Bitcoin and the beat of war
Plus how compliance costs could kill crypto innovation and the pipedream of decentralized social networks
Well, the missiles are flying and the price of bitcoin is soaring.
Some think the correlation is clear. Others think that bitcoin is going up not because of increased stability, but because some people think bitcoin will go up around increased stability, whatever that distinction means.
On Monday, I looked at the crypto communities response to Iranian intrigue. Whether bitcoin is a safe haven asset, a peaceful protest, or something else, there’s no denying that its story is interwoven with the larger global political landscape.
Today, meanwhile, I shifted focus to look at reports from Kraken that 1) regulatory inquiries had gone up more than 50% between 2018 and 2019 and 2) the cost of engaging had exceeded $1m.
I tend to think that growth in the costs of compliance are inevitable as governments catch up to and wrap their head around the crypto space. My fear is that it will bifurcate the industry into those whose innovation is limited by the need to raise traditional venture capital to comply on the front end and those who have such massive war chests that they can simple settle with governments over rules they’ve broken on the back side. Either way, I think it means significant lost opportunity.
And speaking of leveraging massive war chests to do pretty much whatever you want, on Friday, on the first Breakdown back from the break, I looked at the Tron acquisition of Dlive (plus accusations of highly centralized wrong-doing on the Tron blockchain) in the context of recent actions by Apple and YouTube against crypto content.
The question, ultimately, is whether decentralized social networks are simply a pipedream?
Happy listening
NLW