For the past 20 years, I have worked globally as a C Level in either fast moving tech industries such as mobile communications or in disruptive tech like Grab (ride-hailing).
For me it was a logical move into the world of blockchain, but it wasn’t until I was there, that I finally began to realise the significance of the future impact the tech would bring.
Initially, I thought, ‘wow! I’m early to something for once in my life.’ Then I realized that the romantic notion I had fallen in love with, was not dissimilar to the non-blockchain world. What seemed like a crazy bunch of misfits trying to push for a revolution, digressed into the fast and furious world of money printing through needless ICOs. One thing business teaches you is that if its new, shines and has a tint of rebellion about it, finished off with an air of mystery due to its complexity, people will sell it like snake oil. Selling to a lack of understanding has always been a sure fire way to make money. Why? You can make something sound far better than it actually is. How can a blind man read ‘do not touch in Braille?’
In the current landscape, I see a lot of the bigger players having completely centralized models. I see regulators and law-makers gaining the upper hand in curbing control over cryptocurrencies and those that sell or ‘peddle’ it. This gives the illusion of control and in some cases it is very real. A massive issue in this space at the moment is technology vs currency and the fact that in general terms, they have absolutely no tied relation.
TECHNOLOGY vs CURRENCY
There are a number of governments who have a pro blockchain and anti-cryptocurrency stance. Why? Most argue they can see the value of the technology and can understand the impact it will have in the future. However, they also argue, that while the space remains largely unregulated, it poses risk and threat to unknowing investors. As there is no real way to determine how legitimate each project is, other than regular forms of vetting, it is very hard to determine the legitimacy of these projects. Due to its very nature of being borderless etc, it is also very hard for governments to police and more importantly tax. Think of cryptocurrency trading like an amusement park with many rides and stands inside the park. The regulators have taken the common sense approach of ensuring the entry points are regulated. If I know exactly who comes into the park and they use FIAT to buy their entry ticket, I can track their accounts. This way, even if each ride or stand has its own currency, I have full transparency of the people in the park and what they spent to get in.
I obviously travel the world extensively and therefore talk to law-makers, investors, traders, influencers, developers and pretty much representatives from all areas. Each of them deal with their own set of issues as this whole ‘thing’ comes together. One thing that we all agree on though, is that the technology has a big future. Where we all have differing opinions, is when it comes to the validity and the need for all these ecosystem based currencies.
CRYPTOCURRENCY vs VALUE
Why do I separate these two things? At the moment, for the majority of projects, there is only a promise to deliver something. A token or coin, is for the most part not tied to equity or the expectation of profit. This is one of the qualifiers of being a security. Meaning, that the majority, if not all of the tokens or coins on a centralized exchange have been issued with a Howey Memo or a Letter of Legal Opinion stating that they satisfy the requirements of being a non-security. What does this mean in simple English? Any of the legally traded cryptocurrencies on any exchange that allows you to enter with FIAT, has no legal obligation to deliver a profit or share of profits to you. Most state that the use of their token or coin is purely to acquire services on their platform or within their ecosystem. Digest that for a moment. With an estimated 38 projects in the top 100 having a platform or working product, we must realise that we are purely speculating.
More and more each day, we are hearing stories of companies in the space, who are now doing significant volumes and making considerable money as Exchanges or entry and exit points for cryptocurrency trading, being forced to comply with KYC and AML laws. There is nothing wrong with regulators trying to enforce measures that protect investors. Many label these companies as ‘selling out’ and this is not because they comply, but due to the fact they said they never would. For one, its naïve for any centralized body to announce they are above whatever laws may someday pass. If the culture and philosophy is based on being without a central point of failure and not belonging to any one person etc, it would never be set up this way to begin with. Once a company begins to make certain amounts of money and profit, it is logical it will do what it has to for the sake of protection, especially if they are indebted to financiers.
DECENTRALISATION vs CENTRALISATION
For starters, what is the difference?
Centralisation is defined as: the concentration of control of an activity or organization under a single authority.
Decentralisation is defined as: the movement of departments of a large organization away from a single administrative center to other locations.
In simple terms, I know where to go, who to negotiate with and how to shut down a centralized structure. Think back to my amusement park analogy. The entry point where the ticket booth and check point are in a centralized structure, have a person sitting at a booth. The vendors trust this person to fulfill their role and they act as a representative of the sellers within the park. I must trust these people. In a decentralized structure, there is no barrier to entry and the buyers and sellers can interact directly, peer to peer, without third party intervention.
Lets look at the internet as a classic example. The internet is great. It serves a purpose and for the most part is reliable, thanks to it’s centralized servers and structure. However, at what cost? We have to give up our privacy, our information is collected, stored, redistributed, sold and even stolen in some cases. By having entities owning my information means I as an individual, lose power. The internet is the most relevant example of a centralized structure.
Blockchain structure means, I don’t have to go through an intermediary and I am dealing direct, peer to peer. Personal information is not shared, it is not needed, because many people are maintaining these servers. Your privacy and information remains yours and is your basic right.
In the example of a centralized cryptocurrency exchange, the entire premise of the blockchain is bypassed. I have to fall in line, into a centralized system, to trade the tokens and coins that power the blockchain economies. The blockchain is by design decentralized. I have to give my identity to be able to invest in a movement that is designed to protect my identity. This in itself, is extremely telling of just how far we have to go in this journey of realization of Satoshi Nakamotos original vision.
DECENTRALISATION, DO WE NEED IT?
The answer to this is my opinion. Yours is valued and welcome.
The way I see it, is very simple. We deserve to have the right, to protect our anonymity if we so chose to do so. We have the right to own the keys to our holdings. We have the right to chose who we interact with. We have the right to our information and privacy. We have the right to function as people, adults and trusted members of the community. Our power should be in our hands, the hands of many. So for me, this is a resounding yes.