Cryptocurrency Inquiry: One on Blockchain’s ‘Control Problems’

Now in their eighth year, congressional public hearings are the legislative equivalent of intimate conversation: highly unusual and a little bit awkward, like a friend telling you about their wild drunken antics. This week, CoinCon, the primary annual conference for cryptocurrency entrepreneurs and investors, was the setting for an all-too-brief discussion of bitcoin’s “control problems”.

Wednesday’s session was part of a larger effort by representatives from CoinInvest, CoinDesk, IndustryWatch, and Cryptocurrency Congress to introduce the US Congress to the potential benefits and risks of the booming cryptocurrency industry.

Scenes from the CryptoExpo in London, 2018.

In prepared testimony, the Cryptocurrency Congress’s CEO Jason A. Kish explained how blockchain technology will “revolutionize commerce and finance” and shape how the US government, big corporations, and government agencies interact with one another.

Prominent executives in the blockchain community testified at the hearing, such as Jonathan Snow, CEO of ManateeCoin, and John Kogel, founder of Silk Road 2.0 and Altcoin Investor.

These companies are creating the infrastructure for a new generation of distributed cryptocurrencies, such as Ethereum Classic. The peer-to-peer alternative to the modern cryptocurrency, Ethereum Classic offers the freedom of blockchains and the utility of traditional currencies.

“Everything that we are doing today is supposed to have been done before in the same industries, but we had great benefit of hindsight,” Snow told the committee.

In his testimony, Snow outlined the obstacles facing digital asset trading, from trading platforms to KYC and reporting process compliance, and focused on the five-year history of bitcoin and its futures on the CME.

He described the subsequent changes to CME’s bitcoin futures platform and its resulting exchanges, and explained what he views as the flaws in a regulatory structure that he believes needs some work.

“If we don’t work through these issues, cryptocurrency could not only be successful but could lead to the collapse of other markets and lead to widespread consequences,” he said.

On 18 May, Mr. Snow and Mr. Kogel outlined the case for automation in a blog post at CoinKarma. Today, both Mr. Snow and Mr. Kogel were present at a bitcoin revolution discussion event.

The hearings were part of the recent push by the more pro-cryptocurrency side of Congress to address issues surrounding blockchain technology, including the implementation of rules for the $7 trillion financial services sector.

On Thursday, Representatives Ed Perlmutter (D-CO) and Peter Welch (D-VT) introduced the “Fourth Industrial Revolution Act.” It would require the Financial Stability Oversight Council (FSOC) to regulate the virtual currency industry. FSOC is comprised of the heads of the US Treasury Department, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Commodity Futures Trading Commission.

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