developments within blockchain technology, the relationship between institutional investors and blockchain, and the move towards regulation within the space. We want to help everyone — the marketeers, the technologists, and the content consumers — understand the potential for this game-changing technology.

Strap in, and welcome to the MEDIA Protocol Future Of Blockchain Series.

Part 8 — How Does Regulation Change The Game?

We’re standing on the edge of a crypto revolution. Since the emergence of Bitcoin in 2008, the cryptoworld has shifted and evolved to change not only currency, but the entire internet. From blockchain and smart contracts to ICOs, the digital landscape is changing. It’s disruptive. It’s innovative. But is it safe?

In a recent survey by CryptoNinjas they found that 3 in 4 people had heard of cryptocurrency, yet only a very small proportion of the respondents actually owned cryptocurrency. Industry experts suggest it’s a lack of regulation that prevents established investors from entering the crypto market.

Similarly, Finder.com’s survey found that 35.3% of polled Americans stated they thought crypto was too high-risk to invest in, 26.8% found it too complicated to understand and 18.4% think of crypto as a scam.

A regulated market could address all of these issues, opening up the crypto space to an audience who may have considered it too risky or inaccessible previously. And by enticing a new audience, crypto takes a big step to becoming more mainstream and legitimate.

What Could Regulation Bring To The Cryptosphere?

Despite the meteoric rise in ICOs, ITOs and TGEs in the cryptosphere, traditional investors are still cautiously keeping to the sidelines, instead of investing. Blockchain’s fundamental selling point is that it is safe and secure. One element of this security is that all crypto transactions and investments are, to some degree, anonymised. However, potential investors are now seeing this security aspect as a risk. With news that $400mn has been stolen from ICO investors since 2015, they’re worried that they will have little protection should their digital wallets be compromised.

Currently all of the onus lies on the potential investor performing their own due diligence prior to investing. A recent survey by FleishmanHillard stated that over half of their panel of financial experts wanted the ICO market to be regulated. While it’s true that regulating ICOs could prevent or punish scam offerings, it could also add more hurdles to small, upcoming businesses, who may not have the capital or resources to break through the red tape, in order to successfully fund their project. This in turn could stifle the market.

Crypto is well-known for being an innovative, disruptive market and could lose some of this momentum should smaller projects be pushed out of the market by heavy regulation. While crypto is still viewed as a risky business by some mainstream financial institutions, any regulation needs to be done with delicacy to maintain a healthy balance between preventing scam ICOs, but still allowing smaller projects to thrive.

Do We Need More Or Less Regulation?

Even though crypto may still be seen as a somewhat unknown quantity, regulating the market is not unheard of. Japan is the first country to fully regulate and license crypto exchanges. The country boasts 16 government-approved crypto exchanges, all licensed financial institutions, similar to banks and insurance companies. And this regulation works — Japan has a thriving cryptomarket, with over 3.5 million individuals trading in digital currencies.

On the flipside, Japan’s close neighbours China have stated that cryptocurrency is a “disruption to the financial order” and have banned ICOs completely.

South Korea are a little more receptive, but their Financial Services Commission (FSC), Financial Supervisory Service (FSS) and the Korea Financial Intelligence Unit (KoFIU) want cryptocurrency investment and trading to be considered similar to traditional financial structures, rather than remaining on a decentralised, anonymised platform.

Closer to home, the UK and EU are planning a crackdown on cryptocurrency by removing the anonymity of buyers, in an attempt to bring crypto in line with anti-money laundering and counter-terrorism financial legislation. While some may view regulating the market as adding unnecessary red tape and a bureaucratic side to crypto, there’s also the simple fact that if the market can’t be regulated, it may just be stifled.

If it comes down to a case of regulation, or the banning of cryptocurrency completely, surely regulation is a better answer?

An increase in regulation could be utilised to protect investor interests and ensure the long-term sustainability of the market. This, in turn, could prevent the sector from becoming stale or saturated with an influx of new talent and innovation.

While crypto was once seen as an anti-establishment movement, thriving on being a counterculture, it’s time to evolve and take steps towards legitimising and stabilising the market. Crypto can only become more mainstream by embracing the future, and it seems to be that the future is a regulated market offering more transparency, security and certainty to potential investors.

Read All Parts In Our Future Of Blockchain Series

Part 1 — What Is Blockchain?

Part 2 — What Does The Future Hold For Blockchain Technology?

Part 3 — Why Aren’t Tokens Mainstream?

Part 4 — Investing In The Future

Part 5 — Trading Platforms

Part 6 — Custody

Part 7 — The Security Of Regulation

Part 8 — How Does Regulation Change The Game? (This article above)

Part 9 — The Birth Of Crypto Regulation (Coming Soon)

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