Global crypto adoption seems to be becoming an increasingly plausible scenario. A situation that arouses ESMA’s distrust.
Crypto Adoption: A Danger To The Population?
Despite the crypto winter that plagued the summer, industry players still dream of mainstream adoption. While El Salvador has made Bitcoin its national currency, initiatives are multiplying around the world. It is now possible to pay for some of your purchases with digital currencies, and some territories have even allowed taxes to be paid this way.
However, according to the European Securities and Markets Authority (ESMA), the generalization of cryptocurrencies would be far from good news. In a study published yesterday, the organization expressed its concerns and raised several dangers that this situation could bring to the population. Beyond instability and speculation, population manipulation appears to be the biggest concern. This will manifest itself through the incentive to purchase. In the case of crypto adoption, aggressive marketing campaigns will be numerous and drive less educated people to invest. In other words, crypto scams will thrive thanks to greater visibility.
A second type of manipulation would also be price inflation, which would cause a wave of buying and then disappointment. A situation already known to the industry at a time when Terra Classic (LUNC) will be accused of being subject to it. As for community votes that can be easily changed by large holders, they are also well known to the Terra project and have a direct impact on individuals.
The last possibility for manipulation: the presence of whales, which would destroy the value of the pieces thanks to purchases and then resales on a large scale. Just like with price inflation, a sudden rise in some tokens would spur investment, especially if the buyers turned out to be the creators of those tokens.
The network can also be manipulated
According to ESMA, blockchain technology, and in particular that related to DeFi, would still be too vulnerable to attacks. An outsider can come in and break the consensus mechanisms and therefore transform the rules by which transactions are maintained. In this way, the monetary authority takes a cue from the attack on the Ronin network, during which the nodes necessary for consensus were mastered. With widespread adoption and network congestion, they can get out of sync.
Consensus risks are compounded by network congestion, which has disrupted the services of several major blockchains in recent months. […] Traffic spikes can cause consensus nodes to become out of sync. Sometimes outages are intentionally caused by a malicious node in the network or by an external actor.
Excerpt from ESMA survey
Still weakened by the crypto winter, the industry seems to have an interest in strengthening its technology if it wants to regain the trust of consumers.
All information on our website is published in good faith and for general information purposes only. Any action taken by the reader based on information found on our website is entirely at the reader’s own risk.