Media
The CEO of FTX – Sam Bankman-Fried (SBF) – came out with a long Twitter thread to outline some of the hurdles in front of the cryptocurrency industry and how to potentially handle them in the following years.
Before diving into some of the challenges, SBF outlined what the industry has already achieved. Namely, these include a solid userbase, smart contracts, numerous potential use cases, the beginning of scaling solutions, as well as “an enormous amount of attention.”
Yet, there are quite a lot of hurdles to overcome as well.
The Elephant in the Room
SBF believes that the most obvious thing that’s still “missing” from the crypto market is regulation.
There has been a lot of tension between industry and regulators, and both sides have, in many cases, left feeling frustrated.
One of the things that make it hard for the industry to move forward while also limiting institutional involvement is the lack of a clear process for token issuance, regulation on platform registration, and stablecoins in many jurisdictions.
Moreover, “many regulators have found it very difficult working with crypto companies: instead of working collaboratively, we’ve seen a ton of examples of tension boiling over.”
So, how to remedy the above? Well, Bankman-Fried believes that it’s important to “work collaboratively on ways to address current regulatory gaps,” but also allowing liquidity to move to the US and to Europe, as well as other jurisdictions. He also addressed the issues associated with stablecoin regulations.
Stablecoins are maybe the most straightforward: create a reporting/transparency/auditing-based framework to ensure they are backed as they say they are.
This would solve 80% of the problems while allowing stablecoins to thrive onshore.
SBF also said that there should be standardized markets oversight in a unified regime “that creates similar standards for spot, futures,” and so forth.
The Scales of the Future
One of the things that blockchain-based networks have had hard times with is scaling. There are examples across the board – Ethereum’s sky-high fees, Solana’s blackouts, Avalanche’s issues under high load, and so forth.
So, what matters the most is having a concrete roadmap to scale to millions of TPS, and executing well on it. – SBF said.
He doesn’t believe that any network is there yet, and he also doesn’t think any network is “fast.” Talking about the use cases, he seems to believe that gaming is a very prosperous potential avenue, admitting that “tapping into the existing userbase of video games could be huge – billions of users and hundreds of billions of dollars each year.”
Yet, the UX and UI of existing gaming projects don’t seem to be anywhere near to what’s required for a seamless complementary experience.
Wrapping it up, SBF said that:
If you want to grow trust in the industry, regulation matters. But so does UI/UX, and each scam detracts. Every time we can do something great and beautiful and useful as an industry, we move everyone forward. Every time we fu*k up, we all take a step back.