The cryptomarkets as they stand today often resemble the environment of a completely unregulated domain. For many in the markets, this is something that is most desirable because it comes with excitement and a chance for incredible profits. That is so many still perceive the digital currency domain as something of an online casino where money can be made and lost in equal measure.
Other traditional financial fields include equity and debt markets do not possess even a fraction of the same dynamics. Of course, one of the key reasons for this level of volatility is the fact that many pump-and-dump traders coexist with intentional scammers and misinformation.
In the same ecosystem, however, incredible and valid innovations are being presented to the public on an almost weekly basis. Many of these hold the promise of a technology that could positively impact the entire planet and the value of having an incubator for these ideas is crucial for sustaining them.
Yet, all of this has to change of the cryptomarket to attain a global acceptance and recognition. The volatility has to be reined in and the regulation has to be set up firstly for the protection of the end users. Being that 2017 showed the monetary potential of the digital currency, it is up to 2018 to clean house inside of the digital currency markets.
One of the biggest issues facing the cryptocurrency space is the same as the one facing almost all aspects of daily life – the influx of faulty information. Often dubbed “fake news”, the phenomena is actually a lot broader than the political term that gained popularity during the 2016 US presidential elections.
Back then, the concept applied to the information that has been spread about a particular political candidate which included a combination of true data and made up facts. The second category was often done in a way that creates a plausible lie about the same person or their party.
With the idea of false news in politics, the purpose never was to completely fool everyone, being that mainstream media easily debunked all of them eventually. The creators of fake news clearly understood that their misinformation has a short life span. But, by bombarding those undecided voters fake news creators were able to make them sway away from their candidate’s rival.
Essentially, this form of self-propagating lies was used to stop a candidate from getting votes from the undecided camp. This simple idea proved to be more than effective when it was utilized in a country where social media accounts are abundant and any fake news was able to spread like wildfire.
For the cryptocurrency field, there is no fear that the same exact process can take place, but regardless of this, space is still filled with untrue information. Here, one of the biggest objectives of 2018 will be to somehow find a way and stop this faulty information from spreading in the development and investor circles.
Wrong Information that gains Positive Results is still a Problem
ZenCash is a perfect example of why faulty information should always be avoided, even when it provides seemingly beneficial effects. This cryptocurrency got a particular public recommendation back in October when its price moved from $10 to around $25.
Nothing fundamentally changed for this blockchain network, but for the investors, its underlying tech was simply unimportant. Instead, they were looking for positive signals about the investment and once they got it, they started pouring money into it.
Of course, ZenCash could end up being a great investment but the point is that the same publication could have loaded up on the same digital currency. Now, there is no way to know either way for sure. For anyone who is not new to the investment domain, this is a huge red flag.
This is all clear indication that the digital currency markets lack regulation but also disclosure requirements. Without these in the picture, the same field will be a no-go zone for many investors, regardless of the potential profit margins.
Community Mediation and Oversight
Right now, the digital currency development community must gear up for the process of devising and then setting up an analytic entity. This body would have to be legitimate in the eyes of all in the community but also unbiased and focused only on the process of informing the community.
Any trace of conflict of interest would have to be nipped in the bud. Otherwise, the dilemma about the legitimacy of any information coming from this entity would continue to linger above all of its data.
Naturally, there is no blueprint on how the same body would be formed or who would be in it. Also, some envision this as only one half of the solution, with a third-party oversight body also being in play. Now, the problem with this type of thinking is that it ends up being infinitely scalable.
Why not add an additional oversight body to the previous oversight body, and so forth. Cryptocurrency is not alone in this problem. Other digital ventures, like online eSports competitions, are presented with the same problem. How to make sure no one is cheating and no one is bending the rules too much?
There is no clear mechanism to know either of these two, especially because the margin of allowed bending was never established in the first place. The same is true for the digital currency developers and investors.
Work in 2018
Many are expecting big changes on these issues in 2018. Yet, it is important to recognize that a lot of these boil down to wishful thinking. The community almost unanimously desires global and official recognition, even those who appreciate cryptocurrency independence and decentralization.
Still, this is not enough to actually move things forward. As the history of hard forks shows, attaining consensuses inside of digital currency networks is often very hard. Sometimes, the disagreement leads to the same network splitting in two.
Because of this, it would be more realistic to hope that the process of housecleaning will at least begin in 2018. One thing is certain – it will not be completed in the next 12 months.