Will Crypto-Industry Convert?
According to many crypto-economic analysts, the year 2021 will prove to be even more profitable for the cryptocurrency industry than the year 2020. These speculations are already evident from the growth and the adoption rate that the cryptocurrency industry has seen right from the beginning of the year.
Right from the beginning of the year, the largest cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) have seen all-time highs. Throughout the beginning of the year, both cryptocurrencies proved to remain bullish and experienced a surge in their prices every single day.
However, as the prices for cryptocurrencies increase with time, other factors also come into play that put the investors in bad situations. With the increase in the prices of cryptocurrencies, new challenges related to the transaction speeds, delays, fees, and centralization have emerged.
Out of all the challenges, centralization is one of the biggest challenges that the cryptocurrency industry is going to face. When the cryptocurrency industry was launched, one of the basic pillars of the industry was decentralization. The industry was launched to provide people the opportunity to make money without having to share their personal information.
However, as the mainstream adoption has picked up the pace in the industry, the exchanges are feeling the pressure from the major financial institutions. Although the industry is gaining mainstream success in the current times, the volume can see an enormous increase if the industry fully becomes centralized.
Unfortunately, doing this would completely shake the basic pillars of the cryptocurrency industry. If the fears come to fulfillment, the industry will soon be left with retailers and financial institutions. In the end, the cryptocurrency industry will prove to be another nightmare for individual investors.
One of the most important things to keep in mind is the very nature of the cryptocurrency industry. When the cryptocurrency industry was launched, it was completely decentralized and people were fully satisfied with it. Then the regulatory factors came in to tackle the money-laundering and terrorist funding elements.
Even the exchanges have managed to find solutions and the right maneuvers to tackle these problems, yet the regulatory authorities are imposing new and harsh rules onto the industry.
One of the biggest examples of this kind of behavior has been showing by the regulatory authorities from the United States. Despite the cryptocurrency exchanges trying their best to adhere to all the regulations while being decentralized, yet they are finding themselves at a dead end.
The regulatory authorities of the United States are giving no flexibility to the cryptocurrency exchange are imposing way too many restrictions on them.
According to the newly proposed law, the exchanges will be required to even gather the personal information of people who are making transfers to exchanges and are not registered with them.
In the light of the above events, there are two options for the crypto-industry, either it relocates to regions that let them operate being decentralized or the industry converts to centralization.