The cryptocurrency industry needs to do more to promote encryption, says Meltem Demirors

The cryptocurrency industry needs to do more to promote encryption, says Meltem Demirors – Mail Bonus

“I like to call myself a future or aspiring cult leader,” said Meltem Demirors, head of strategy at CoinShares, a publicly traded $ 5 billion investment firm, Cointelegraph.

Demirors, who first entered the Bitcoin (BTC) space in late 2012, further mentioned that it was “nice to see how big the cryptocurrency industry has become,” noting that people from all walks of life are now interested in cryptocurrency space. As such, Demirors explained that “cryptographic denominations” are bringing people together in a positive way, especially as it gives people a sense of purpose and belonging.

When it comes to regulation – one of the most important issues facing the cryptocurrency industry today – Demirors expressed suspicion. “After being in this industry professionally for eight years, I’m tired of talking about rules, especially in the United States,” she said. While US regulators continue to set a framework for the handling of digital assets, Demirors pointed out that it was “too much talk and not enough sensible action. Demirors also said that a number of cryptocurrencies were trying to minimize consumer use of encryption, which she believes is the backbone of the Internet.

Demirors elaborated on this topic, along with the development of Distributed Independent Institutions (DAOs) in an interview with the Cointelegraph at Consensus 2022.

Cointelegraph: What do you think about the recent US regulatory framework?

Meltem Demirors: I think the Lummis-Gillibrand bill and the Token Taxonomy Act of 2021 were good attempts to classify and classify digital assets. But the challenge I have with so many encryption bills and regulations is that everyone is focusing on financial services and taxation. They focus on where and how we manage, tax and create value for the government. That’s why the biggest issues I’m excited about are those that concern consumer privacy, autonomy and freedom of speech, which are not covered in these bills.

Unlike so many bills that focus solely on the financial services sector, the industry needs to focus on cryptocurrencies such as data centers, connections, calculations, semiconductors, and real-time pipelines that make any technology work. We also need to ensure that the United States is a friendly jurisdiction for people to develop not only software but also hardware that can be used on a scale. Today we have not seen any coherent action in this. The industry has seen a fragmented approach where New York states take a very draconian approach while states such as Texas and Wyoming want to become homes for cryptocurrency mining.

In addition, the right to consumer and financial privacy are not addressed. In fact, most of these bills want more financial supervision. As an industry, it is important for us to continue to push for this, especially in a world where the CBDC is being explored.

CT: Any suggestions on what the cryptocurrency industry can do to preserve privacy and financial freedom?

doctor: I think the biggest movement we’ve seen has been the cryptocurrency war – and I’m talking about cryptography. In the early 1990’s, there was a lot of talk about encryption and the use of encryption for a variety of consumer-oriented applications. Encryption is truly the backbone of the internet and we are seeing a number of bills that are now trying to minimize consumer use of encryption and create backdoors.

However, when encryption backdoors are created, they will not only be used to monitor consumers but will also be used against our government. This is now a matter of national security. That’s why I think the war on encryption is still alive and well. I also think there’s more we can do as an industry to preserve and promote encryption instead of using taxpayers to run challenges that try to break encryption algorithms, like SHA-256, which is the backbone of Bitcoin.

I also think it’s important to preserve code and speech. For example, open source is a big part of the cryptocurrency community along with anonymous designers. Unfortunately, various attempts are being made to hold open source software vendors accountable for the way their software is used, which is contrary to any open source movement.

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In addition, we need to consider the treatment of virtual property service providers, or VASP. For example, if someone is running a node or if two individuals are trading peers on open blockchain protocols, then it is a concern to classify them as VASP and force them to comply with the regulation. There’s a bill now that allows people to report their ID numbers to anyone who encrypts more than $ 10,000. This is ridiculous and we do not have the same principle of cash. These are all aspects of privacy that make it easier for governments to target individuals in the cryptocurrency space, so it’s important for industry to step back.

CT: You mentioned DAOs in your speech at the Consensus, can you share your views on this area, please?

doctor: Yes, DAOs have been interesting because a lot of what I do at CoinShares is focused on strategy, which means investing, but also looking at what’s going on in the cryptocurrency industry and how it applies to the investment world. So I experiment with things that happen in cryptography. For example, I recently joined several DAOs. I joined Friends With Benefits last year, which was my first DAO experience. I also founded two DAOs with friends. One is Hashes DAO, which is a DAO focusing on art collection. Another is DAO called DAO Jones, which is a funny play, but it is DAO’s investment that uses Syndicate, a platform that allows users to create investment clubs like DAO that fit into the legal framework.

I’ve learned a lot about DAO tools, infrastructure and exciting opportunities around DAO, along with innate limitations. The biggest thing I have learned, though, is that all societies need leadership. In particular, societies need strong fundamental leadership to maintain and strengthen societal values ​​but also to push society forward. We have seen so many cryptic societies start with strong leaders, but then those leaders go and challenges arise that divide society. We saw this with Bitcoin – we saw a power struggle five years after Satoshi left the Bitcoin community.

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Overall, I think DAO is an exciting field of experimentation, but from an investment point of view, I think DAO is still very early. There are many who build DAO tools now without understanding what new behaviors we need to focus on. Governance is not a technical or cryptic problem but a very human problem that has existed since the early days of civilization. Although I’m excited about the future of DAOs, I think there is still a lot of work to be done before DAOs can expand and be implemented in a way that allows for good governance.

CT: What are you most excited about in terms of encryption space going forward?

doctor: I’m very excited about community-owned infrastructure, or physical infrastructure. Today, cryptocurrencies are so dependent on central service providers such as AWS being used for utilities. But there are a number of efforts underway to build a peer-to-peer network that enables us to perform calculations, have better communications, better broadband connectivity and decentralization, and make the energy network more resilient. I’m excited to take cryptography and combine it with energy calculations and connections in a new way. This will also make our global system resilient, which is usually accompanied by devolution of power.

I’m also excited about more tools and infrastructure developers. Nowadays the surface of cryptography is so large that it has been difficult for people to enter the space to build. Standardization, shaping and convergence around the core solidarity algorithms are very important. Experiments have been fun but we are now learning what works and what does not. Thinking about distributed identities and verifiable credentials, as well as using Bitcoin as a protocol, also excites me.