The regulations and regulators of the Blockchain should not be feared – BTC threads

Of& nbspPrashant Jha

Blockchain technology is one of the trendiest topics since 2010 when the first Bitcoin digital currency was born. The Bitcoin white paper highlights several advantages of a decentralized network and how brokers can be removed from the image.

However, most of the speech has gone from blockchain implementation to blockchain regulations. Leading players in the game believe that the application of strict government regulations can drive away new and upcoming projects from entering the league.

In 2015, New York became one of the first cities to draft and implement regulatory reforms on cryptocurrencies. The finance department has made it mandatory for existing and imminent digital currency vendors to get a "Bitlicense" to operate in the United States.

When the regulations were finally put in place, a significant number of crypto-startups left New York. The leading actors in the encrypted world who left the states in 2015 included Kraken, Shapeshift, Bitfinex and Poloniex. New York's superintendent of financial services, Ben Lawsky, said at the time of regulation,

"We want to promote and support companies that use new and emerging technologies to create better financial companies, Regulators will not always find the right balance … But we have to start somewhere. "

Three years after the implementation of the Regulations, the native companies still have to rejoin the States, but that does not mean that everyone goes away. For example R3 The consortium for the distribution of the ledger of the financial sector is based in New York. Other major players in the cryptic world who have not been affected by government regulations include Digital Asset Holdings, Symbiont and Axoni. Pillars of Wall Street like Goldman Sachs, JPMorgan and the parent company of the New York Stock Exchange are entering into action

Bitlicense, though not perfect, has certainly not killed the crypto market in New York. The financial regulatory body showed hurry during the implementation of blockchain regulations, but things have changed over time. The regulatory bodies have introduced new plans to mitigate the restrictions imposed on Bitlicense

The financial regulatory body addresses their dilemma

Financial regulators face a dilemma alone, if they put too strict rules such as Bitlicense, they fear losing the new technology and pushing it to the limit. On the contrary, if they take too long to implement the rules, the technology could grow without hands and to place restrictions is not only complex but also expensive. So regulators must find a good balance in not killing a new and imminent technology or leaving the new technology intact for so long that it grows uncontrollably.

If the regulators see clear evidence of the damage they have been set to avoid, they enter into action. Smart regulators must encourage innovation without letting them use the rules improperly to inflict harm on others.

The classic case for understanding the importance of regulation comes from Microsoft in the 1990s, when it threatened to block web-based services, since it had monopoly power. The US government intervened in the matter and held it back. If the US government had not set foot in time, the Internet would have been a completely different place today. Imagine "internet explorer" as the default browser.

Final thoughts

We have all been told the story of Bitcoin and Blockchain stories in which the government and centralized authorities are the villain. Undoubtedly the basic idea of ​​the system of distributed registers without a centralized authority seems amusing, but without the necessary rules on the great actors who control the crypt, the market would give them a monopoly, which would be rather difficult to limit a once grown out of all proportion.

You do not have to see regulations and regulatory bodies in a bad light, rather they have to understand that the two sides have to work hand in hand to get the most benefits.

Prashant Jha

As a content writer, Prashant believes in presenting complex topics in simple terms such as laity. He is passionate about technology and an avid reader.