The Established Financial System Is Trying To Hold On
History repeats itself especially in the technological world.
We see the same thing happen repeatedly. A new technology comes out that could potentially disrupt the existing system. Those who are incumbents dig in to protect their territory.
Do they do this by innovating and out "teching" the newcomers?
No, they turn to politicians via lobbyists in an effort to thwart the threat. Regulation is put in place and they do all they can to hang on.
Does this work?
In the end, no it does not.
This is the optimistic aspect of cryptocurrency. The present financial system is hunkering down. We see crypto companies that have to go through the regulators to conduct business. In other words, they can operate only if the incumbents approve.
Monopolies also offer no protection. Advanced technology always usurps what is in place. We saw this with the record companies, long distance phone service, and video rental.
Cryptocurrency is "a better mousetrap". The benefits far exceed what is presently in place. From a technology standpoint, the writing is pretty clear. The existing system cannot stand up to what is coming.
Right now, we are in the development phase. Cryptocurrency does not have the infrastructure to take on the bankers and other aspects of FinTech. This is a temporary measure. Over the next couple years, we will see a great deal more progress made.
This is something that is difficult to see. The companies that are presently entrenched in the financial system are large, powerful, and structured everything to benefit them.
Nevertheless, progress starts to chip away at the foundation of what they built. This happens in every era where major technologies arrive.
Think back more than 100 years, the automobile was not openly welcomes. Those who benefited from a world built around horse and carriages did not go without a fight. How did they do it? By having laws enacted to "protect" the populous from the "danger" of horseless carriages.
Obviously, looking around our cities today, this approach did not work.
Yet, that is the exact playbook those in the financial system are utilizing. They are using politicians, their size, and their wealth to try and crush a superior technology.
History reveals that this model tends not to work. If the technology is solid and truly offers a benefit, it will succeed.
Since cryptocurrency passed the hype cycle, it is time for people to realize the true power of the technology.