The news that US regulators are investigating crypto currency exchanges for illegal rigging activities should come as no surprise to anyone.
When you are in the Wild West, anything goes, and can go on for as long as no one pulls the plug on it.
But this particular move is all part of the worldwide efforts by regulators and central banks to bring some oversight and order to the crypto world. Think of the Wild West and how law and order came to it over a period once the abuses became so much that Washington got involved. The same is now happening with blockchain and crypto currencies – not a surprise to us at Scotcoin. We have been preaching about how regulation was coming and how this was a good thing for over two years now. Our new permissioned blockchain will handle all these requirements as a prerequisite.
What this also emphasises is how right we were to be happy to remove from Bittrex. The total speculation and pump and dump culture had no part in what we have been building.
There are still people who view cryptos as get rich quick schemes. Indeed I was looking at some exchanges on our Twitter (which please follow!) where someone was looking to buy something he could rapidly sell at a profit. That is actually counterproductive in terms of the evolution of digital currencies. If people are to have trust in them, they have to be sure of the value at any given point. Arguably, the worst offender is Bitcoin – A year ago $1000, Christmas $20,000, now $6500. How on earth can any business plan its forward sales and cash flows dealing with that?
Ideally you want a very slow and steady increase in price over time. Most people will by now have forgotten the German “Wirtschaftswunder” (Economic Miracle) of the 1950s ,60s and 70s. It is a given nowadays that Germany is one of the pre-eminent economies in the world. Not so after WW2 and into the early 60’s. Ludwig Erhard – the then German Economics Minister, equivalent to our Chancellor of the Exchequer – believed there was a way to guarantee economic growth. It wasn’t quantitative easing on a grand scale (as people seem to believe erroneously nowadays). He believed that what gave business the confidence to invest and grow was certainty. So he said categorically that the money supply would grow at 2% pa for the foreseeable future – no more and no less. And he stuck to that religiously for 20 odd years. He was so successful he ended up as German Chancellor.
We at Scotcoin have the same philosophy. We don’t want ups and downs destroying trade. We want trade to grow and grow with confidence, in the way that the German economy grew mightily from the 1950’s onward. If we could replicate that in Scotland we would, as the saying goes, be quids in.