It's time to think about what new products can be realized with crypto. People are screaming for regulation because it's so insecure to trade Crypto. But what fueled the growth of the Crypto ecosystem is exactly the lack of regulation. Big players don't rip of small players because they are not yet allowed to do so. Trading moves from exchanges and plattforms to your computer or smartphone which holds the private key to connect to the global ledger. NO more performance than that that is needed. You could trade with a Atari from the 80s.
Lets start with the problems of the regulated financial system.
The problem of traders today is that they are front runned by actors that buy their order from their brokers instead of them routing the request to the exchanges. CFD brokers run statistics over their customers to see if the customer has a good or bad track record and decide based on that if they route the request or take the counterposition by themselves and profit. There is no better way to raise your odds and the customer would loose his money anyway. But these orders never hit the exchanges where good players could profit from the faults of bad players.
The exchanges on the other hand are mostly run by bots and algorithms or hig frequency traders. Since big players do their business over the counter to not move the prices too much, the exchanges are more for painting the tape and lurk individuals into trades that market makers can earn fees on. The marketg makers don't only trade for free but they also get a share in the fees that are paid by the retail traders to the exchange. This way the exchanges guarantee liquidity. To make people trade more the market makers move the prices little by little to collect the stops at important marks and turn around in a blink of an eye. The whole system has to be paid for. Lots of jobs depend on the fees since this is the only legal way to make money from trading.
To be able to absorb unlimited liquidity in a market with limited supply most of the trading volume is generated on furtures exchanges. Its a multitude of the physical underlying that is traded on futures markets, which are more or less a casino. Almost every retail trader looses money on stock markets. The brokers try to grow their income by finding ways to raise the time that the accounts are expected to survive from 3 to 4 months.
Crypto has not the single answer to that but it doesn't make it much worse. In fact there is no way to make it much worse. The problem in this game is that the order books are centralized and this information can be sold as well as players with more ressources can go closer to the central system to have faster conections. Most of the regulations in this field are tackling this problem. But what if we found a way to remove this problem?
Crypto deosn't have the answer yet. But it has lots of ideas and ways to implement them. This has the potential to disrupt the trading business. So far we rebuild everything that the tradional financial system provided us with for ages. Exchanges, brokers, stocks, currencies, futures, options, lending and cfds. But what about prediction markets?
Why not bet on the closing price of a index twice a day anonymous and encrypted and settle the orders automatically every day? This model was proposed by Andre Kostolany in 1991.
Why not sell securities in a inverse dutch auction to guarantee a fair outcome and the best price for every buyer?
These are experiements. We already build tools that allow 5 year olds to create a security and list it on a market for trading by others. We build decentralized exchanges that integrate the order book, the settlement and the broker as open source, secured and run by incentivized individuals paid for according to the actual usage of the system like contractors. We own the interface. We own the network. Compare this to what you thought to be possible 5 years ago.
The future is bright.