Regulations Will bring A Bitcoin Society & Two Tiers
FTX is the best reason, whether deliberate or unintentional, to further regulate bitcoin on-ramps and eliminate the prospect of self-custody and genuine ownership.
There has been extensive coverage of the FTX catastrophic collapse, including current developments as well as historical warning indications. Will this have an impact on bitcoin in the future? I’m not interested in shitcoin casinos since most of them will be regulated as securities exchanges or shut down due to flagrant fraud or insolvency This is nearly a done deal. What about bitcoin, though?
Let us guess on the impact FTX will have on the future of bitcoin.
Bitcoin usage will divide – gradually at first, then abruptly. It’s been in the works since the creation of the genesis block on January 3, 2009. Bitcoin will be used in two ways: as a black market item or as paper bitcoin on authorized exchanges. This has nearly always been the case, but the distinction will become clearer soon enough. What exactly do I mean?
Regulators will regulate; that is what they do. Although Bitcoin cannot be regulated, custodial ramps like exchanges, brokers, and lenders can and will be assaulted.
Self-custody will very certainly be legislated out of the market for the majority of purchasers. Buying bitcoin and taking complete custody of it on these platforms will become extremely difficult, if not impossible. This date is approaching quickly.
Anon, hurry! You still have time until the on-ramps close, but how much time do you have? Six months or three years? The timetable is hazy. It will soon be difficult to purchase bitcoin on an exchange and then transfer it to self-custody, where you keep your own keys. Under the pretense of regulatory compliance and consumer protection, most custodial institutions – trusted third parties — will be prohibited from permitting users to withdraw. You will purchase paper bitcoin, often known as counterfeit bitcoin: These are IOUs used to get a fictitious exposure to the price of bitcoin. You will not be able to claim and redeem the IOU.
Do you want to keep that crypto in your possession using keys that you control? Forget it since it will be really difficult. Few exchanges will enable users to self-custody, and even fewer will fight for financial autonomy. All they will do is sell paper crypto or shut down most enterprises.
On the one hand, users will acquire crypto IOUs from custodial firms, which will need complete KYC (know-your-customer) information, automatic tax reporting, and no privacy. Bitcoin will be utilized as the fundamental asset in a worldwide financial monitoring network unlike anything we’ve seen before. Companies that are regulated will emerge.
Regulated corporations will build a compliance network on top of Bitcoin, preventing you from owning what could have been genuinely yours. Perhaps they will even wrap it in a central bank digital currency (CBDC) to safeguard you from bitcoin’s volatility. You will be pleased with your purchase of paper bitcoin.
On the other hand, bitcoin will thrive as the instrument that it has always been: black market money. This will mark the beginning of a new age for Bitcoiners with no fiat, i.e., Bitcoiners who operate full nodes, have complete anonymity, and pay peer-to-peer for goods and services with their hard-earned sats. Most users will utilize CoinJoins to only share what they want with whoever they want.
To safeguard their personal information from being spied on by chain analysis businesses, most users will utilize CoinJoins to only share what they want with whom they want. Some will refer to it as a circular economy, while others will refer to it as the black market. It will run entirely on trust webs. When feasible, crypto will be purchased between peers without KYC, using cash or bank wires. It will be a little breath of fresh air in the age of digital monitoring, and it will persist until the rest of the phony Bitcoin network, suffocated by regulation, eventually collapses under its own weight owing to large quantities of fractional reserves. Bitcoin will have succeeded in liberating itself from governmental intrusion and financial parasites.
However, that path will be lengthy and winding.
Conclusion
Until then, the bitcoin price may be severely repressed for several years, and self-custody may be stigmatized, with large penalties and government-sponsored intimidation akin to Executive Order 6102. Are you prepared, anon? Don’t pass up this opportunity.
This is your time to make amends and do what is best for you and your family. Tick tock, next block until then.
