The Cryptocurrency markets are like the wild west. That is what people say. However, they mention this fact as if it were bad news. They use “wild west” pejoratively and condescendingly. They view a wild west market as untamed, chaotic, and destructive. I say cryptocurrencies markets are destructive, but it is a kind of creative destruction. It is destructive evolution, and it is healthy and sober.
People who criticize the “wild west” nature of crypto markets are generally ‘control freaks.’ They cry for regulation and control and violence. They beg for government force against people willy-nilly. I say no to regulation and force.
The destructive, yet creative process of the cryptocurrency market is a good thing. It is tearing away old processes, systems, and habits of thought. It is preparing people for real freedom, real free market competition — not this pseudo-freedom deployed by government thugs.
So how exactly are the cryptocurrency markets unmaking the old way of doing things and engendering this destructive, creative process? I will provide one imminent example.
Tearing Down Old Systems
As I am penning this article, people are engaged in verbal warfare on my Facebook page about the price hike of bitcoin cash.
They believe price hike is fictitious. It is the result of “insider trading” on behalf of Coinbase, they say. They decry “insider trading” as evil. In this sense, they also seem to hope some kind of punishment befalls the company or the people involved in this malicious “insider trading.”
I do not.
What allegedly happened at Coinbase is based on an emerging, competitive market environment. The fact this “insider trading” may have taken place is good. It will help undo people’s belief that some type of intervention or outside authoritarian control is necessary to stave off apparently unsavory human action.
I do not believe insider trading is a problem, though. If people have the inside scoop, because they work for a company — good on them! That is part of the game. If they were smart enough to work for a business that deals directly with these markets, they deserve that kind of information. Who cares? It is not like this kind of insider trading in this ecosystem can be easily stopped anyway.
Blocktower Capital’s Ari Paul summed this up. He said, “It’s literally impossible to prevent. A team has to integrate a new coin on to the platform. There’s no way to keep a secret that requires a team’s involvement. And there’s no way to prevent those who know the secret from secretly buying cryptocurrency…If you want fair, cryptocurrency isn’t for you. Stick with assets that are based on trusting the regulatory and legal infrastructure.”
If you want “fair” cryptocurrency isn’t for you. He nailed it.
With that said, I understand “insider trading” can leave a bad taste in people’s mouths. If this is a big enough problem for the people, then leave it to the market find solutions. Do not believe men with guns should rush in and save the day.
Destructive Evolution of the Marketplace
Nonetheless, the aforesaid act of “insider trading” is bringing anarchism to the people and preparing them for freedom. For the first time in history, a market exists that is not easily thwarted by governments or petty tyrants. In this way, people must rely on their creativity and problem-solving ability to deal with activities they dislike.
The cryptocurrency market is now so diverse, sprawling, and decentralized that governments are already being made irrelevant. There are multiple initial coin offerings per day, many new crypto markets opening up, and decentralized exchanges being perfected. There is no way a government possesses the resources to systematically regulate and control all of this action, primarily since many of the systems in question use impenetrable cryptography to function.
Indeed, old processes of operating are being destroyed, and new ways are being erected. The wild west is being preserved, which is good. It is the natural way of things. This represents destructive evolution within the marketplace, and it is fantastic. It is helping to create an economy and build a new world.
Welcome to it.
What do you think about “insider trading”? Can the marketplace handle these kinds of problems? Is creative destruction a good thing?
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