U.S. Congress is Bullish about Cryptocurrencies and Blockchain

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U.S. Congress is Bullish about Cryptocurrencies and Blockchain

(Photo Illustration by Thomas Trutschel/Photothek via Getty Images)

Written by Dr.Leon Tressell, co-authorted by Rosa Tressell exclusively for SouthFront

In early March the United States Congress issued its annual Joint Economic Report. This annual report is designed to help various Congressional committees and their members as they deal with economics issues. The report included for the first time, a chapter on cryptocurrency that was rather bullish in tone. It should give everyone looking at the future of the global economic system pause for thought.

Every year a joint committee of Congress, made up of 10 Senators and 10 members of the House of Representatives, produces a  very detailed economic report. This year they took the unprecedented step of including a 27 page chapter on cryptocurrencies entitled,’Building a Secure Future, One Blockchain  at a Time’.

Quick Summary of  the 2018 Economic Report of Congress

  • Cryptocurrencies and blockchain provide,”technology that could revolutionize the world’s digital landscape and economy.”
  • It takes a positive view of ICO’s stating that they offer a cheaper and more efficient alternative to IPO’s.
  • The Report regards cryptocurrencies as commodities but concedes they have the potential to become money once they deal with issues such as scalability, ease of use and price stability.
  • Cryptocurrencies and blockchain are a ”truly revolutionary” and offer huge benefits to U.S. society from storing medical records to securing critical financial and energy infrastructure.
  • It recommends that members of Congress and the public should educate themselves about crypto and blockchain as they have a,”wide range of uses in the future.”
  • Government agencies should examine the possible applications of this technology to make government more efficient at delivering its various services.

For a more detailed analysis of the report see below

The introduction to the report notes that America faces potentially huge costs from dealing with the threat of cyber attacks upon its economy and critical infrastructure. Straight way in the first paragraph it comments,”The

Report suggests blockchain as a potential tool for securing

America’s digital infrastructure.”

It goes on to observe that cryptocurrencies and blockchain pose unique challenges to regulators and Congress yet they provide,”technology that could revolutionize the world’s digital landscape and economy.”

The introduction recognises the emergence of cryptocurrencies in 2017 as one of the most significant economic events of the year. The following charts from the Report help illustrate this.

The introduction compares the emergence of cryptocurrencies into the mainstream in 2017 with that of internet companies in the 1990s:

”The buzz surrounding digital currencies resembles the internet excitement in the late 1990s when people recognized technology companies could change the world. Many internet companies launched and their valuations took off in short order. Many failed, but a few succeeded spectacularly and challenged the conventional ways of doing business.”

The Report spends some time explaining what cryptocurrencies/blockchains are and then discusses their growing pains over the last few years. It then moves on to look at various regulatory issues regarding the crypto space.

Regulatory Issues

In the section on regulatory issues the Report advocates a cautious approach. The members of Congress who drew up the report are keen to to avoid,”overly prescriptive regulations that constrain this emerging technology from reaching its full potential.”

It will come as a surprise to many that the report takes a rather favourable view of ICO’s. The Report notes the explosive growth of this new way of raising capital for projects using this new technology.

The Report points out that ICO’s are a much more efficient way of building a new economic system as they are much less expensive than an Initial Public Offering. Apparently, PriceWaterhouseCooper has estimated that the average IPO costs companies up to 7% of the capital raised and costs over $4 million in accountancy costs.

On top of this, companies have to spend between $1-2 million annually to maintain their status as a publicly listed entity. In contrast, the average ICO cost around $60,000 and return a hefty profit to initial investors. The reports notes that ICO’s raised $5.3 billion during 2017 for companies that offered a wide variety of ideas and projects. It takes a rather upbeat view of these new companies launched by the ICO boom of 2017:

”Many of these projects will likely fail, as most start-ups do, but the ones  that do survive could transform the way the internet and technology works for decades to come.”

Are cryptocurrencies money?

Not surprisingly, the report dismisses the idea that cryptocurrencies are money. After all, only central banks are allowed to print currencies which is a key source of their power. It cites scalability issues and extreme price volatility as key barriers to crypto being accepted as a legitimate form of currency.

Having said this, the Report does concede that:

”If digital currencies become less volatile in the future, valuing items in those denominations could become easier and individuals might begin using them more frequently as a medium of exchange.”

Future of Cryptocurrencies

The report offers several  rather interesting insights into the future of cryptocurrencies. The volatility in the prices of different cryptos does not stem from the variability of their supply, for example in Venezuela government  money printing has led to hyperinflation, rather from public demand for them. If cryptocurrencies are to maintain their value then they must offer benefits such as ease of use, accessibility, privacy, security, scalability and low transactions costs relative to fiat currency and other stores of value such as gold.

This section of the  Report concludes by observing that:

”cryptocurrencies resemble real assets or commodities more than currencies, though their future role could expand to include functioning as mediums of exchange.”

Innovations

The most interesting section of the Congressional Economics Report comes in that section dealing with crypto/blockchain innovations. It starts off by recognising that media FUD over crypto has scared many people away from realising the benefits of crypto applications beyond the financial sphere. Cryptocurrencies offer a decentralized, secure and efficient way to store any kind of date across multiple platforms.

The example is given of how several health companies together with the Department of Health are researching blockchains as an efficient way of storing medical records. It describes how cryptocurrencies are making a very valuable contribution to the healthcare system:

”The new products range from coordinating payment (healthnexus),430 monitoring and rewarding patients for following clinical recommendations (RoboMed Network),431 tracking pharmaceuticals along the supply chain (MediLedger),432 and even identifying specific supply chain problems such as those associated with the opioid crisis (BlockMedx).”

The Report waxes lyrical about the, ”truly revolutionary potential” of blockchain technology from managing supply chains and the electrical grid to tracking/verifying products in the global shipping industry.

Conclusion and Recommendations to Congress

In the overall conclusion, to the chapter on crypto and blockchain the report notes that they offer huge potential benefits from securely storing medical records to securing critical financial and energy infrastructure. The Report makes a number of positive recommendations to Congress.

These recommendations make it clear that the most powerful country on the planet is not seeking to destroy the crypto ecosystem. Forget the ill-informed fear, uncertainty and doubt from the mainstream media and ignorant politicians.

Do not forget that decisions taken by the U.S. Congress often have global significance and implications for governments and ordinary people everywhere. Love them or hate them cryptocurrencies are here to stay. They will come to play an increasingly important part of the global econom system.

The key recommendations are quoted in full below:

”Policymakers and the public should become more familiar with digital currencies and other uses of blockchain technology, which have a wide range of applications in the future.”

”Policymakers, regulators, and entrepreneurs should continue to work together to ensure developers can deploy these new blockchain technologies quickly and in a manner that protects Americans from fraud, theft, and abuse, while ensuring compliance with relevant regulations.”

”Government agencies at all levels should consider and examine new uses for this technology that could make the government more efficient in performing its functions.”

Sources:

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  • Gregory Gregory

    Of course they are – the NSA devised it

    • so

      They control the scam and we are the ones who pay. Bail outs for the rich and no affordable health care for you.

    • David Parker

      How does the NSA profit from blockchain?

      • Bobby Twoshoes

        How does knowing what everyone is spending their money on benefit an intelligence service? Really?

        • hamster

          Yeah, REALLY. Your argument is fucking retarded. How would the NSA profit from blockchain?

          • Bobby Twoshoes

            I guess it’s just going to have to be one of those mysteries for the ages, like why do unintelligent people call other people retarded when they can’t understand something? Or why do children upvote their own comments when it makes them look like sad, pathetic losers?

          • hamster

            I wouldn’t know the answer to that question, as it bears no relevance to me of course. You see in my case, when I call someone a retard, I call it as I see it. That’s not a sign of a lack of intelligence, that just a result of making an empirical observation. But of course, you’d use any excuse to get your panties in a bunch and whine about how “hurt” your feelings are over the internet, only to avoid discussing or elaborating on an issue where your blithering dumbass idea based on some hunch or hearsay.

            “I heard it was some seed fund by the CIA”. Yeah… REALLY good fucking research there buddy. You “heard” something from somebody somewhere. Thanks for letting us know.

            I heard people like you are pathetic low lives who don’t have a job and see Illuminati boogeymen around every fucking corner because your mother was a shot up heroin addicted piece of shit who reared your ass in while she was passing out in the back of a Motel 6 bathroom. God forbid anyone questions what I “heard” about your dumbass, they clearly “can’t understand” the shit I’ve figured out about your life, amirite?

            Take a fucking hike retard.

          • Bobby Twoshoes

            No you’re not “rite” but no surprises there. Why didn’t you vote that comment up? You clearly took much more effort coming up with this string of vacuous insults and you even used some big words to illustrate how “smart” you are :)

          • hamster

            Very good job.

    • hamster

      The NSA did not devise cryptos. God you’re a fucking retard.

      • Gregory Gregory

        Far from being a reeetard – I assume you’re a Yank – I’m considerably brighter than you. Now go and shove another hamster up your fat Yank asshole.

        • hamster

          No you most certainly are a retard. Completely unable to substantiate an unsubstantiated claim, and completely unable to answer basic queries. The only thing you are capable of is typing in all caps (REALLY?!) and blurting out random unsubstantiated claims.

          Fucking guaranteed that I am far more intelligent than by virtually every measure that matters, and I absolutely guaran fucking tee you, that you are going to continue to dodge the question and will absolutely fail to substantiate your retarded flippant speculation.

          Your “assumptions” are incorrect, not that it matters. You’re just a fucking retard either way. You were born a retard and you will die a retard.

          Go ahead bitch, substantiate. “NSA devised cryptos”. Oh right, you can’t. You’d rather dwell on the fact that I insulted you (you deserve it of course, I’m just making an observation). That’s right fuckface, think before your blurt out random shit “hypotheses” that have no bearing in empirical reality.

          Now go jack off in a corner and cry yourself to sleep, you miserable lonely piece of shit.

          • Gregory Gregory

            Simmer down, fatboy.

            Most people on the thread agree with me and I have “empirical” evidence – I counted the upvotes.

            I’m sorry but I had to discount the one you gave yourself.

          • hamster

            Nice “empirical evidence”. Blurt out retarded shit, get some upvotes and that makes your bullshit claim any more credible how exactly? Oh right, it doesn’t. It just shows that besides you, there’s more than one retard on this issue.

            Sorry, that’s not really surprising. Everyone in the world knows that retards are quite numerous and tend to congregate in droves. Still makes you a fucking retard.

          • Gregory Gregory

            Fatboy thought he was sticking it to the man with his bitcoin and he was just beta testing it for the The Company. Typical Millennial.

    • Bobby Twoshoes

      I heard it was the CIA seed fund, whoever fronted the seed money, this whole thing screams Ponzi scheme to me.

    • You can call me Al

      I thought it was the CIA for Bitcoin, but for all the other ones, I think they may be independent or by other governments….whatever, what matters is the continuous gains in computer money as opposed to paper monies, which I am no backer of.

      • Gregory Gregory

        I’ve heard a case made for either or both being behind it – but, as you say, the ultimate goal is a cashless society where every transaction is logged. If they achieve it, that’s when gold will start to find its true value.

  • Smith Ricky

    if you cant beat it, join it.

    • Merijn

      If you can’t beat it….Die tryin’

      • Smith Ricky

        I wish they had your mentality.