This is an op-ed by Julien Leiniger, Co-Founder and CEO of Relai.
Bitcoin exists for two reasons: as money that anyone, anywhere can use, and as a monetary commodity that is guaranteed not to be diluted or devalued by a central bank. But it’s also part of a program that intentionally takes away the power of insiders — regardless of whether those insiders are big miners or bitcoin whales.
What we’ve seen in the larger cryptocurrency space over the past few years has been a perversion of those ideas and principles. The fact that the SEC is (finally) waking up to these scammers is to be expected.
When profit trumps common sense
The pursuit of massive profits with very little upfront investment of time, brain power, or capital has not only helped crypto-token Ponzi schemes get off the ground. It has allowed rent seekers such as FTX, BlockFi, Luna, Celsius, Three Arrows Capital, and countless other “Web3” projects to be seen as “innovations” rather than mere money grabs.
While it is the job of a venture capitalist (VC) to bet on what they believe will make money and shape the future of technology, the sheer audacity with which Ponzi crypto industry insiders have pushed their agendas in recent years is incredible. We have read stories The former Coinbase manager was sentenced to two years in prison for its users, and we know that Andreessen Horowitz (a16z), one of the largest venture capital firms in the space, I encouraged Ponzi schemes like helium.
The a16z’s marketing approach to its projects has been Cory Clepsten summed it up:
“Most bitcoiners peddling bitcoin buy and hold as much as they can — and the people who love it the most are the ones who never sell. It’s kind of the exact opposite of what you see with the likes of a16z: full frontal attack, marketing across all their channels, and doing huge pumps after That they bought a bunch of cheap Solanas from the central team that controls them in the spring of 2021. They ⏤ and all their VC friends were top selling in late 2021, while claiming to the world that they were HODLing.”
Cryptography has always been a cash grab disguised as a technical innovation
Everyone who knows more about Bitcoin will soon realize that it is not perfect. Fortunately, the block size debate is behind us, but full memory stacks and new things like the Ordinals protocol show that scalability is still something to be fully explored. I believe the Lightning Network, along with similar solutions, offers a viable path toward secure, fast, and affordable transactions, but we’re not quite there yet.
Trying to improve the Bitcoin network is a noble cause, and if you feel it can be done, it is legitimate to try it yourself. But the Bitcoin versions we’ve seen over the years have all failed, in terms of adoption, brand value, and price. We know that ICOs in 2017 were largely cash takeovers among retail investors, with little to no real innovation or market proof yet. Hollow buzzwords like “blockchain” quickly disappeared, only to be replaced by the more vague concept of “Web3” in the wake of the COVID19 pandemic.
Play stupid games, win stupid prizes
Today, there are tHouses of cryptocurrency out there, with a large number of them set up from the start as blatant Ponzi schemes without any long-term vision other than benefiting a small group of insiders. Frankly, I would have preferred to let the market decide its own fate and not the regulators. But the truth is, the US is now cracking down on them after the SEC failed miserably when it came to stopping people like former FTX CEO Sam Bankman-Fried.
This was made clear by SEC Chairman Gary Gensler recently Bitcoin is a commodity Thus, it does not fall within the sphere of his agency. And now, the SEC Binance lawsuitGensler, the world’s largest cryptocurrency exchange, appears to be preparing to crack down on cryptocurrency Ponzis, including vehement accusations against the company itself and also stipulating that a range of crypto projects must be defined as securities. These include big names, such as Solana (SOL), Cardano (ADA), and Polygon (MATIC).
I don’t want to encourage the SEC or any other regulator, because we all know that in the US, we’ve barely managed to avoid a 30% power tax on bitcoin mining. And powerful people who don’t want Bitcoin to win will find other angles from which to attack it. But at the same time, Bitcoiners have been warning about FTX, Terra Luna, and other shady crypto projects since day one. I’m sorry to everyone who burned their fingers and lost money by trusting these criminals, but it’s also understandable that bitcoiners are rightfully celebrating this “I tell you so” moment.
The discussion of crypto securities is also coming to Europe
Love it or hate it, the Market regulation in crypto assets (MiCA) It is the first comprehensive regulatory framework for cryptocurrencies in a major economic region. Unless you think the free market should care about scams and bad actors (which would be a fair point), you’d probably see MiCA as a step in the right direction. At least, it’s a different approach from the “burn it all” vibes we get from the Democratic Party, the Securities and Exchange Commission and other actors in the United States.
But MiCA is the starting point, not the end, when it comes to trying to tame the “cryptocurrency wild west” of Europe. A few days after the signing of the MiCA Act in May 2023, prof Study published by bodies other than the European Parliament Come to the conclusion that MiCA needs to take more steps to really work. In fact, the study comes to a similar conclusion to what we’re already seeing unfolding in the US: it advises lawmakers to take a closer look at things like DeFi, staking, and NFTs. and, most importantly: All crypto assets should be treated as securities by default.
I think that no matter what happens in terms of regulation, it’s important to remember what makes Bitcoin unique and why we’re here in the first place: it’s an asset that you really can own, living on a network that no one can shut down or shut down. controls. that’s it. As Adam Back said recently, Bitcoin is ‘anti-fragile’ to regulatory pressure. And we can already see that this is the main difference between random crypto projects and Bitcoin.
Bitcoin only and non-custodial is the way forward
Again: I’m not cheering for more organization. I believe in the free market, and I believe that with or without laws, bad actors will eventually be eliminated. On the other hand, I feel for everyone who gets scammed and loses money in these shameless cryptocurrency scams. Therefore, I also understand why some barriers are needed, especially when ill-intentioned actors masquerade as “technological innovators”.
Bitcoin-focused companies offering real, non-security BTC will flourish. Players who offer countless shady Ponzi tokens to their (novice) users will not only face regulatory scrutiny, but also lose the trust of their customers when tokens previously promoted as the “next big things” start heading to zero amid stricter regulation.
Now, more than a decade after Satoshi Nakamoto invented a true digital scarcity, the Bitcoin network is stronger than ever as the true cryptocurrency. An undiluted asset, it can’t be easily changed and doesn’t have a small group of knowledgeable founders dictating the rules. I don’t know what the future holds for Bitcoin, but I do know that a lot of things Bitcoin traders like myself say about “crypto” and why Bitcoin is different than ever.
This is a guest post by Julian Liniger. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.