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Digital Economy:
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Who do you think will win the battle for decentralization: regulators or free market?

10 July 2017  |    286
Who do you think will win the battle for decentralization: regulators or free market?

Regulators

Maxim Ivanov, Moscow Digital Academy

Battle for decentralization is likely to be won by regulation. And it’s not about their need to take control over every financial sector but rather market demand itself. Decentralization has a number of advantages as well as some shortcomings. The key ones are: illegal deals, drug trafficking, arms trade, money laundering. You can also add funding shady organizations; so-called “hypes” which promise super profits and high dividends. Cryptocurrencies volatility among other things is partly a consequence of regulation.

Considering these factors the cryptocurrency hasn’t become popular as means of payment yet because you can buy goods at one price today, and tomorrow, owing to high fluctuation the same goods can cost several times less.

Taking into account the volatility, the mining is quite risky too. One should also have in mind the cost of equipment failures, systematic complication of calculations, electric power costs and many other factors, which make such business more risky and less profitable. I think those who begin to mine now carry serious risk taking into account the current situation.

Market

Oleg Bogdanov, Chief Analyst, Teletrade Group:

At present one can say for sure that regulators put up their hands facing blockchain and cryptocurrencies. They have understood that it is impossible to forbid and it is easier to forbid sunrise. Now regulators try to lead the process, develop regulation methods of the cryptocurrency market, consider the possibility to introduce national cryptocurrencies (Russia, Kazakhstan, China, etc.) .

Market

Iliya Buturlin, Lecturer, Financial University

In fact, blockchain is an alternative to state regulation, new technologies have allowed participants to avoid red tape and bureaucracy, therefore, the market has won at the moment. But so far capitalization of all cryptocurrencies is not too large - about $100 billion and this is tiny amount if compared to financial relations at the state level. Also regulators do not introduce blockchain because now there is no legal base and infrastructure. It will take several years to create them.

Market

Alexander Bespalov, General Director of Crypto Company, Senior Partner, General Director of Bespalov and the Partners Consulting Group

Banks and regulators have already lost the battle for decentralization, although they probably have not understood it yet. Attempts to regulate the market, which was anonymous and decentralized from the outset, which doesn't have borders - these attempts were foredoomed to failure from the very beginning.

Of course, in the near future we will see a lot of attempts to impose taxes on users, introduce identification procedures and so on.

But the tendency which was initially embedded in blockchain technology has already changed our world, and sooner or later it will be necessary to admit it.

Market

Konstantin Vorobyev, GOLOS.io blogger | Blockchain and blog platform

The blockchain issues "its own" money which the state cannot control. Nevertheless, some "totalitarian" states will try to turn off the monetary tap for people, but such countries as Russia move towards not only "permission" but also integration of the blockchain into the national infrastructure.

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