Tipping Point: How the Regulatory Ecosystem Can Be Bitcoin-Friendly
Strategy Counsel Corp managing partner Adam Ettinger says Bitcoin is like the early Internet, and past the tipping point
Every day it feels like Bitcoin has reached a tipping point, between news of major retailers like Overstock.com accepting the digital currency to venture capitalists increasing their investments.
One of the important chips still waiting to fall in the Bitcoin ecosystem is clarity on regulation. With the hearings in New York last week, regulators heard from executives at Coinbase, Circle and Overstock, as well as investors like the Winklevoss twins and Fred Wilson. The message was consistent: regulators need to create an environment for Bitcoin to thrive.
Following on this theme, San Francisco-based attorney Adam Ettinger told Bloomberg, “If a state becomes Bitcoin-friendly, it will see a huge increase in companies. That will mean the brightest minds working on some of the most innovative payment technology we’ve seen in awhile.”
As managing partner of Strategic Counsel Corp, Ettinger has spent his career helping entrepreneurs build their companies and has extensive experience in disruptive technologies, from web publishing to user generated content to peer-to-peer networks that traverse national boundaries ad hoc and beyond.
And now Ettinger is applying his experience to Bitcoin. He penned his latest thoughts on his firm’s website in a post entitled Tipping Points: When Law, Sensationalism, and Ecosystem Converge.
In looking for an analog to Bitcoin so as to pattern match strategic decisions companies must make, “the only thing to which I can compare Bitcoin and digital currencies with any justice is the commercialization of the internet itself in 1994-1996,” writes Ettinger.
Ettinger expands on this by proposing four indicators that suggest we are past the tipping point with Bitcoin. Read Ettinger’s full post for his comparisons to the early days of the Internet.
- Does the technology not merely improve the way we have done something, but change who can do it and how they can make money from it?
- Do regulators and courts find it hard to apply highly developed statutory regimes to the new commercial and interpersonal activities enabled? If they adapt the laws, will that enable people and business to massively increase their interactivity and commerce?
- Is the investment community funding not only one aspect of the ecosystem but the entire ecosystem?
- Does it capture the public mind even before they know how to use it? Is it fascinating to thought-leaders?
Ettinger closes with a retort to critics that may say the Bitcoin ecosystem is not mature enough: what’s not there yet will be built by entrepreneurs if the ecosystem lets them.
“Just like eBay built a solution for reducing fraud between purchasers who don’t know each other and live far from each other, the virtual currency ecosystem will build solutions to the concerns voiced now by regulators,” he explains.
Ettinger cites BitGo an one example. He writes, “BitGo has a wallet that utilizes multiparty signatures in a way that makes someone stealing your Bitcoin or you accidentally losing your Bitcoin nearly impossible. These issues were seen as the most serious consumer protection concerns only a few months ago. If we let the ecosystem thrive, it will fix what isn’t working.”
CC image by Yevy Photography