Why Cryptocurrency should not be regulated?
Introduction to cryptocurrency
The concept of cryptocurrency has been gaining increased popularity in the past decade. Bitcoin is the first currency to enter the crypto market. Since its launch in 2018, there have been many investors making their way to the crypto market.
Cryptocurrency adopts the concept of blockchain technology. Every transaction breaks down into many units. These units are then stored in a ledger. There is no central record to it. And every transaction undertaken using crypto cannot trace back to any central database. Yet another advantage of cryptocurrency transactions is the advantage of decentralized financing. This means there is no central bank, regulatory agency, or third party involved in your transaction. Transactions undertaken using your crypto wallet like nft-code.io are directly credited to another user. Cryptocurrency, tokens, or coins uses to complete such a transaction model.
Over the years, cryptocurrency transactions are becoming an acceptable mode of payment. There are many platforms accepting cryptos. This includes gaming, healthcare, automobile, and insurance companies. The cost of Bitcoin skyrocketed when Tesla declared their acceptance of crypto payments. Aside from Bitcoin, there are other players now in the crypto market. Ethereum, Shiba Inu, Polygon Matic, and Polka Dot. While Bitcoin is at an all-time high, the above cryptos help reap benefits to your investment.
The fun fact about crypto is that is self-regulated. There are exchanges now in the industry buying and selling cryptos. These exchanges consider cryptos as a safe and long-term value-generating investment. Cryptos replacing fiat currencies seems to be a distant dream. But, your investments in the crypt are sure to reap benefits.
There is no intrinsic value attached to cryptocurrency. Cryptocurrency investment is volatile. The market opens with high anticipation. Any witnesses heavy slash in prices during the day. The surge in prices could be due to celebrity endorsements. Or tweets from famous personalities or an industry accepting cryptos. This is good news for market players who wish to invest in crypto.
An important point of consideration about cryptocurrency is that it is not regulated. This point is an advantage and disadvantage of cryptocurrency.
Many countries are now working on legalizing and regulating crypto transactions. Before legalization, let us understand why regulation against crypto transactions is not recommended.
The spirit of cryptocurrency is lost: Yes!! The very essence of cryptos existence is its decentralization philosophy. There is no involvement of any central bank, third-party, or regulatory agency. This makes this model a popular choice amongst investors. The non-involvement of these big institutional names empowers an individual. This allows investors to manage their money without anyone watching their transactions. Regulations, if any will kill the spirit of cryptocurrency.
There is no room for innovation: Crypto is innovative. The blockchain technology built-in with crypto hinders any industrial intervention. There is no financial agency empowered to track digital transactions undertaken by you. Yet another advantage is the decentralized finance model. There is no investment required to build infrastructure and networks to track transactions. Cryptos are not bound by any central transaction. This allows cryptos to undertake easy and effective fund-raising projects. There are no complex security laws. This will allow investors to easily put their money.
Accessibility to the global market: Miami and California are accepting crypto payments. These places are also open to job opportunities and cash flow entering the market. Stricter regulations will reduce these opportunities. This will prevent the growth of an economy at large.
Slash crypto prices: China is the first country to ban cryptocurrencies. This ban also created a decline in price in the last two weeks. While this is a drastic step by China, other countries may not follow suit. India and US are the leading economies with crypto investments. But, these countries may not ban the use of cryptos completely. The idea of regulating cryptocurrencies has already created a stir in the investment world. This will result in crypto value going down at an all-time low.
Regulated or non-regulated, an investor needs to play safe. Ensure that you buy and sell cryptos from the right exchange. Do not fall prey to online scams and phishing. Tread slowly, make the right investments. After studying regulations, we need to wait to understand how countries will respond to cryptos.