A couple days ago Binance made a plea to settle with the DOJ and we got a day of red in the aftermath. The interesting thing about this situation is that the smart money and other entities that learned about it first took no action upon hearing this news. In fact number went up during this time (even BNB). Then throughout the day as the news trickled down to the rest of the space the plebs started to panic and we got a pretty solid day of red.
My analysis of this situation was that we would recover instantly, which we pretty much did (at least in terms of Bitcoin). If the smart money does nothing and the only ones selling are the paper handed laggards this is what tends to happen. A lot of liquidity is basically being held hostage until January 10th on the ETF news. No other announcement is going to change that.
There's been a lot of speculation around this whole thing.
First, many are saying this was all part of the plan in terms of approving the EFT. The SEC and USG needs to bring the sector to heel before allowing an ETF to happen. While the logic of this makes perfect sense and I even tend to agree, it's hard to ignore the fact that literally no one was saying this before the event actually happened... even though we all saw this lawsuit coming a mile away as the probe was announced months ago.
Now many are saying the same thing about Tether: That the SEC needs to take out Tether next and establish USDC dominance or whatever the plan is. Again this makes sense but is also a direct knee-jerk reaction to what just happened. What are the odds that it's actually true? Does the SEC even have time to make a move? Certainly they will if they continue to delay delay delay but at the same time Tether is a completely different animal than Binance. The SEC can't just waive a magic wand to get what they want, and there's a mountain of ignored nuance when it comes to these things.
Others still are speculating that this is a huge blow to the alt-market and that Binance will be forced to shut down... which is exactly the opposite of the information we were provided in terms of the plea deal. Once again this points to the idea that paper hands are running around like the sky is falling when all of this seems to be handled in a relatively professional manner.
Where does that leave Hive?
Well it certainly feels like a serious blow to the ecosystem considering that Binance is our number one source of liquidity worldwide. Certainly if we get delisted that would not be a fun experience, but at the same time sometimes in crypto it's a push that's needed to work toward a more robust ecosystem. The shortcuts can only last for so long.
There's a strong consensus on Hive that we definitely need to create permissionless connections to Bitcoin that can't be shut down with a court order. Easier said than done but there is currently more than one party with a vested interest in this outcome.
At the end of the day it's quite clear that crypto can always innovate faster than government can regulate. This is something all the doomers seem to forget. It's much easier to create a breakthrough in technology than it is to lock it down. That's just the magic of open source tech, as it is not possible with technology that is owned in a centralized manner with IP combined with cease and desist legislature. If regulators lock down exchanges then we will move to upgrade decentralized means of exchange. DEX tech is an obvious narrative over the next couple years.
Slow and steady wins the race
It's easy to see a lot of these compliance chains move ahead in the market and think that we are falling behind, but progress in crypto is not linear. When shortcuts are taken they are bound to backfire and short-circuit sooner or later. Regulations always begin with reasonable requests, and then tend to evolve into a completely corrupt system that has little equity leftover for the original users that made it great. A wave of hostile takeovers and forks will inevitably shatter chains that do not serve the best interest of the people. Again, this is only possible with open source code that can be used by anyone. Luckily, as far as we can tell, closed source code cannot gain a foothold in the ecosystem. Example: name one enterprise blockchain. Show me how to buy a CBDC token. It's all vapor.
Multisig
Multisig is great in a lot of contexts, but it becomes a linchpin of centralization on platforms like Link where 5 signatures control the fate of all products built atop of the platform. Many like to compare this to Hive as if it's exactly the same except that we use 20 signatures instead of 5 or whatever else. This ignores the fact that we can elect our representatives in real time. Fuck Around Find Out. To compare that to a handful of static signatures that can't be voted out isn't based in reality.
Conclusion
Make no mistake: crypto is in an awkward position. This is undeniable. The environment is changing, and thus we can assume that continued evolution and adaptation will result as a response to a changing landscape.
What kind of evolution? A full spectrum. Some will bow to the regulators hoping to win their favor. Some will outright reject them. Some will be brought to heel, others will be crushed by the boot. Some will be outcast, and some will be lauded as the 'good guys' with others as the 'bad boys'. Some will be forced to fight and some will claim their hands are tied. The result of flat architecture will always be the same: every door will be opened and every path will be followed... even if those paths lead to a dead end 99% of the time. Surprisingly a 1% success rate is more than enough for a successful evolution to occur.
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