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The need for self-regulation of Bitcoin Derivatives [message #74] Sat, 11 March 2017 03:50
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Today, the world's first Bitcoin Exchange-Traded Fund (ETF) was officially rejected after seeking SEC approval. This can be seen as a major set-back for anyone else seeking to implement Bitcoin in modern financial markets. Others, can view this opportunity to re-evaluate the current situation and all factors involved and simply create something better.

"The commission ultimately concluded that the price of Bitcoin is still too vulnerable to manipulation for it to be certified. "Regulated markets related to the underlying asset provide a 'necessary deterrent to manipulation,'" the commission wrote in its analysis. "To the extent there is some question as to the degree to which Bitcoin is subject to manipulation... regulated markets relating to Bitcoin would help answer that question and address instances of such manipulation. Two other ETF proposals pending before the SEC, and there are significant differences that might allow either one to succeed" -

Those whom been involved with Bitcoin for quite a few years can all agree on one thing: Bitcoin has been like the "wild-west" on steroids. Most of us can vividly remember exchanges going bankrupt after thieves broke into their servers and stole all the coins, investment funds that became ponzi schemes, and price manipulations by malicious miners and robotic traders. This wild ride has shaken, stirred, and affected investor confidence that could have supported a positive SEC assessment.

Truth be known: the SEC and other financial regulators are desperately trying to keep up with the ever changing crypto-currency ecosystem. This complex independent peer to peer economic model conflicts with their own ideologies focusing more on centralized oversight rather than consensus among those involved within the industry. Most Bankers are only beginning to understand Bitcoin, the Block-chain, peer to peer networks, and how these concepts can transform finances for many generations to come. Pioneering Bitcoin users, realize the risks involved and already understand that any oversight from regulating agencies won't affect their own confidence in protecting themselves with market risks. Some enthusiasts actually fear industry regulation due to a threat for interference in what most view as a "true free-market". The concept of a "free-market" having regulation is seen as somewhat of a contradiction by some people, although nearly everyone can agree that some kind of government oversight is required for mass-adoption and integration into the current system.

Controlling Money Laundering, Fraud and Terrorism activities has been the general mission for current regulating agencies, their focus has been directed towards the large exchange platforms and services. Yes, they should be a priority, although the effectiveness can be argued since the very foundation of fiat money is unlimited untraceable units of wealth, this undermines the transparent and limited supply ideology of Bitcoin. Simply asking for and verifying passport and identification documents will never fully stop criminal activities using Bitcoin. The problem is not born from a "new age" payment method; Digital currencies using very advanced cryptographic encryption along with algorithms for controlling inflation, payment processing, and transaction fees... The problem is the current financial system.

A new approach of self-regulation and education regarding digital commodities/currencies and their derivatives is the only way to move new concepts forward by minimizing risks involved.

Beginning at the protocol level for crypto-coins; implementing a user-based voting system should become priority in the future. If account addresses can be rated by users of the network to publicly display the potential risks involved in dealing with certain merchants, exchanges, or users on the network this could allow for simple due diligence to be performed and prevent fraud. Decreasing the resources used for regulating by centralized third-party oversight formed as "regulating agencies". A simple self-regulating protocol with transparent integrity checking will automatically assist legal proceedings of criminal activities warranting investigation or prosecution.

Regulating ETF and other crypto-coin derivatives & investment assets is a very difficult task to accomplish. If this can be achieved; it would most certainly be a positive thing for Bitcoin. In our most humble opinions: Bitcoin and related investments should not be traded on the major markets alongside ETF or considerably safe hedge funds or labeled as such. A new side-market should be designed and implemented with caution, one that embraces the fundamental transparency of block-chain technology. As described above: a user-based voting system for accounts should also be implemented, along with a proprietary method for pricing shares based on real performance of companies or hedge funds, and backing their non-speculative worth using digital commodities like Bitcoin. Profit Hunters Club is currently working very hard to create the foundation required to move these experimental technologies further ahead and allow them to have a greater impact upon global financial markets and e-commerce in general.

Profit Hunters Club
March 10, 2017

[Updated on: Thu, 16 March 2017 00:33]

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