1 min read

Imposing stability

Crypto is volatile. People get scammed right and left. There are little to no protections by default. Your primary protections are those you implement yourself. This gives blockchain a bad reputation.

But the state of crypto is actually the default state of the world.

Blockchain is not accepted by many as a technological improvement over existing monetary systems because the average person is financially weak. They don't protect themselves because the banks do it for them. And when the banks fail, the government solves their problems. In the US, FDIC insurance protects up to $250K for every bank account. Banks have to go through an arduous process to get licensed with the US Government so depositors can get their money back even if the bank fails.

Before FDIC, before the federal reserve, before Alexander Hamilton, and before modern economic theory, there was no one to rely on but yourself. If you put your money in a bank and that bank failed, your money was gone. Insurance has been around for thousands of years, but the concept still had to be invented and refined.

Blockchain is a digital representation of humanity. If we want greater stability, we have to build it. We have the benefit of accurate historical records. We can see what's worked and avoid many of the mistakes of the past. When looking for opportunity on blockchain, dissect the real world. If there's stability, it has a source. Most of the time, that stability is imposed on people whether they ask for it or not. We should combine centralized, government-run institutions with decentralized, personal responsibility ethos.

This is how we mitigate the next FTX. This is how we avoid inappropriate government regulation.


P.S. Regulation isn't inherently bad, but self-regulation is preferable.