Blockchain In Chains: How The US Gov Lost A Multi-Billion Dollar Industry...
Plus: The Countries Thanking Us For Handing It Over.
In the 90's American investors became rich investing in any company with ".com" in it's name. Did the company need to be making a profit? Nope. Did they need a plan to eventually make a profit? Again, no. But that didn't stop a company from being valued at $50 million.
Predictably, reality caught up with people, and it all came crashing down.
Now imagine if the US government responded by making it illegal to invest in tech - claiming it's just too risky and they're doing it for our own good.
But among those tech stocks were companies like Google, Apple, and Microsoft - what would have happened if we treated them the same as the companies that simply existed to cash in on the hype? Those legitimate companies would have moved somewhere that understood the difference.
That's exactly what the US government has done with crypto after any company with a token took a similar path to the .com's of the 90s - they went up fast, and crashed even faster.
But unlike in the .com boom, the US government left legitimate companies worried that lawmakers couldn't tell the difference between them and the bad apples.
Scared out of Silicon Valley, so they built Crypto Valley...
Switzerland saw where we screwed up and made sure the blockchain and crypto industry knew - their leaders have made an effort to understand what blockchain technology is, and how cryptocurrency works - so there won't be any irrational laws written by ignorant politicians coming anytime soon.
That's the pitch they made while US politicians like Brad Sherman ranted about crypto only being useful to criminals and terrorists (while taking political donations from credit card companies that would later be charged for funding black market gambling, but that's another story... one I wrote here).
Now Switzerland hosts over 800 blockchain and crypto companies - valued at over $4 billion dollars.
Not a single one accused of being a scam. Not a single American is safer because these companies are over there instead of here.
The end result - thousands of jobs lost, and millions in tax revenue from the companies themselves, and all those employees.
To be clear - I mean 'scared out of Silicon Valley' literally...
The best example would be Facebook's crypto project "Libra". Obviously, Facebook started here, so did the majority of the 20+ companies that are still partners.
Grasp how insane this is - other countries lobby hard to get these multi-billion dollar tech and financial companies to set up shop in their homeland.
But for the US, these companies were ALREADY here - we didn't have to convince them to come, we just had to not scare them away.
In the case of Libra, Switzerland even passed new regulations around stablecoins (cryptocurrencies that stay at exactly $1 in value) in preparation for their arrival.
When those of us in the US hear the word 'regulations' in regard to crypto, we assume it's bad news. But not in Switzerland, their regulations were written to actually help Libra operate in their country.
These are red flags that should have caused US leaders to say 'wait a second, something doesn't seem right here' - that should have been obvious when we saw another wealthy, first-world nation doing everything they could to convince companies we were scaring away into moving to theirs.
Did they think Switzerland was working this hard just to get a bunch of awful companies to come there and launch projects doomed to fail?
But not a single US leader suggested that we pause, and attempt to understand what was happening.
Possibly the most damaging consequence so far...
Pushing Libra out of the US is having additional consequences beyond the examples given so far.
We're now hearing rumors that China began developing their own 'global cryptocurrency' with the idea that they would need to compete with Libra.
But thanks to US lawmakers, Libra is frozen in it's tracks as they make it clear they'll need to jump through a series of hoops to get their approval - all while China keeps moving full speed ahead.
The first cryptocurrency backed by major financial players was going to be pegged to the USD - but US politicians are so out of touch, the first one may end up being pegged to the Yuen and backed by Chinese bankers - all while those same politicians ramble on about protecting us.
Seriously, this is scary stuff.
Irrational fear, and unfounded paranoia...
Anyone who makes decisions based on those feelings is unqualified to be a leader, yet they are the guiding factors of our leaders - and I can prove it.
It wasn't long ago I read the headline "Uber’s First Earnings Report After IPO: $1 Billion Loss".
Remind me again - which blockchain company lost a billion dollars? (The answer is none of them).
Yet, somehow not a single US politician or government official has mentioned the idea of banning citizens from investing in ride sharing companies.
Actually - the opposite. Uber going public so everyone can lose money with them was actually celebrated, and the SEC hasn't second guessed their decision to allow it, at least not publicly.
...odd, isn't it?
We used to be a country that ran towards the unknown...
It's how we put a man on the moon, it's why Silicon Valley is located here.
But i'll be fair - the paranoia didn't come from nowhere.
We were told we were safe, then 9/11 happened. We were told if we wanted that safety back we needed to go to war, then we invaded the wrong country. We were told the stock market was doing great, and when it came crashing down learned the biggest and 'most trusted' financial institutions worked together on what was basically the biggest scam in the history of the world.
Maybe it isn't so surprising that now when we hear of the 'next big thing' we immediately prepare ourselves to find out it's another lie.
But in the case of blockchain, it wasn't a lie.
A poll released just last week of over 1000 executives shows 42% of companies earning upwards of $1000 Million (USD) per year are implementing blockchain technologies.
That is massive. This level of adoption is like when the internet went mainstream and every company had a website or was at least planning to to soon.
For the first time in a long time, the US is a spectator instead of the star when it comes to this 'next big thing'.
While the initial mistake may be somewhat understandable - to not correct it would be unforgivable.
Thankfully, there are a few lawmakers who get it, and the bill that would put us on the right path is floating around Washington DC right now.
But it's been awhile since we've gotten an update, as elections seem to consume our leaders when they're still months away. The media doesn't help as they also focus on the insults flying in both directions regarding who should be in power next, instead of how any of them are using the power they currently have for the good of the country.
Ironically, one of the few things sponsored by politicians from both parties is the above mentioned cryptocurrency bill.
It's hard to imagine me thinking politicians are more useless than I already do, but if they screw this one up - crypto valley here I come, and i'm not kidding.
Ross Davis is the Editor In Chief at the Crypto Press Association, overseeing a global team covering everything related to cryptocurrency and blockchain technology.