In the cryptocurrency market, anybody with a laptop, a little coding knowledge and a dream can invent a new asset, programming a financial instrument from their garage, scaring the pants off of regulators like the SEC, and many banks. That’s why it’s so popular among libertarians – it’s liberty money. However, freedom also comes with responsibility. A free market with little oversight and no system of redress leads to widespread scams and other shady projects.
There are many ways to address this issue – for example, asking ICOs to get escrows to hold their funds until they reach key points in their projects, to prevent them taking the money and running. We can also leverage media to exposed poorly-conceived coins. And, as crypto journalist and consultant Juan Galt points out in this interview, we can stick to established projects like Bitcoin.
Thinning out the field
In a market of 1500+ coins, many of which were probably started on a whim, it’s unlikely that most of them will survive the long term. Many won’t ever be widely traded on exchanges, let alone becoming money, being widely used in commerce in any society, and many, such as Ethereum, don’t even intend to become currencies. Bitcoin, being the biggest and oldest cryptocurrency, is one of few which have the chance to gain world reserve currency status.
The gap of libertarian thought
Libertarians don’t want government oversight in most markets – they believe that commerce can work just fine on its own in many cases. However, it does seem that crypto libertarians are overlooking just how out of control things can be without regulation. Fraud is rampant among crypto projects, and the resources we have to address it are still limited.
Crypto start-ups create fancy presentations, write whitepapers, create flashy but meaningless marketing campaigns on any social media platform that will still allow them, raising thousands or millions of dollars. Then when the campaign ends, the projects have little accountability. The tokens are not contracts, and they make no guarantees of any return on investment. Legally, the creators can walk without consequence.
We can expose bad actors by talking about them on blogs and YouTube channels, shaming them for their actions and encouraging others to withdraw support. Or, as Juan suggests, we can ignore them entirely, and stick with Bitcoin.
You can listen and subscribe on Anchor and other podcasting services here:
Cryptonomics – Why Bitcoin Is Still King with Juan Galt