I think this goes without saying: money and financial systems are regulated—to some degree—everywhere in the World. They are regulated by Governments, and there are real penalties for evading those regulations and getting caught. Many of these regulations were put in place to prevent the kind of shenanigans that is commonplace in crypto.
In crypto, by design, there is no regulation, nor is it really possible. This is the something that's special about crypto.
That's demonstrably untrue—at least, that it's not possible. (I'm perfectly willing to believe it was designed to be unregulatable; it's just that, as usual, programmers echo-chambering at each other about how they think the law works didn't actually take into account how the law really works.)
Crypto is becoming regulated more and more as time goes on.
There's nothing special and magical about it; it was just new, and with the US Congress hopelessly dysfunctional, it was not hard to predict that it would take some time for them to actually catch up and start doing something about it.
Beyond the protocol is the arena of application standards and legal jurisdictions, which is the subject of economics.
The real bug is that irreversibility, and immutability in general, isn't possible in centralized systems. Which is why you can never be 100% sure that your bank account won't be empty next time you check. This doesn't happen in crypto.
Sure it does.
In crypto, you have two options when it comes to keeping your money safe:
1. You can try to keep your keys and devices safe from hackers (The equivalent of buying a safe. DIY security) 2. Or you can trust an exchange to keep your money safe.
In either case, don’t be surprised if you wake up and find your account empty.
If by "regulation" you mean an external authority dictating rules to the crypto world, then yes, there is no regulation. But how many times have regulatory authorities for legacy finance lost track of the ball and permitted dangerous activity and even outright fraud? In the late aughts, regulators were so blind to reality that they permitted the Madoff scam and even the completely reckless trade in CDOs & CDSs that tanked the global economy. Then they promulgated "too big to fail" and bailed out the banks that had defrauded us (though at least Madoff went to jail).
On the other hand, if by "regulation" you mean a set of rules that can help guarantee the credibility, transparency and stability of financial institutions, then crypto can absolutely do that via e.g. smart contracts. That regulation would be entirely opt-in and the onus would he be on the buyer to evaluate the crypto for dangerous & vulnerable bits. That may be easier said than done.
Regardless, GP's point is well made, and the story about crypto regulation isn't so clear-cut.
Regulation always comes after the fact. The history of the "modern" banking system is that merchants at some point got bored getting robbed of their gold while traveling from A to B. Also, moving around tonnes of gold is actually expensive and tedious. So, they started sending each other bank notes underwritten by bankers who kept the gold in their vaults. Out of that modern banking and eventually central banks emerged. The notion of keeping gold in a vault became optional some time later. The regulation we have resulted from robbery getting more sophisticated. Initially all of this was unregulated. Regulation just happened as a reaction to all the inevitable bad stuff that happened.
What's a bank: a ledger of value denominated in currencies and a promise to account those ledgers correctly. Why do banks need regulation? Because ledgers are manipulated by people that can and will cheat if they can get away with it.
What's a blockchain: a tamper proof, shared ledger. If that sounds like a useful tool to have in a bank that would be because it is. You need a bit less regulation to keep the ledger correct. But you still need some regulation to ensure bankers use them properly and appropriately. Technology doesn't fix their tendencies to not do that.
Using an unregulated blockchain is not a whole lot different from using bank accounts in dodgy jurisdictions to evade taxes and oversight. Popular with the same types of people for the same types of reasons.
Governments will do it as they need a regional monopoly on their fiat scam. The new centralization and financial tracking are features.
What is policing crypto?
https://twitter.com/bitcoinrabbi01/status/137372358916224205...
Uh.. like what? A highly available distributed database? So grateful that Cryptocurrency teams invented those, what ever would we have done?
Perhaps you expect right:
https://www.theguardian.com/business/2023/feb/06/britcoin-di...
But why?
If you use a debit card, you earn interest on your balance, and there's no anonymity. Britcoin supposedly won't bear interest. How do they implement traceability? Surely not blockchain - that's an environmental disaster. So presumably a centralized ledger, which WILL be hacked, even if the BoE runs it. But they probably won't - the current government doesn't like the state running anything. If the high street banks wanted to offer shitcoin acccounts, they'd already be doing it; so I guess Britcoin will have to be implemented by the sort of people who are already into shitcoin.
[Edit] If you use coins and banknotes, you get anonymity AND interest on your balance. What's the potential benefit of Britcoin?
The fallacy in this argument is that there's something special in crypto that makes this more likely to happen. There isn't. In fact, you could argue that the enormous activity of scammers in this space actually points to some inherent qualities that might be useful beyond just running ponzi schemes and other scams.
One of these qualities is that scammers are unusually aware and mindful that they might get robbed by people equally untrustworthy on the same platforms that they use. So, the notion that that isn't happening on popular blockchain platforms is useful to them, and others. Tamper proof ledgers are useful for all sorts of things. The history of money is basically increasingly elaborate measures to prevent theft, forgeries, and other abuse. People trying to abuse the system are a constant.
Blockchains and other cryptographic tools are just that: tools. I expect banks to gradually incorporate these tools into what they do. That's already happening. E.g. China rolled out the the e-yuan currency last year. Not a decentralized blockchain but it obviously incorporates some of the technology. Other countries are doing similar things.