The
following
is
a
guest
post
by
Ben
Mills,
Co-Founder
at
Meso.
The
U.S.
Securities
and
Exchange
Commission
blessed
Ether
and
Bitcoin
ETFs,
and
the
U.S.
House
passed
FIT-21
with
bipartisan
support.
The
perception
is
that
those
are
the
next
steps
in
the
ongoing
experiment
to
see
whether
regulation
can
reduce
the
risks
inherent
in
crypto
and
tame
the
wild
digital
assets
sector.
But
what
if
I
told
you
that,
by
nature,
crypto
has
the
potential
to
be
far
safer
than
the
existing
financial
system?
The
salient
concept
here
is
“custody,”
or
more
specifically,
“self-custody”
–
the
ability
for
people
to
maintain
control
over
their
own
assets
and
data
during
financial
transactions,
without
intermediation
from
third
parties
like
banks,
exchanges,
or
web
companies,
Let’s
be
honest.
The
majority
of
people
who
pay
passing
attention
to
crypto
most
likely
have
their
opinions
shaped
by
news
headlines
about
catastrophes
like
the
collapse
of
Sam
Bankman-Fried’s
FTX
or
the
conviction
of
Binance
CEO
Changpeng
Zhao
on
money
laundering
charges.
However,
those
scandals
had
much
more
to
do
with
human
nature
than
the
nature
of
crypto.
Looking
back
to
the
2019-2020
bull
market
for
crypto,
developers
were
attempting
to
build
sophisticated
crypto-powered
applications
that
were
simple
for
neophyte
traders
and
investors.
In
too
many
cases,
simplicity
was
achieved
by
sacrificing
self-custody
and
trusting
the
responsible
stewardship
of
massive
Centralized
Exchanges
like
FTX.
Consumers
were
peddled
a
combination
of
the
worst
risks
of
Web2
fintech
and
the
unsolved
problems
of
Web3.
This
shortcut-taking
led
to
disaster
for
the
companies,
their
investors
and
their
customers.
But
we
don’t
need
to
hearken
back
to
Lehman
Brothers
to
show
that
crypto
has
no
monopoly
on
spectacular
financial
failures.
Consider,
for
example,
the
ongoing
case
of
Synapse
Financial
Technologies,
a
non-crypto
company
whose
platform
is
an
intermediary
allowing
financial
technology
companies
to
provide
bank-like
services
(such
as
checking
accounts,
credit
cards
and
debit
cards).
The
issues
of
trust
and
custody
are
at
the
heart
of
the
implosion
of
the
banking-as-a-service
pioneer
that
was
once
touted
as
the
leading
edge
of
fintech
and
is
now
teetering
between
bankruptcy
and
liquidation.
U.S.
Bankruptcy
Court
Judge
Martin
R.
Brash
said
“tens
of
millions”
of
individual
“depositors”
are
on
the
hook
for
losses
amounting
to
“potentially
hundreds
of
millions
of
dollars,”
according
to
a
report
from
Forbes.
Speaking
as
a
developer
and
former
products
expert
for
companies
such
as
Braintree,
Venmo
and
Paypal,
who
has
since
seen
the
light
on
blockchain
payments,
I
can
tell
you
that
the
real
strength
of
crypto,
compared
to
traditional
fintech,
is
it
enables
developers
to
build
in
a
much
faster
and
leaner
way.
That’s
because
the
underlying
blockchain
technology
already
accounts
for
fintech
bugbears
such
as
data
security,
payment
integrations
and
–
as
mentioned
above
–
custody
of
funds.
The
new
generation
of
crypto-powered
apps
has
the
advantage
of
new
technology
that
abstracts
complex
details
in
favor
of
user-friendly
interfaces.
At
the
same
time,
it
preserves
self-custody,
so
it
doesn’t
run
the
same
risk
that
centralized
entities
posed
during
the
last
cycle.
In
other
words,
while
public
attention
has
been
fixated
on
extinguishing
the
fires
lit
during
2019-2020,
crypto
infrastructure
has
matured
to
the
point
where
we
can
get
the
best
of
both
worlds:
A
friendly
Web2
user
experience
with
apps
built
by
developers
who
don’t
have
to
worry
about
taking
custody
of
user
data
or
funds,
making
it
safer
for
every
participant.
That’s
what
gets
developers
and
crypto
entrepreneurs
excited
about
digital
assets.
Crypto
is
becoming
safer,
faster,
and
easier
–
ultimately
refining
itself
out
of
the
average
users’
experience.
This
intentional
invisibility
is
a
key
goal
at
the
end
of
crypto’s
journey
to
becoming
a
significant
component
of
the
mainstream
financial
system
and
people’s
everyday
lives.
Go to Source
Author: Ben Mills
