- Vitalik Butern says crypto must mature to be in sync with regulatory policies.
- He suggested the use of zero-knowledge proofs to satisfy regulatory needs.
- Buterin has also touted Bitcoin as a better option than gold.
Ethereum co-founder Vitalik Buterin says the cryptocurrency industry should focus on maturing before pursuing institutional money. According to Buterin, the crypto ecosystem has to develop into something that’s in sync with regulatory policies that provide crypto projects the freedom to function internally as intended.
While discussing the regulations that impede the smooth functioning of cryptocurrency ecosystems, Buterin stated that he favors the implementation of policies that enable inner independence for cryptocurrency projects, even if this slows down widespread adoption.
He added that he was “kinda happy” that several exchange-traded funds (ETFs) were being delayed by regulators, adding that “The ecosystem needs time to mature before” it comes to the limelight.
The co-creator of Ethereum also shared his thoughts on the adoption of know-your-customer standards, highlighting how this is a cause for concern in the realm of decentralized finance (DeFi) frontends in particular. On the other hand, he stressed the need to know your customer policies on cryptocurrency exchanges, which have been adopted on a large scale.
“It (KYC on DeFi frontends) would annoy users but do nothing against hackers. Hackers write custom code to interact with contracts already,” Vitalik wrote.
He went on to present a few recommendations of his own, suggesting limits on leverage trading, more transparency regarding contract code audits, and lastly, “usage gated by knowledge-based tests instead of plutocratic net-worth minimum rules.”
To wrap up, Buterin suggested employing zero-knowledge proofs to satisfy regulatory needs while protecting users’ privacy, saying, he would love to see regulations drafted in such a manner “that requirements can be satisfied by zero-knowledge proofs as much as possible.”
In addition to sharing his thoughts on cryptocurrency regulation, Buterin has also made it clear that he thinks Bitcoin is a superior investment to gold in response to American cartoonist Zach Weinersmith, who stated the only argument for crypto he’s heard is that believers don’t want centralized money.
Buterin followed by slamming gold as a decentralized currency alternative, describing it as “incredibly inconvenient” and “difficult to use, particularly when transacting with untrusted parties.”
Gold is incredibly inconvenient. It's difficult to use, particularly when transacting with untrusted parties. It doesn't support safe storage options like multisig. At this point, gold has less adoption than crypto, so crypto is the better bet.— vitalik.eth (@VitalikButerin) October 26, 2022