“When a man’s got money in his pocket he begins to appreciate peace.” –The Man with No Name, from A Fistful of Dollars Even in the romantizations that fill books and films, the Wild West was often not the best place to be.
Take the little bordertown of San Miguel in the famous spaghetti western A Fistful of Dollars, run by two competing bands, the Baxters and the Rojos.
In the film, San Miguel isn’t just dangerous (although the body count reaches over 100 people) it’s also an especially difficult place for most people to earn a living, despite the widespread opportunity.
The Man with No Name (Clint Eastwood): Any town that sells guns and liquor has gotta’ be a rich one.
Silvanito: Not the town. Only those who buy and sell, and the bosses are the ones who clean up.
In the absence of real law and order, the strong push the weak around and take their profit. Thieves prosper, and the rest must accept the hazards of living outside of civilization.
The same could be said about the digital world of cryptocurrency.
Operating in seemingly jurisdictionless cyberspace, the infrastructure that supports the exchange, storage and liquidity of cryptocurrencies like Bitcoin fall prey to the same troubles as the lawless West.
This includes hackers stealing millions with impunity, exchanges closing accounts without warning, charging extortionate transaction fees, holding funds for multiple days before completing transactions, or even engaging in outright manipulations like insider trading.
Is it time to call in the law?
Or, another way of asking this could be: will the crypto ecosystem have any real value within a regulated framework?
For bandits like the Baxters or the Rojos, perhaps not, but for otherwise law-abiding citizens, regulations can have a very salutary effect.
After all, rules and regulations are there to protect the innocent and the weak from ‘might makes right’ corruption, cronyism, and theft.
That doesn’t mean arbitrary regulation by force of state is better than no regulation.
Arguably this attitude arises when governments are reacting to bad behavior, and causes fear that all actors should be thought of as suspect.
Take the recent announcement by crypto-enthusiast John McAfee:
Eastwood’s character in A Fistful of Dollars has the same reaction, despite his role in taking down the bad actors of San Miguel, when government authorities are due to arrive.
Eastwood: Mmh. Well, guess your government will be glad to see that gold back.
Silvanito: And you? You don’t want to be here when they get it, eh?
Eastwood: You mean the Mexican government on one side? Maybe the Americans on the other side? Me right smack in the middle? Oh no. Too dangerous. So long.
Silvanito: Adios.
To get the right mixture, regulatory bodies need to actively engage with the constituents their rules would affect. Those constituents ought to have a say in how the rules are made.
Cryptocurrency communities should be quite good at this, since the very protocols they use to engage in transactions (everything that makes up the blockchain) function as a set of rules requiring consensus, with actors voting on changes with their computing power.
How the West was won.
For good regulations to happen, crypto ecosystem players need to step up.
That’s why the exchange platform Sovren plans to work directly with UK authorities from the very beginning of development.
The goal is to create an exemplary set of rules that protect customers, no matter their size and clout.
The UK is a good place for this to happen, thanks to its financial hub status, protected by a stable common law framework, which guides UK regulators and serves to check arbitrary actions. What’s more, the UK is already considered one of the top 5 most friendly countries to cryptocurrency.
By working within this long standing framework, Sovren and the UK can create global standards amenable to the libertarian impulses of the crypto ecosystem while preventing the worst impacts of cyber lawlessness.
With good standards in place, companies can feel confidence about accepting crypto-payments and trading crypto assets.
Only through this door can crypto truly enter the mainstream.
LEARN MORE BY GOING TO HTTPS://SOVREN.APP
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