Sam Bankman-Fried, CEO of FTX (SBF), posted a lengthy Twitter thread outlining some of the challenges facing the cryptocurrency industry. He also suggested how to deal with them in the coming years.
Before we get into the details of some of the issues, SBF will outline what the industry has achieved. These include a strong user base, smart contracts and a variety of use cases. They also indicate the start of scaling solutions.
There are many other obstacles to overcome.
The Elephant in the Room
SBF believes regulation is the most important thing missing from the crypto market.
Regulators and the industry have been in a lot of tension, which has led to both parties feeling frustrated.
The lack of clear regulations on platform registration and token issuance is one of the obstacles that hinder the industry’s ability to progress while also restricting institutional involvement.
Sam Bankman-Fried, CEO of FTX. Source: Bloomberg
“Many regulators find it difficult to work with crypto companies: Instead of working collaboratively we’ve seen a lot of tension boiling over.”
How can we remedy this? Bankman-Fried believes it is important to work together on ways to fix current regulatory gaps, but also to allow liquidity to move to the US, Europe, and other jurisdictions. He also discussed the problems associated with stablecoin regulation.
Stablecoins are maybe the most straightforward: create a reporting/transparency/auditing-based framework to ensure they are backed as they say they are.
This would resolve 80% of the issues and allow stablecoins onshore to flourish.
SBF also stated that there should be standardised markets oversight in a single regime “that creates comparable standards for spot, futures, and so forth.”
The Future Scales
Scaling is a problem that blockchain-based networks have struggled with. There are many examples: Solana’s blackouts and Ethereum’s skyrocketing fees; Avalanche’s problems under high loads; and so on.
It is important to have a clear roadmap and to execute well on it. SBF stated.
He doesn’t believe any network exists yet and he doesn’t think any network can be “fast.” However, he does believe that gaming could be a very lucrative avenue. He admits that tapping into the existing userbase for video games could prove to be enormous – with billions of people and hundreds of billions each year.
However, existing gaming projects’ UX and UI don’t seem to meet the requirements for a seamless complement experience.
SBF concluded by saying that:
Regulation is essential if you want to increase trust in the industry. UI/UX is also important. Every scam takes away from trust. Everyone moves forward when we do something beautiful, useful and great for the industry. We all take a step back every time we do something wrong.
Marla Brooks – Financial Analysis
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