With the United States Treasury Secretary; Steve Mnuchin on his way to China, talk on trading with China is being heated up. However, one vital discussion that would probably not be discussed is China’s rapid head start on Cryptos.
Over time, China has successfully gotten a strong hold on the two biggest Cryptos around the globe. As for the US, there is still an ongoing debate on if to engage in a political or legislative debate on such a matter.
Moreover, the debate will have to hold because China poses a big threat to the economic interest of the US. China has grabbed a large part of the crypto mining strength.
In addition to this, they have even used affordable electricity provided from Inner Mongolia. This electricity has been used to build farms for mining. Meanwhile, they have even built strong mining establishments.
Bitmain is a very good example. The mining farms have done so well. Subsequently, the farms have grabbed roughly 50% of the mining strength of Bitcoin. This has gone on since the year 2015.
This means that since 2015 down to 2018, the Chinese have managed Bitcoin hash. They have grown it from 42% up to 77%.
How Can The US Resolve This Issue?
The Cryptos that China has been fascinated in are nine other than Ether and Bitcoin. The Cryptos are mined via PoW. This is the Proof of Work algorithm. Through PoW, the miners are awarded coins for confirming transactions on the Blockchain network.
Some individuals believe that the US should take action by incentivizing Cryptocurrency entrepreneurs in the country. This should be done instead of being in talks with China to quit taking advantage of the US.
Meanwhile, the US Congress can begin by advancing a backbone for Cryptos. This backbone will define tokens according to their asset class. Similarly, there is an ongoing debate on if utility tokens should be grouped under securities or something else.
Differing from Ether and Bitcoin, these utility tokens offer services in a particular Blockchain ledger. As a matter of fact, utility tokens are the major instruments utilized via job building industry mods that leverage on the Blockchain technology.
To provide bigger transparency for establishments and investors considering accepting utility tokens, intelligent managerial guidelines should be created. However, if this controlling purgatory is allowed to continue, something worse may happen.
This includes losing companies to countries with transparent Cryptocurrency backbones. Similarly, some US businesses like Basis can shut down. This is due to the fact that it could be considered a security risk by the SEC.
To Wrap It Up
At the end of the day, the US simply needs the right backbone that offers regulations for entrepreneurial startups. For now, there are lots of cryptocurrency startups standing on the edge.
If this edge can be defined for them, it will enable the entrepreneurs to build their businesses in the country. They will have no reason to run to foreign national searching for regulatory and investment transparency.