Click to Open Overlay Gallery Then One/WIRED Bitcoin has failed . Bitcoin is the future . Bitcoin cannot be regulated . Bitcoin needs to be regulated . The debate over what will happen to the decentralized virtual currency has reached a cacophonous point, and now lawmakers around the world are wondering whether the time has finally come to regulate this emerging technology.
As I have said before, Bitcoin as a virtual currency presents significant challenges to regulators. But one should not be too hasty to regulate Bitcoin, without fully understanding the implications of blockchain technologies more generally, with regard to their impact on innovation, competition and regulation.
With a 5 billion market cap, Bitcoin is slowly making its way into the digital economy, and a growing number of merchants—including Overstock, Newegg, Expedia, Dell and even Microsoft—are now accepting Bitcoin as a possible form of payment for their products. Of course, regulation will be needed eventually, both to address the risks and maximize the benefits of the technology. But it is difficult to regulate today a technology that we do not yet fully understand. Given the experimental nature of blockchain technologies, whose possible uses and applications are still to a large extent unknown, regulation should be elaborated carefully and in a well-informed manner, to avoid precautionary measures from curtailing the future of these new technologies. Why Regulation Is Needed
Last month, the European Parliament held a public hearing (organized by the Committee on Economic and Monetary Affairs) to discuss the need and possible ways to regulate virtual currencies. Invited to this hearing were representative of the European Commission and the OECD, experts and practitioners from the private sector, and myself, as a representative of academia.
Because Bitcoin is a decentralized payment system that operates independently of any government or central bank, people […]
