Hardcore bitcoin anarchists love the unregulated nature of bitcoins and fight against any form of regulation, but I believe bitcoin can thrive with regulation, and we can all have our cake and eat it too.
The beauty with bitcoin is regulation cannot be enforced on the entire bitcoin community and all bitcoin users. So those anarchist, drug dealers, hitmen, mafia, preppers need not worry, because they can continue to use an unregulated uncontrolled anonymous bitcoin, but there is definitely room in the market for a structured side to the bitcoin economy.
The bitcoin-central deal with Aqoba and Credit Mutuel allowed bitcoin-central to position itself as a “payment services provider” which adds a few incredibly valuable services to bitcoin.
From a simplicities point of view, bitcoin-central users will be able to transfer funds between accounts of BTC or a fiat currency in the same way we transfer funds between accounts now. Simplicity and comfort, its what we’re all used to.
But critically, funds held with Bitcoin-Central are covered by and backed by compensations laws and schemes to protect customers fiat funds. This is a step in the right direction for bitcoin users who value security over privacy.
But it bears noting a Bitcoin-Central user is still equally as able to participate in the anonymous, unregulated, wild west of the bitcoin world. They merely operate an anonymous account in parallel, and transfer bitcoins between the two as and when they please.
Coinlabs is also doing some very interesting things in the world of bitcoin regulation. While it’s early days, it seems Coinlabs has a strategy to go after high networth individuals looking to invest in bitcoin, but who need the extra security one imagines might be required on an investment worth a few million.
It seems Coinlabs is taking the concept of regulation initiated by Bitcoin-Central, and pushing it that critical step further. They are attempting (and I imagine might be successful) to secure insurance for funds held in bitcoins. If they can pull that off, Coinlabs could reasonably secure $100mil in speculative investment in the bitcoin economy in the coming year, which will be great for the global image of bitcoin and for us small investors, the value of our portfolio.
I’d like to draw a somewhat lame comparison with the ocean. Nobody can tame the ocean and anybody is free to roam it in whatever sized vessel they like (or indeed swim if they’d so prefer) – however harbours are built to protect ships, sea walls are constructed to shelter inlets, tide gates moderate the impact of tidal surges.
Should you choose to float around in the bitcoin sea on your own bitcoin boat in the wild world of the bitcoin shanty singing pirates, nobody can stop you, but if you’d prefer to anchor your bitcoin super yacht in a harbour with sea walls, tide gates and a power hookup, then regulated services in the bitcoin economy make that possible.