FTX chief cites the main problems facing the cryptocurrency industry

Despite rapid development, the digital asset industry faces a number of problems before it becomes mainstream. Among the main challenges are scalability and regulation, said the head of the bitcoin exchange FTX, Sam Bankman-Fried.

1) I’ve written a bunch about FTX’s roadmap.

But I haven’t written much about crypto’s.

So, here goes. pic.twitter.com/hSIhbFW8zh

— SBF (@SBF_FTX) December 27, 2021

According to him, there are about 200 million cryptocurrency users worldwide. The rise in their numbers has been driven by new use cases for digital assets, the launch layer-2 scaling solutions, as well as the hype surrounding the sector.

For truly mass adoption, cryptocurrencies lack clear regulation and scalable technology.

The billionaire noted ‘tension’ between industry players and regulators.

8) Well, let’s start with the obvious: regulation.

There has been a lot of tension between industry and regulators, and both sides have, in many cases, left feeling frustrated.

— SBF (@SBF_FTX) December 27, 2021

“On the one hand, in many jurisdictions questions regarding token and stablecoin issuance processes, as well as platform registration, remain unclear. This hinders the safe development of the industry and deters institutional players. On the other hand, for many regulators it is difficult to work with crypto companies — instead of cooperation we are seeing examples of confrontation,” he wrote.

In his view, industry participants need to work with authorities to close the regulatory gaps. He noted that the easiest way to address the issue is with stablecoins — simply create a reporting and auditing regime to guarantee their backing.

Bankman-Fried added that a unified industry oversight program and disclosure and anti-fraud regimes are needed.

The billionaire stressed that another hurdle to mass adoption is the network effect. The industry needs more merchants supporting cryptocurrencies.

He also noted that this applies to all segments, including social networks, GameFi and NFTs. He believes the latter could attract billions of users from the video gaming industry.

20) Tapping into the existing userbase of video games could be huge—billions of users and hundreds of billions of dollars each year.

But this only makes sense if it makes the virtual worlds more engaging, not less.

— SBF (@SBF_FTX) December 27, 2021

“Using the existing base of the gaming industry could be hugely profitable — billions of users and hundreds of billions of dollars a year. But it only makes sense if virtual worlds become more engaging, not less. The real goal here is to take a great game and integrate NFTs to make it even better,” wrote Bankman-Fried.

The FTX chief noted that developers have not yet sufficiently increased blockchain throughput. In his view, the average stands at about 50,000 transactions per second, which is too slow.

21) The real goal, here, is to take a great game, and integrate NFTs in a way that makes the game better.

And, meanwhile, networks need to keep scaling.

I always laugh when a blockchain says they’re already fast. None are!

Fast means millions of TPS. No one is there yet.

— SBF (@SBF_FTX/status/1475567151251656719?ref_src=twsrc%5Etfw”>December 27, 2021

“I always laugh when industry players say their products are already fast. That’s not the case. Speed means millions of transactions per second. No one has reached that yet,” he said.

In December, FTX unveiled cryptocurrency industry regulation proposals.

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