Mainstream and Beyond: The Future of Cryptocurrency
Cryptocurrency has a different purpose and meaning to everyone. it can be a currency to actively spend and be otherwise used, an investment to “hodl” for financial gain, both of the aforementioned or perhaps something else entirely. Preparing for all possibilities can be difficult to do when accusations of FUD are in no short supply, but it must be done nonetheless. With the overall value downturn in 2018 it’s now more important than ever to step back and look at the big picture, both the good and the bad, to prepare for what’s in store in the coming days, months and years.
Subscribe to the Bitsonline YouTube channel for more great interviews featuring industry insiders & experts
Price Rises… and Drops
Bitcoin was born in 2009 and patiently grew until its ultimate breakout year of 2017, with legions of altcoins following in its stead (upwards of 1,600 to date).
Bitcoin’s first journey to $1,000 USD was a short-lived celebration as the fall of Mt. Gox knocked it back down, a debacle still getting some blame for market woes to this day. It wouldn’t see such heights again until mid-2017. The price rise has been marred with its share of controversy, some of it centered around Bitfinex and Tether but with some speculation going far beyond. The price correction from nearly $20,000 to its current position hovering around $6,400 has sent many running, though many long timers are reminding us to “hodl” and continue to “BTFD” (buy the f****** dip).
Unfortunately there’s a fine line between buying the dip and catching a falling knife, and the line is only that much harder to toe in the absence of a clear bull trend.
In truth, nobody fully knows where cryptocurrency is headed, and while many of us truly believe it is the future of money long term, short term value is impossible to predict. So it is important for us to be prepared for all possibilities, tuning out the “permabulls” and “permabears”, along with whomever else seeks to control or steer the discussion for their own personal motives. With the influx of new users into the crypto space, honest and dishonest folk alike are here in droves and only you can protect yourself. Your holdings are your own, and crypto is for all of us, no matter whom may try to influence the direction of our technological revolution.
Government vs. Cryptocurrency
A war is a series of battles, and cryptocurrency is no different. Our movement has so far been upward with its share of bumps in the road, and patience is our strongest ally. With Bitcoin now becoming a household term, new challenges arise for us, particularly in the legal realm.
Some governments have seemingly embraced cryptocurrency, and some have so far rejected the idea. Others remain to be fully determined, for example the United States, whom are particularly important to watch given their global influence over finance. It was the U.S. who shut down BTC-E and Liberty Reserve both even though neither were based on U.S. soil. Bitfinex recently put in place new requirements for user tax information, while Poloniex is requiring additional verification from their legacy users, perhaps an indication of the more regulatory compliant cryptocurrency landscape coming to fruition. Bitfinex was handed a subpoena by the CFTC in last December, and was recently fined by the CFTC despite the exchange not even allowing U.S. customer registration (though users with a VPN connection haven’t hesitated to work around that, another concern that could change the rules of where jurisdiction lies). This gives us no conclusions to draw on at the moment, only information to be considered as a current or prospective trader in the market.
With the recently announced United States Department of Justice investigation into wash trading and spoofing, along with the infamous Bitfinex’ed recently popping his head back up for a quick tweet on this, household and institutional investors alike await the outcomes on all of the above matters.
— Bitfinex'ed 🔥💥 (@Bitfinexed) June 13, 2018
Granted, this isn’t the first federal investigation into spoofing, though the stakes are no doubt much greater now. Some cryptocurrency exchanges are pushing back against recent government challenges. For example, Kraken declined to comply with a New York Attorney General’s request for information sent to multiple exchanges. Whether good or bad news awaits, it its imperative we all have open and honest discussions about these important events without feeling bullied or intimated.
Right to Privacy, Safety Against Scammers
So-called “privacy coins” are also perhaps facing their greatest challenge. Amidst reports that Japan’s Financial Services Agency (FSA) is pushing back against privacy-centric coins, Coincheck has made the move to delist Monero, DASH, and Zcash. This is particularly noteworthy as Japan is known to be a very crypto friendly nation that’s still ironing out is policies, which we will likewise have to wait on.
Leaked U.S. intelligence documents gave us a better idea of how governments view privacy coins. Their attempt to crack Monero was one case which could also have a serious impact on the future of these coins and how they are treated by law enforcement. The right to privacy is something we all have, but it is not free; rather it is something that requires our continued vigilance and we must treat it as such in the face of such obstacles.
The free reign of ICOs is over, and unlike the early days scammers are now facing legal consequences for their actions. The SEC even went so far as to set up a fake ICO to educate investors, a surefire sign they are fully inserting themselves into the playing field. Vaporware, or even existing coins that have little to no practical use in cryptocurrency, may very well not last. The time is rapidly approaching where both regulators and the market itself will quickly lose patience and tolerance for projects without a clear purpose and objective.
Safeguarding Your Satoshis
Beware of signals groups which may not be looking out for your best interests. Learning technical and fundamental analysis takes time and hard work, but the resources are available to do it. In this environment you’ll be much safer and better off relying on knowledge from a source you know has your best interests at heart: you. Hope for the best and prepare for the worst. “Hopium” affects us all, but it shouldn’t be a part of your investment strategy.
There is no need to mince words on this bit of advice: don’t needlessly keep your money on exchanges. Even given the assumption every exchange is completely open and honest in their practices, anything can go wrong with centralized power.
The importance of having control over your own money can’t be overstated. You may rightly ask if this logic should also be applied to real life banks, and while that decision is entirely up to you, it can be stated with reasonable accuracy that cryptocurrency exchanges are not at the stage of development that banks are. It is undeniably safer to keep your funds in your own hands in the digital realm, given the hacks and complete collapses of past exchanges. Fortunately for us decentralized exchanges do exist, and while they are in even greater infancy than centralized entities, this is the future if we truly do want cryptocurrency to be a completely decentralized world of money.
Keep vigilant, stay aware of new developments, and always keep your satoshis safe. In conclusion I leave you with a quote from Satoshi Nakamoto himself:
“A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990’s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them.”
Do you agree with this advice? Why or why not? Let’s hear about it in the comments.
Images via Pixabay
This piece reflects the writer’s personal opinion and does not necessarily represent the editorial policy or view of Bitsonline.