There are many who still question whether cryptocurrency will be banned by governments. The reality is that it is here to stay.
We know things are changing when companies start to add cryptocurrency to their balance sheets. Many claim that a lot of entities are on the sidelines awaiting regulation. That might well be the case. However, not all are going to sit around while letting the opportunity pass them by.
The fact of the matter is regulation isn't going to have much impact. As stated numerous times, cryptocurrency operates outside the bounds of any single government. Perhaps there is a major point of vulnerability in the applications. Nevertheless, that is something that can be worked around also.
What is happening is that whatever regulation is being put in place, developers can simply code around it. Governments are doing nothing more than providing a glorified roadmap.
Litecoin And MimbleWimble
There was an announced that appeared to fly under the radar for the cryptocurrency world. Perhaps because it was so long in coming that most people simply forgot about it. However, it could be a major arrow fired in the tug-o-war between the Wild West of crypto and governments.
Litecoin is releasing an update that will provide an opt-in, privacy booster. This will allow users to hide transactions.
Blockchain transactions are completely transparent. Every transaction along with the associated wallets is published on chain. This data can be seen by anyone, including authorities. Wallets are anonymous to the degree where there is no name or identification associated with them. However, since most exchanges require KYC, it is not difficult to track from the exchanges to the wallets.
The addition of MimbleWimble makes it harder to track the transactions. Essentially, it makes a blockchain operate similar to the banking system where the exact transactions are mostly hidden. Unlike the banking system, a court order cannot force revealing.
Mimblewimble is a privacy-focused decentralized protocol that derives its name from a tongue-tying spell that was first made famous in the Harry Potter book series. The protocol has a confidentiality feature that allows users to conceal transaction information. It also provides a framework for other blockchains to enhance the usability of their cryptocurrency.
As the cryptocurrency ecosystem is built out, the options are only going to expand. Nevertheless, the addition of privacy features is going to get the regulators and government hacks up in arms.
Stodgy Accounting Firm
All of this might be reason to shy away from cryptocurrency. Only those who are true believers would step into the arena in the face of what could be on its way.
None of this scared the likes of Michael Saylor or Elon Musk. Both have companies that invested in cryptocurrency. It was just announced that Tesla had near $2 billion worth of Bitcoin on its books at the end of 2021.
Saylor and Musk are risk takers. They are in arenas where it is part of the game they play. To get ahead, they have to be willing to stray from standard practice and innovate. This is how they got to where they are.
Hence, they might not be the best examples of validation for the industry. Perhaps we should look elsewhere.
Fortunately, the industry has another company adding cryptocurrency to its balance sheet. In my mind, this is the one thing that now validates cryptocurrency as a legitimate entity, not going anywhere.
Accounting firms are not known for risky behavior. They tend to be rather conservative with investments and money making decisions. Thus, when one decides to enter, it is big news.
KPMG Canada has added Bitcoin and Ethereum to its corporate treasury. This is the first time the firm has invested directly in cryptocurrencies.
This is not a bunch of Wild West type risk takers. This is a division of one of the largest accounting firms in the world. For that reason, them putting Bitcoin and Ethereum on their balance sheets is enormous news.
It is only the starting point. The firm is looking to move into other areas of cryptocurrency and delving deeper into the industry.
“We’ve invested in a strong cryptoassets practice and we will continue to enhance and build on our capabilities across Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and the Metaverse, to name a few. We expect to see a lot of growth in these areas in the years to come.”
When firms like KPMG get involved in cryptocurrency, it is game over. There is no turning back.
This is a stamp of approval that the industry was waiting for.
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