Anyone who knows anything about government, in general, knows that it likes to grow. This was true before Alexis de Tocqueville identified that principle in his massive masterpiece Democracy in America and it is no less true now. The only thing that really changes is what direction it’s trying to grow in.
One direction you can always count on government growing is towards anything that is currently outside of its reach. One of those areas right now is blockchain. Blockchain is a decentralized system of currency and information exchange not tied to any one government or its currency. Which of course means that it is not regulated by any government and that in turn means that the government doesn’t much like it.
A while ago, we talked about a lawsuit that the SEC brought against the digital payment processor Ripple. That lawsuit was considered by many to be an attack on the entire cryptocurrency world. Now, there are signs that the SEC will be making further moves to try and regulate, or at least contain cryptocurrency to minimize its effect on the US and other economies.
We see this in the recent appointment of Gary Gensler to the head of the SEC. Gensler comes with an impressive resume. He has served as chair of the Commodity Futures Trading Commission and at the moment is a professor at MIT. MIT may or may not be something you would immediately associate with blockchain but his focus is on teaching blockchain and digital assets. As such, he will be the first head of the SEC with extensive knowledge of cryptocurrency. However, is that going to be a net gain or net loss for those like TARTLE who push for decentralization? The signals are mixed.
On one hand, Gensler has openly praised both bitcoin and blockchain technology, remarking on its potential to be a ‘catalyst for change’. However, he’s also talked about crypto and problems with fraud and manipulation. While we would never say there haven’t been at least some scams and manipulation in the crypto world, it’s dwarfed by issues with the stock market.
Just look at all the insanity created by the Gamestop situation. A bunch of hedge fund managers were betting against the company’s stocks and shorted them, which of course drove the price down. Then a small army of independent investors, some of them amateurs getting into the market for the first time, disagreed and started buying up the troubled store’s stocks, driving them not just up, but through the roof. The result has been a small panic on Wall Street as some hedge funds teetered on the edge of collapse and of course an ongoing roller coaster ride as Gamestop stock rises and falls in ways that have nothing to do with the company’s performance.
What this has done has exposed just how easy it is to manipulate the stock market if you have enough money to do so, or enough people getting together with a small amount of money each and acting together. Point being, the SEC might want to look into securing the Dow Jones before it goes adventuring into cryptocurrencies. Sadly, that is not the way things typically work. Despite the fact, blockchain is much more difficult to manipulate and commit fraud with than the traditional market you can count on the SEC to start poking around and trying to figure out how to manipulate the crypto market for its own ends.
How to prevent that? One way is to decentralize yourself from the system. Start educating yourself on cryptocurrencies and getting a little yourself. How to get some crypto, you ask? You can sign up with TARTLE and share your data. Payments are made with Bitcoin so just by sharing your data you are contributing to making the crypto world stronger and helping to decentralize your finances at the same time.
What’s your data worth? Sign up and join the TARTLE Marketplace with this link here.
Anyone who knows anything about government, in general, knows that it likes to grow. This was true before Alexis de Tocqueville identified that principle in his massive masterpiece Democracy in America and it is no less true now. The only thing that really changes is what direction it’s trying to grow in.
Speaker 1 (00:07):
Welcome to TARTLE Cast with your hosts, Alexander McCaig and Jason Rigby, where humanity steps into the future and source data defines the path.
Alexander McCaig (00:24):
Well, welcome back to TARTLE Cast, everybody. Happy to have you here, listening, watching, wondering. We would love it if you would take a quick look at the screen back here. This is TikTok, the TARTLE official page. We've had some videos that have gone kind of viral on here, and we'd love to have your support and join in on the conversation, which is extremely active-
Jason Rigby (00:47):
Yes.
Alexander McCaig (00:48):
... with the comments.
Jason Rigby (00:49):
That's always fun. There's some new ones that are really cool.
Alexander McCaig (00:51):
Yeah. They're always flying in. I really, really enjoy the community on TikTok and their involvement with us. It's a great dialogue. And if you would like to be a part of it, and if you don't have TikToK, I guess you can sign up and follow us. That's tartle_official.
Jason Rigby (01:05):
Tartle_official on TikToK. Hey, Alex.
Alexander McCaig (01:08):
Hey Jason.
Jason Rigby (01:09):
Let's talk about SEC.
Alexander McCaig (01:12):
What is it about the Securities and Exchange Commission?
Jason Rigby (01:14):
Securities and Exchange Commission.
Alexander McCaig (01:17):
Everybody just tuned out.
Jason Rigby (01:18):
I know.
Alexander McCaig (01:19):
Don't pull in too much attention to us.
Jason Rigby (01:22):
So this is interesting. We have Gary Gensler. He is the Head to SEC. You know, we have a new president here in the United States. So Gary Gensler was a former Chair of the Commodity Futures Trading Commission, and currently a professor teaching digital assets and blockchain. So that's interesting, digital assets and blockchain at MIT. So this guy knows a few things about blockchain.
Alexander McCaig (01:45):
Yeah, I don't know much about this guy, but what's the intention here that they want Gary Gensler to come in and I guess help manage what fraud is going on within the blockchain community? So anything that relies on some sort of encrypted ledger system, and it's dealing with a digital asset that he's going to come in and say, "Ooh, we need to look at this. We need to put more focus on this from a government regulatory standpoint."
Jason Rigby (02:15):
So what do you feel about that, I mean, whenever we're looking at fraud, hacks, manipulation, scams?
Alexander McCaig (02:23):
They realize it has potential for change. Honestly, the stock market's an effing scam, hands down. Most of the trading is done by computers. And very few people with a massive amount of resources can drive prices up or down. Any intelligent person could see that.
Jason Rigby (02:35):
High school kids can.
Alexander McCaig (02:36):
High school kids, they did it with GameStop.
Jason Rigby (02:39):
GameStop. Yep.
Alexander McCaig (02:40):
So just to explain that in this sense, let's talk about how the market can just be manipulated, right? It really lacks any good value. There was a couple of billion dollar hedge funds that had a short position, which means, to explain that if someone's not into finance, someone is saying that they're making a bet, that the value of a company is going to decrease. And in doing so they can take the differential. It's almost like taking out like a short term loan against something. And then as that price drops, they're going to get the positive gain or differential in that decrease in value. So it's like, "Oh, I have to pay back less on this, essentially." Right? And so you get a gain from it.
Alexander McCaig (03:17):
So in the simplest form, they're trying to short this thing, hoping that the price would fall. But these teenage groups of day traders were coming out and they were saying, "We got to drive the price up." So it went from $20 to $240 and wiped out all these short positions. All the funds had to then go pony up and say, "Crap. We were on the wrong side of that bet." And it was too much money for them to handle, so they lost capital expense, closed down the hedge funds.
Alexander McCaig (03:42):
So when you look at that, just the general market itself is ripe with fraudulent behavior, people cornering it lacking value, but they're taking such a hyper focus on fraud that's happening in the blockchain community. The only fraud thing you're talking about is selling someone a scam. If someone falls for a scam, they fall for a scam. But the system itself, blockchain is not a scamming system. It's designed to be decentralized. It's a trustless system. It just does it through verification and going through certain encryption algorithms.
Jason Rigby (04:16):
Yeah. And we had an episode on Ripple where we talked about them, and then also you have all these ETFs coming on the scene, I mean, I have some, where you can purchase where these funds are investing in blockchain. So I think this is just a way for the especially United States Government to kind of try to become more aware of what's going on because they realize they can't fight decentralization
Alexander McCaig (04:42):
No, they're out of the loop. And so they're trying to figure out, well, if we can't fight and it's growing so fast, how do we contain it? It's all containment management. It's classic military strategy essentially.
Jason Rigby (04:52):
Yes.
Alexander McCaig (04:53):
Risk mitigation. And it says right here, formerly Gensler was Chairman of the US Commodities Futures Trading Commission, okay, the CFTC, leading the Obama Administration's reform of the $400 trillion swaps market. 400 trillion, some ridiculous amount of value of money just being boomed back and forth and nobody can really account for what's going on, easily manipulated. He was also the Senior Advisor to the US Senator Paul Sarbanes in writing the Sarbanes Oxley Act in 2002, it was under Secretary of Treasury of Domestic Finance and Assistant Secretary of the Treasury during the Clinton Administration. He's been in politics for a long time.
Jason Rigby (05:32):
Right.
Alexander McCaig (05:33):
It's not obvious that someone was going to pull him in from MIT and be like, "Hey, you want to come lead this as the front man?" And so currently he's a member of the New York Federal FinTech Advisory Group, and was Chairman of the Maryland Financial Consumer Protection Commission. God, these words are so long. He has worked on political campaigns. He was the CFO for Hillary Clinton.
Jason Rigby (05:52):
So all Democrats.
Alexander McCaig (05:53):
Yeah.
Jason Rigby (05:55):
Yeah. So he's definitely Joe Biden [crosstalk 00:05:57].
Alexander McCaig (05:56):
Yeah. So I mean, he was a right pick, but when we're looking at this, it's like, it's that risk mitigation. And a lot of the media has sold a lot of Bitcoin news around or crypto news around fraud and hard forks and people losing all this money and it disappears and you can never get it again. Do your research.
Jason Rigby (06:18):
Mm-hmm (affirmative).
Alexander McCaig (06:20):
Somebody was stupid in how they were storing their keys. It's like, if you have a key to your house, you just hand it out to strangers? Do you store it on the sidewalk outside in front of your house? There's basic things to prevent a lot of this stuff from going on. So it's just so much fear that's been around it. And then when you hear someone's coming in to manage it and the way they coin it is... What was that sentence? [crosstalk 00:06:40].
Jason Rigby (06:39):
No pun intended.
Alexander McCaig (06:40):
Was it about fraud?
Jason Rigby (06:42):
MIT Blockchain Professor Gary Gensler, the Head at SEC, and of course he said, "Crypto markets have been ripe with scams, fraud, hacks and manipulation."
Alexander McCaig (06:50):
Ripe.
Jason Rigby (06:51):
Ripe. Yeah.
Alexander McCaig (06:51):
They've just been ripe with it. It's not right. Listen, it's flourishing with a lot of people that are transacting stuff back and forth. Are there always people out there that are going to try and game things? You can't game crypto, but you can game people. That's what's going on. So if the SEC wants to do anything, start locking down on the people that are tooling around with it, not the actual technology that is fundamentally like breaking down a lot of the walls and barriers on Wall Street.
Jason Rigby (07:17):
Yeah. This always amazes me when I start looking at Wall Street, SEC and all that stuff. I always picture like that big scandal. Now I don't know if it was in Iran or where it was at, but they were hiring people to investigate the nuclear. I think it was Iran. They were hiring people to investigate what they were doing nuclear wise.
Alexander McCaig (07:36):
Oh yeah, because they [crosstalk 00:07:37].
Jason Rigby (07:37):
But the people that they were hiring were pro Iran.
Alexander McCaig (07:40):
Yeah.
Jason Rigby (07:40):
So the SEC and Wall Street kind of reminds me of the same thing. It's like, you're taking the same... It's a fox is checking out the henhouse.
Alexander McCaig (07:49):
Yeah. You know what I mean? It's all-
Jason Rigby (07:50):
You're just getting another fox in there.
Alexander McCaig (07:52):
So when I look at that, I'm like, "Ah, whatever." It's just, who do we choose the best person for risk mitigation? We're losing grip.
Jason Rigby (07:59):
And no matter if it's Gary Gensler or the SEC or the United Kingdom, Minister of finance, whatever, maybe it doesn't matter, the power belongs to the people. Decentralization is the future. And these old cigar-smoking dudes don't know what to do about it.
Alexander McCaig (08:17):
Yeah. See you later, guys.
Speaker 1 (08:26):
Thank you for listening to TARTLE Cast with your hosts, Alexander McCaig and Jason Rigby, where humanity steps into the future and source data defines the path. What's your data worth?
