From scaling to securities, the environment and the SEC, here’s what you need to know.
So much has been said about , , , and over the course of the past few years that it’s almost impossible to keep up with what’s fact, opinion, or a mixture of both. The industry moves fast, is always in flux, there’s so much at stake, and we’re still building a collective understanding between the vast and global spectrum of players involved. Further, in the digital media landscape in general, and specifically in the realm of and media, there’s a trend towards sensationalism that makes gaining a nuanced understanding of important issues something of a challenge.
As the teams building out the infrastructure of a future work towards and the next phase of development comes into view, a few fallacies linger on from ’s salad days that are worth addressing. Some views are held by the general public, while others are more commonly uttered in the crypto-sphere, but here are the 6 biggest misconceptions about and right now, and what’s being done that proves them wrong.
Cryptocurrency mining is bad for the environment
By now, you’re familiar with a popular narrative that often arises when discussing or : that via Proof-of-work algorithms consumes more energy than — insert emerging economy nation — and is contributing to the environmental downfall of the Earth.
There’s just one problem with these gleefully apocalyptic appraisals: all of the data upon which the entirety of this alarmist coverage is based was whittled up by an ethically suspect lone blogger who estimated his numbers, flubbed his methodology, and completely overlooked fundamental aspects of the issue at hand. A deep dive in Hackernoon by Robert Sharratt lays out just how badly your most trusted sources got this in an excellent takedown — ’.’ It’s a must-read.
A even identified 65 use cases for technology that will help the planet and the fight for environmentalism. Projects like the are creating new models for sustainability with . And as development continues towards a Proof-of-Stake model that is far more energy efficient and environmentally friendly than the Proof-of-Work models that dominate technologies today, we’re moving towards a future where this issue will diminish.
bitcoin is cryptocurrency is blockchain
If you’re reading this, the likelihood is that you’ve explained your interest in tech to someone, only to receive a blank stare in return until you drop the other ‘B’ word — . Although trends in this regard are moving fast in the right direction, many people still equate with and with . However, ’s market dominance in regards to other — near 100% for most of the currency’s existence — sits at 50%, down from 85% less than two years ago and up from a recent low of 33%. Although the crypto craze of 2017 has clearly diminished, it has laid the foundation for a global ecosystem of that proves that there’s a lot more to than just .
It’s also become evidently clear that and are just phase one in the long arc of , and technologies like ’s programmable smart contracts and decentralized apps are the future. Recent reports have indicated that ’s global developer base — the BUIDLers working on the infrastructure, solutions, dapps, and protocols of the network — (and that’s a conservative estimation.)
Check the speeches of any of tech’s greatest figures and they’ll echo the same: the projects and industries with the most developers get the best results. That’s why sectors like decentralized finance, enterprise solutions, gaming, and media integrated with tech are flourishing already.
All cryptocurrencies are securities
Some and that launched through the ICO process are indeed unregistered securities. For example, or that provide dividends, , or share the same qualities as typical stock will result in the classification as a security. However, the emerging reality is that not all are securities.
The U.S Securities and Exchange Commission has . More recently, senior members of the including Chairman Jay Clayton and Director of Corporate Finance Bill Hinman have been playing ping-pong with public statements echoing positive sentiment. Most recently in March, Clayton stated: “A digital asset may be offered and sold initially as a security because it meets the definition of an investment contract, but that designation may change over time if the digital asset later is offered and sold in such a way that it will no longer meet that definition.”
Regulations are notably slow to change and while necessary to protect individuals from scams and malicious actors, it’s worth noting that should be approached with a modern viewpoint. New regulations will need to take into account the various types of models.
Ethereum Can’t Scale
Scaling a decentralized network’s ability to handle transactional volume without sacrificing security or speed is undoubtedly a difficult problem to solve. However, some of the smartest minds in the world are currently working on solving scalability through Layer 1 (e.g. sharding) and Layer 2 (e.g. state channels, plasma) solutions. Many of those solutions will launch into reality this year, and ConsenSys founder Joe Lubin stated at his SXSW Interactive keynote this year that the network — with layered solutions in play — .
All new technologies take time to mature and develop. has made significant strides towards becoming the base layer protocol of Web 3.0. The overall ecosystem continues to show remarkable signs of growth, and it is now evident that the roadmap towards scalability is clearly laid out and achievable.
Cryptocurrency is only used for nefarious ends
As a private, secure, and global network for transactions, have provided incredible utility for transferring value in conflict zones, for remittances, retail payments, and yes, also for darkweb transactions for illegal goods. However, Chainanalysis, a leading research firm has shown that is . The Global Drug Survey (GDS) when it comes to purchasing or exchanging value for illegal services — and you’ll probably find that those decrying have little issues with cash.
The murky techno-underbelly of darknet transactions and being used for illegal purposes certainly make for , but by now — with many of the world’s leading institutions like Facebook and JP Morgan on the verge of launching their own digital currencies — it’s clear that the shady reputation of ’s earlier days was a factor of the technology’s status on the fringes — and that we have now moved on to a more mainstream era.
Tokens are useless
ICO mania resulted in thousands of crypto and projects aiming to tokenize the world. Although many of the less fundamentally sound projects from that wave have fallen by the wayside, what we’ve gained is an ever-growing ecosystem of ingenious, functional, resilient, and truly remarkable -based projects bringing the potential of to reality.
Unique applications are gaining traction. uses a novel model to create DAI, a stablecoin pegged to the price of one. Maker (MKR), the second in the MakerDAO system acts as collateral to maintain DAI’s stability and lets holders vote on initiatives proposed in the MakerDAO community. The is making incredible inroads towards rewiring how we interact with the Internet, and other such as Augur’s REP are utilized to operate the system by acting as validators for prediction events. is used to validate the veracity of newsrooms on its network. The use cases are growing from theoretical to executable, and , and it’s a wonderful thing to see.
Published at Mon, 25 Mar 2019 18:09:03 +0000
