Cryptocurrency: Threat Or Transformation?

The consensus is definitely not it.

Is cryptocurrency a threat to the stability of the global financial system or is it something that is going to truly transform it? The answer depends upon who you ask.

People are all over the place with their beliefs. Of course, much of this has to do with ideology or whether one stands to gain in this situation. There are many who are going to end up on the losing end of this equation. For this reason, they are going to fight it at every turn.

We also see a number of people who do not understand what is taking place. This is often tied to generational outlook. It is something we are witnessing with the transformation of work. Cryptocurrency is a technology that potentially can disrupt most industries. Many cannot fathom that possibility. Here, again, we see the need to resist what is taking place.

Some do see what is possible although they understand a lot is still uncertain.

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Ex-SEC Chair On Board

It is sad the present SEC chairman takes such an adversarial approach to cryptocurrencies. Perhaps part of that is the fact it is his job. Nevertheless, not all carry that same viewpoint.

Former SEC chair, Jay Clayton, has an extremely optimistic viewpoint regarding cryptocurrency. Since leaving his government position, he is now working within the industry.

We can put Clayton in the camp of cryptocurrencies being transformative.

“I see digital assets, whether [they are] in the form of a tokenized traditional security, a stablecoin or a new type of asset, being part of our global infrastructure,” he said in an interview with Blockworks.

Those who are proponents of what cryptocurrency can do often start with the idea of efficiency. The existing financial system has a lot of friction in it. Is this by design? More likely a natural outcome of gatekeepers instilling themselves in the process. Here is where they ensure they have value, even if it ends up being detrimental to the overall system.

Exactly what form those digital assets will take is yet to be determined. “You need to distinguish tokenization and crypto technology from cryptocurrencies,” Clayton said. “If you look at the prospects for the combination of tokenization and smart contracts in our financial infrastructure, two things stand out,” he noted. The first is efficiency gains that are available in the existing infrastructure and the second is the opportunity that efficiency brings to reach additional markets and create new ones, he added.

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Cryptocurrency, naturally, seeks to remove a lot of the "excess" from the system. Since it utilizes blockchain as the validator, 3rd party services are no longer required. These entities can slow down the process while also adding another layer of cost.

As Clayton said, digital assets offer the potential to open up entirely new markets. Innovation is in the early stages, something that will lead to more advanced results down the road.

However, the chorus of naysayers is large and powerful. This is something that the industry is going to have to fight.

Control Or Eliminate It

This appears to be the mindset of many, especially those in position of power. Whether we are dealing with Jamie Dimon, Senator Elizabeth Warren, or Gary Gensler, all believe that cryptocurrency poses some threat to the stability of the global financial system.

Here is where we see the "we must regulate it" idea coming into play. Of course, it might be worthy to point out the fact that we had a lot of regulation in place before 2007, yet the bankers were able to collapse the entire global economy. So perhaps regulation is not a fool-proof way to generate economic stability.

What really is happening is we see a new technology that is a threat to the present system. Whenever something is as disruptive as the entire cryptocurrency industry is, we see a lot of carnage. There are going to be a lot of losers. Thus, any means will be employed to protect what is taking place.

It puts an industry at a crossroads. Do we see forward progress due to the ability to innovate and develop? Or is the process hindered as the same favorite entities are protected, the ones who caused many of the problems in the first place?

If it is up to the individuals just mentioned, we know the answer. Their view is either to control cryptocurrency or eliminate it. Either way, their positions, and their of their "friends", are protected. In other words, it allows for "business as usual".

To this group, they do not want transformation unless it is under their control. Unfortunately, regardless of the industry, disruption rarely comes from within. It is almost exclusively from the outside where this occurs.

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The Power of Web 3.0

We can get caught up in the definition and views about what Web 3.0 is or what it is not. However, when we move past that, we see how truly transformative this is.

To start, we have people being rewarded for doing that which they were already doing. Probably the best example is gaming, where we see the #Play2Earn model starting to take hold. Billions spend hours gaming, most of them doing so simply for the enjoyment of things. The financial gains were non-existent. In fact, we often saw people spending large sums of money to participate.

That is no longer the case. Blockchain gaming is evolving to the point where being rewarded for gaming is a via approach. It will not be surprising when we have millions who earn their living simply through gaming.

Web 3.0 is also the mechanism that is going to usurp a great deal of what the opponents of cryptocurrency are trying to accomplish. This is the Trojan Horse in the battle. It is a mistaken outlook that is going to seal their fate.

They look at cryptocurrency as a financial instrument. For that reason, they believe that it is part of the financial industry, focusing upon DeFi. While there is that component, that is only a small piece of what is taking place.

Decentralized Finance (DeFi) is not a separate sector. Instead, it is going to be the mechanism that penetrates every industry. We will see this merged in everything that we do. It is going to be a part of the Internet of Things. Social media and gaming will have this woven throughout. All facets of the entertainment world will be consumed with this.

In short, nothing is going to be exempt from it.

Here is where trying to separate and control it is a mistake. The threat exists in the fact that cryptocurrency (digital assets) are primed to disrupt all that we know. The tokenization of everything is not something they are prepared for.

One person's threat is another's transformation. The world is encountering something it never saw before. We are witnessing a complete change in the monetary system. Unlike the last 70 years where this occurred for bankers via the Eurodollar system, we are now seeing it involving everyday people.

It is something the establishment is not prepared for. They are going to use their old tactics to try and stop things. Control or eliminate is their mindset.

The challenge here is that we are seeing the transformation happen on a global scale. Each day, forward progress is made with the industry growing. The numbers just keep growing. Few enter cryptocurrency and then fully leave. Overall, the trend is up.

It all comes down to time. The industry is gaining more power with the passage of time. The longer the establishment keeps going in circles, the greater the more impotent they become.

Essentially, cryptocurrency is a threat while also being transformative. In the end, it simply depends upon one's perspective. For those who believe the present system requires protection, opting for the status quo, cryptocurrency is a major threat.

However, for those who view the flaws in the system and believe better can be achieved, cryptocurrency is the transformation people are looking for.

The next few years will determine how this all plays out. Ultimately, it is probably best to bet on the innovators. Their track record is much better than those who try to stop said innovation.


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' a threat or transformation' ?
i believe just trying to transform the system is a threat by nature
i have a question though, and it really bugs me a lot
in your article you say that control it or eliminate it...
what if you cannot control it, but on the other hand it is impossible to eliminate it....
believe me this question is the main issue of conversation with my guys in real life ,especially those who have not still been involved in cryptoworld

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It is probably a threat for tyrant governments, for example the government of my country (Hungary). Cryptocurrency can transform (improve) the lives of the people, so the government will not be able to keep our incomes under the local minimum wage anymore.

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Threat to governments and their associated corporations.

This is where the proverbial rubber meets the road. We will see how much more powerful things become over the next couple years. My guess is they are about to get overrun by what is taking place.

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The "control or eliminate it" is from their perspective.

As I wrote in the past, cryptocurrency is similar to another ledger based system that existed for more than 70 years called the Eurodollar system. It is a system of lending and borrowing based upon money created by banks on top of the Eurodollar. It is outside the reach of any central bank or government.

We are seeing the same thing. I doubt very likely they have a prayer at stopping what is taking place.

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Global financial system must be changed and cryptocurrency itself is a change.

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Well it is replicating the Eurodollar system which was built on top of the USD that was parked outside the US. This means the banks could establish and create money in whatever form they wanted.

This is exactly what crypto does except it enables for average people to do it.

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Now that I have been playing around with DeFi more and I am starting to understand it a little better I am really excited about what it holds for the future. I can't wait to see how it grows and evolves. I think P2E gaming right now hasn't even begun to scratch the surface of what it can be. Most games are just glorified faucets with a few exceptions. As that shifts, P2E will really boom.

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I dont think much of this scratched the surface. We are in for a lot of changes over the next few years.

Even putting some HBD into savings provides some clear insight into what is possible. There is a lot taking place so we can expect more opportunities to come down the road.

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I do not admit that they are convinced that Crypto will pose a danger and threat to the global financial system, they know very well that this is a good and wonderful technology and will not affect in any way, but the real threat to their positions and their useless historical ideas.

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I don't know how anybody would not see the transformative power of cryptocurrencies and crypto technology, but I guess line you said, they are the ones most likely to loss if cryptocurrencies becomes the order of the day in the financial world

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They can be against cryptocurrencies as much as they want. Eventually they will accept it. Impossible to stand in the face of incoming technology

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I like the new technologies more than I like the old technologies. Why would I want to wait 3 business days for some bank to send me my money when there are better alternatives available? It just doesn't make sense unless you want to main your control. These politicians deserve to get left behind and thrown out.

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Billions spend hours gaming, most of them doing so simply for the enjoyment of things.

The majority of them are not playing the type of games that the playtoearn hype has on the menu. Nevertheless, it's WEB3, the industry is expanding and "part of the transformation".

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The majority of them are not playing the type of games that the playtoearn hype has on the menu.

That is because it is still limited and starting. There will be more games that have it implemented.

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For an opponent of cryptocurrency to be credible, a minimum requirement is to have at least an accurate understanding of this space. I am really amazed with Elizabeth Warren's courage in touching things that she doesn't know. She has been displaying such ignorance since the height of the occupy movement. It's a shame to have a politician like her who aims at protesting or stopping things that she's clueless about.

. . . we are now seeing it involving everyday people.

It is something the establishment is not prepared for.

The involvement of ordinary people and if it is really true that the establishment is not prepared for this, I find this type of development very encouraging!

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Yes, they keep saying that... its threath to financial system... i would its its threat to US Dollars and other fiat currencies and banks but i am cool with it... transformative power of Blockchain and crypto will be awesome.

For me only, I don't work for a while, i write articles here and get HIVe... that's cool!! ... I don't get money in many writing platforms they say content is not according to guidelines, not having the proper perfect grammer, all that jargon.

But I have the potential to earn HIVE here and more than make a living. Just a example.

Another... Save money earn interest in DEFI like Anchor protocol that provides 19% on decentralised UST... or for that matter earn money and save money and put it in HBD and earn 12% in savings account and HBD is a decentralised argorithmic stable coin...

There are too many benefits because of blockchain technology that can change lives and give people like me hope to make something in the end!!

Certainly, crypto can be more than our savior, its oue elevator. Besides, why to support a system that powering those entities political and powerful financial authorities, when they have failed to distribute wealth equally, and supporting the big rich folks.. Ha tired of them...

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Could the government control crypto-currency? It feels like the Wild West on the Blockchain, I am wondering if a government would have the juice to step in and introduce something to the chain that would allow them to regulate?

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