TradFi Is Taking Over Crypto!? What You NEED To Know!!

Recently cardano founder Charles Hoskinson published a video arguing that The traditional Financial system is Starting to take over the crypto Industry and he's absolutely right now Crypto's implicit purpose is to replace The traditional Financial system but if It continues heading in its current Direction it could end up becoming even More dystopian than any Central Bank Digital currency that's why today we're Going to summarize what Charles said in His recent video provide some context For his claims and tell you how crypto Can protect itself from trafi Capture I'll start by saying that Nothing in this video is financial Advice it's purely educational content That's meant to assist you on your Crypto Quest I'll also note that a few Members of the coin Bureau team hold Cardano's Ada as part of their crypto Portfolios and we're making this video Purely because it's an important topic If you happen to be interested in seeing Which other cryptos we hold as well as Which ones we're watching then you can Join the coin Bureau Club besides our Portfolios and watch lists members get Weekly reviews of small cap altcoins That they vote for daily crypto Market Updates and exclusive crypto deals the Link will be down in the Description okay that said the video

We'll be summarizing today is titled Quote Legacy is eating crypto it was Published by Charles earlier this month On his YouTube channel and we'll leave a Link to the video in the description it Is well worth a watch if you have the Time even if you're not a fan of cardano Now Charles began the video by Explaining that he's been discussing the Importance of decentralized algorithmic Stable coins in recent interviews that He's done he's also been underscoring The threats that centralized Asset-backed stable coins could pose to The crypto industry This requires a bit of clarification an Algorithmic stable coin is a crypto that Maintains its Peg to a fiat currency Using well an algorithm of some kind the Most infamous example of an algorithmic Stable coin is terra's us which Collapsed in the spring of 2022 this though is actually not the Kind of algorithmic stable coin Charles Was referring to rather he was referring To a stable coin which is backed by Another cryptocurrency such as make a Dow's die which can be minted by locking Up another crypto as collateral namely Eth the catch is that D is arguably not Decentralized as it has since become Mostly backed by centralized assets this Makes D not that much different from Other centralized stable coins like

Circle usdc and tether's usdt which Charles classifies as being being asset Backed that's simply because these Stable coins are backed by real world Assets namely US Government debt and US Dollars assets that can be easily seized To put things into perspective Charles Provided a couple of Statistics the First is that centralized stable coins Make up around 10% of crypto's total Market cap now this doesn't sound like Much until you realize the second Statistic around 70% of all crypto Transaction volume involves a Centralized stable coin naturally Charles underscored the fact that Centralized stable coins like usdc and Usdt are minted and Redeemed by Centralized companies that are often Subject to strict regulations he Clarified that these regulations aren't Necessarily bad but mean that these Entities are subject to government Control crypto isn't more importantly it Means that these entities can't push Stable coin Innovation too far as it Would run a foul of Regulations these entities also can't Issue stable coins in a fractionalized Way in plain English all of the stable Coins in circulation must be backed one To one by an equivalent value of US Dollars or bonds now this is a big Problem because it means that

Centralized stable coin issuers could Theoretically decide which chain becomes The dominant chain in the event of a Hard Fork put differently they would Have to choose which chain to migrate All of their stable coins too as they Can't just double the supply now believe It or not but this is something that was Admitted by ethereum Creator vitalic Buaran in 2022 he said that usdc issuer Circle could decide which chain wins if Ethereum was to Fork notably cardano Does not face this risk as it doesn't Currently have any centralized stable Coins more on that in a second and by The way if you're enjoying the video so Far feel free to smash that like button To give it a boost subscribe to the Channel and ping that notification Bell So you don't miss the next One are you ready for Deals are you ready for trading fee Discounts are you ready to save some Money if the answer is yes then you're Ready for the coin Bureau deals Page yes coin buau brings you the very Best deals and promotions in all of Crypto you won't find offers like these Anywhere Else discounts on the best hardware Wallets trading fee discounts of up to 60% coin bureau's brand new altcoin Focus Subscription Service the coin Bureau deals page is even better for you

Than the this piece of succulent protein Rich nutritious grilled Chicken head on over to coin.com Deals or click the link in the Description below don't delay check out The coin Bureau deals page today these Deals are so hot I need to cool Down Yeah now after highlighting the fact That centralized stable coin issuers Could use their powers to require kyc at The blockchain level Charles pulled up a Series of comments criticizing the fact That cardano doesn't have any Centralized stable coins on its Blockchain something we also pointed out In our recent cardano review Charles Stressed that those who are blindly Pushing for centralized stable coins on Cardano are not thinking about the Potential risks they could bring all They care about is seeing adah's price Go up and Charles used the response to The spot Bitcoin ETFs as another example Of this thinking he noted that the spot Bitcoin ETFs now hold over2 200,000 BTC Worth more than $10 billion and argued That the asset managers operating these ETFs now have as much power over Bitcoin As Circle does over select smart Contract Cryptocurrencies this is both Interesting and debatable it's Interesting because it's evidence that

Our prediction about Circle becoming one Of the most powerful companies in crypto Is coming true more about that in the Description it's also debatable because Controlling Bitcoin requires a lot more Than controlling btc's price however Charles argued that if if the spot Bitcoin ETFs continue to swallow up Btc's Supply they could grow to the Point that they could take control of Bitcoin in the event of a fork for Reference Black Rock explicitly stated In its ETF filing that it would decide Which Bitcoin Fork to support if a fork Occurred so imagine a scenario where Bitcoin Forks into a proof of stake Chain and proof of work chain black Croc And the other asset managers would Almost certainly opt to support the Proof of stake Fork as their large BTC Holdings would give them de facto Control of this new Bitcoin blockchain Via their spot ETFs I'll quickly note That these ESG obsessed asset managers Are concerned about the governance that Is control aspect of Bitcoin not its Environmental aspect whereas proof of Stake is lorded for its environmental Friendliness it's the control aspect That really matters more about that in The description now at the same time Black Rock and these other asset Managers could sell the proof of work BTC they hold after the fork causing its

Price to plummet to the point that it's Unprofitable for every Bitcoin miner to Mine the Practical effect of this would Likely be the destruction of the proof Of work chain Charles then went on to Remind everyone that it's not just Stable coin issuers and asset managers That could take over the crypto industry It's also the centralized exchanges Where the top three control most of the Trading volume by Charles's estimation There are just 10 entities that can Control the crypto Market but if you Think about it it's actually probably Fewer because Black Rock has a Partnership with coinbase and manages Usdc reserves black rock also has Significant influence within the US Government which recently settled a Lawsuit with binance that essentially Gives it complete oversight of the Exchange in any case Charles then said Something fascinating and that was if You don't listen to what these entities Say they won't list your coin and they Won't launch a stable coin on its Blockchain this makes us wonder whether This is in fact why cardano doesn't have A centralized stable coin it refuses to Comply case in Point Charles then said That cardano is one of the few cryptos That's managed to evade capture by Centralized stable coin issuers and Their allies he said the result of this

Is that cardano has been mostly ignored And there's no denying that there's been A bias against it from certain entities In the industry Charles reiterated that Many in the cardano community are Growing impatient with adah's price Action and are quote trying to invite The vampires in so so that adah's price Will pump Charles said that it's not for Him to decide but they need to be aware Of what they're in for hence why he made The video he repeated that if these Vampires are let in they will eventually Be able to control everything about Cardano in the same breath though he Implied that adaah could be delisted if It's deemed not worthy by the trafi Backed crypto Elites suggesting that There may not be a middle ground here Regardless Charles emphasized that everything in Crypto comes with a trade-off nothing is Free he asked whether the purpose of Crypto is to perpetuate the inequality We see today or to stop it he also asked If crypto's purpose was to align with The entities who created this inequality Or to get away from them to drive the Point home he then said that every Increase in centralization in crypto Makes it more like the corrupt Financial System it's trying trying to combat this Includes centralized infrastructure Centralized exchanges and centralized

Stable coins eventually there will be Wallet wide kyc and cbdc Integrations I'll quickly note here that Circle CEO Jeremy aair tacitly admitted in an Interview with bankless that the endgame Of circles usdc is to become a cbdc if You've watched any of our videos about Cbdcs you'll know that they will give The governments and central banks total Control over how you save and spend some Would say that stablecoin issuers are Exercising these Powers already but hey Let's not go there now the outcome of This trend towards centralization will Be the same kind of permissioned systems And deplatforming we're seeing in the Financial system today look no further Than the pandemic protests in Canada for Evidence of that protesters and their Supporters had their bank accounts Frozen Charles concluded by saying that Crypto will mean nothing if it Integrates with trafi and that they will Do everything in their power to ensure That it does be it influencing Regulations or otherwise if you've been Keeping up with our coverage of crypto Regulations you'll know trafi Integration is their goal and finally Charles recounted how the reason why Satoshi Nakamoto created bit coin was Because of the unprecedented actions Taken during the 2008 financial crisis And the Precedence that they said

Satoshi's core belief was that crypto Could be different but first we need to Acknowledge where it's staying the same Unfortunately Charles didn't expand on How exactly crypto could be changed to Protect itself from creeping trafi Control be it with algorithmic stable Coins or otherwise fortunately it's Pretty straightforward but it's going to Be much easier said than done and will Come with trade-offs as Charles said This ultimately depends on your Perspective allow me to explain let's go Back to the premise of Charles's video Which is that Legacy AKA trfi is eating AKA integrating crypto and not the other Way around many would argue that some Degree of integration is necessary to Increase crypto awareness adoption and Development crypto privacy regulations Are a great example right now crypto Regulations around the world are Incredibly hostile to privacy in theory That's because crypto privacy paves the Way for illicit Financial activity in Practice though it's because powerful Financial entities want to see Everything so they can control the Economy and suppress their Competition the thing is that it's these Powerful Financial entities who want Privacy more than anyone else that's why Black rock and the other spot Bitcoin ETF issuers didn't disclose which

Wallets hold the BTC backing their ETFs And why bitwise bit the bullet by Disclosing this information before Onchain sleuths founded now take a Second to ponder that stablecoin Payments are likely to become common Around the world because of lobbying Efforts by stable coin issuers like Circle it won't take long for the Average person to realize that everyone Can see their stable coin transactions And balances and they won't like that One bit throw in the fact that central Banks will be allowed to start holding Crypto on their balance sheets in January 2025 and you have a recipe for Immense regulatory pressure around Increasing crypto privacy this will Increase the adoption of crypto privacy And spur the development of more privacy Solutions you see the cool thing about Crypto is that it's Universal the same Rules apply to everyone who uses the Blockchain so long as that continues to Be the case then we will likely see a Scenario where powerful individuals and Institutions start to push for crypto Values because doing so is in their own Interests if you're not convinced Consider the following central banks Around the world are currently in the Process of developing their own digital Currencies do you think that these Central banks will trust each other's

Digital currencies when it becomes easy To seize or freeze these assets at the Click of a button well the answer is no There will be massive demand for a Credibly neutral digital currency of Some kind particularly as we enter a More geopolitically fragmented world now From our perspective bitcoin's BTC is Perfectly positioned to play this role And it's reportedly being used for trade By some countries already not only that But some countries are reportedly mining BTC themselves this has the potential to Create a scenario where countries who Use BTC for trade start to compete in Mining to ensure that the Bitcoin Blockchain remains neutral Fidelity Another asset manager actually predicted Something along these lines and this This ties into Charles's claims about Asset managers being able to control Bitcoin by controlling btc's value when You understand that btc's biggest value Proposition is that it's a credibly Neutral digital currency that nobody can Control you understand that controlling Bitcoin would backfire in other words if Black Rock and the other asset managers Were to take control of Bitcoin then its Primary selling point would Simultaneously disappear the consequence Of this would likely be large outflows Into other assets that asset managers Can't control such as gold and even

Other cryptos come to think of it those Outflows could even flow into the proof Of work BTC Fork now it's also easy to Forget black Rock's enormous wealth and Influence fundamentally rests on the Supremacy of the US and the US dollar if You watched our video about the bricks Countries you'll know it is possible That we're entering a new commodity Cycle that could increase the power of The Bricks now imagine a scenario where One of the bricks countries launches a Spot Bitcoin ETF for the proof of work BTC from black Rock's proof of stake Fork and gets tens of billions of Dollars of inflows I'm not saying that This will happen I'm just saying that You need to zoom out and see the bigger Picture in front of us but of course This is all long-term stuff and it also Doesn't account for the rest of the Crypto Market in the shorter term it Looks like the rest of crypto could Become integrated with trafi in a very Uncomfortable way this was actually Predicted by small blockers during the Blocksize wars if you watched our video About the block size Wars you'll know That trafi investors once tried to take Control of Bitcoin by increasing its Block size they failed and subsequently Turned their focus to other Cryptocurrencies namely ethereum since That time it's played out like the small

Blockers predicted basically if the goal Of crypto is to compete with the Traditional Financial system in terms of Things like speed and cost then it will Be a race to the bottom in terms of Centralization this is exactly what We've seen over the last decade every Next Generation crypto has been more Centralized than the previous one not Surprisingly the result is that these Cryptos have become vulnerable to Regulatory capture as with black rock Potentially controlling Bitcoin Centralized cryptos becoming subject to Trfi regulations will eventually make Them no different from existing trafi Solutions and nobody will use them this Is something that the investors in these Crypto projects are presumably aware of Hence why they've been suddenly pivoting To become as decentralized as possible If you watched our video about Decentralization though you'll know that It's a lot more than just the number of Nodes and validators it's also the Number of developers working on the Blockchain the distribution of the coin Or token especially for proof of stake Blockchains and even the infrastructure Being used by the miners and validators Obviously the tradeoffs of being Decentralized on all metrics are slower Speeds and higher costs and this brings Us back to the underlying issue and

That's that most of crypto is trying to Compete with trafi in terms of cost and Speed this has created a race to the Bottom for centralization and if it Continues someday the most adopted Crypto will be run on a single server at The Federal Reserve now perhaps we're Mistaken but that is not what crypto was Supposed to be so then what's the Solution well in short it's to let the Crypto industry learn the important of Decentralization the hard way as with Most things in modern society the only Way you're going to get change is with Some kind of shock in this case it could Be Circle deciding which salana Fork Wins in the future it could be teor Freezing everyone's usdt Holdings until They complete kyc it could be coinbase Banning crypto transfers to and from Personal wallets like many Regulators Want to do it could be black Rock's spot Ethereum ETF taking control of ethereum With all the eth it will inevitably hold Now it's only once these sorts of things Start to happen that the average crypto Investor and user will understand the Importance of decentralization as I Mentioned earlier this is something many Powerful individuals and institutions Will start to understand too and in the End new more decentralized cryptos will Emerge with a bit of luck though it Won't have to come to that the crypto

Industry will see these threats coming From a mile away and adjust accordingly And there do seem to be some early signs Of this with new decentralized Infrastructure privacy protocols and Even algorithmic stable coins getting VC Funding this is surprising at first Glance but upon closer inspection it Makes sense because at the end of the Day what entities like Black Rock Coinbase and circle all want to do is Make money like most people in crypto Investing in Innovation tends to be Profitable hence why they've been Pushing for pro crypto Regulations now believe it or not but it Appears that it's the governments Mega Banks and central banks that have been Holding crypto down after all they face The most competition from crypto Innovation so it might sound crazy but Black crck and Co might actually be on Our side in this battle though we Certainly wouldn't trust them seriously Ask yourself what could be more Profitable than replacing the Governments the mega Banks and the Central banks Food For Thought okay that is all for today's Video folks so if you learn something New let us know by Smashing that like Button if you want to keep learning be Sure to subscribe to the channel and and Ping that notification Bell if you want

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