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What Will It Take to Regulate Crypto Exchanges?

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Konstantinos Stylianou is an assistant professor at the University of Leeds School of Law, and a visiting scientist at the Brown University Department of Computer Science.


Shortly after Bitcoin SV was delisted from Binance, CoinDesk advisor Michael Casey published an insightful op-ed discussing whether the delisting amounted to censorship (it doesn’t), whether exchanges should be held to high standards of neutrality (they should) and whether regulation is necessary to achieve this result (it is).

The idea is that because major exchanges play such a crucial role in the industry (Casey claims that “[t]hey are the cryptocurrency industry) they should not be allowed to arbitrarily discriminate between crypto assets — rather they should be regulated to operate as neutral platforms.

But ask any regulation expert and they will tell you that, absent Goldilocks conditions (hold that thought), neutrality is neither the natural state of markets, nor the natural instinct of regulators.

If that’s the case, regulation of the kind that would have saved Bitcoin SV and of the kind Casey advocates for – while possible – might not quite be around the corner.

Neutrality is rare and regulation even rarer

That neutrality is not the natural state of markets, we’ve known for a while.

It is hard to notice when there is an abundance of choice and people get what they want, but when there is too little of something, the owner of that bottleneck resource often becomes partial and does not treat everyone the same.

When the first telephone networks were rolled out, they suppressed devices and services from competitors and even arbitrarily refused call service. Microsoft saw Netscape as a threat and sabotaged it. Apple and AT&T similarly blocked Skype in the early days of the iPhone. There are countless other examples of platforms disfavoring complements or customers.

Were regulators called in to save the day in all these cases? They were indeed. Telephone networks were designated as common carriers, which came with the obligation to provide non-discriminatory service; Microsoft was forced by antitrust regulators to abandon the practices that squeezed Netscape out of the market; and Apple and AT&T dropped their restrictions against Skype after the Federal Communications Commission threatened them with net neutrality action.

It may seem that regulation came to the rescue whenever necessary to restore neutrality. But the truth is that despite occasional corrections, neutrality still remains the exception in the market and in regulatory action.

Part of the reason is that the law actually acknowledges that non-neutrality is not all that bad. The ability to deviate from uniform practice is what allows companies to differentiate themselves in the market. Not all grocery stores carry the same products, neither do they all place them in the exact same shelf, and this helps consumers and producers address diversified needs.

Even extreme differentiation, like exclusive agreements that make a business proposition unique in the market, can be good. For example, Nintendo’s exclusive console agreements helped bootstrap an entire industry by tying popular games to Nintendo’s consoles thereby increasing competition.

It is not that this kind of discriminatory practices have no downsides. Far from it. But it is also a standard assumption in modern market-driven economies is that regulation distorts markets too, and therefore, the enactment of rules requires proof that, left alone, the market would perform demonstrably worse.

In the mind of a regulator

To decide whether Binance, or any exchange for that matter, should be neutral and not discriminate against crypto assets (be it cryptocurrencies, crypto derivatives or other), regulators would consider a number of factors.

Power

The most decisive factor to regulate is sustained monopoly power or dominance in the market.

Regulators usually impose neutrality on platforms because users and/or complements (read: cryptocurrencies) can’t or realistically won’t turn to alternative platforms, which would allow the dominant platform to exploit them.

If Binance were a monopoly exchange, then delisting a cryptocurrency would result in driving it out of the market. Or, if the cost of switching from Binance to another exchange was prohibitively high, then, similarly, Binance users and listed cryptocurrencies would be trapped by Binance’s choices.

But neither of those conditions are true here. There are numerous exchanges on which Bitcoin SV can be traded, and signing up with Binance does not preclude users from trading on other exchanges too. In other words, both Bitcoin SV and users multi-home.

In that sense, Bitcoin SV is not in the same position as companies listed on NYSE or Nasdaq, because by and large, companies are listed on only one exchange, and delisting them would mean that they cease to be publicly traded.

Harm and market distortion

Regardless of power, would decisions such as Binance’s delisting of Bitcoin SV undermine important public interest goals such as market stability and efficiency, consumer and investor protection, and capital formation?

Regulation is more likely if the problematic conduct threatens harm to public interest goals, is frequent, and has long-lasting effects without second-best alternatives being able to contain them.

At the moment, the picture is still fluid. For one thing, regulators still grapple with the question of whether crypto assets even form part of financial markets. If they do not, then there would be no legal basis to subject exchanges to financial regulation.

Assuming that they do, the frequency of the problematic conduct matters too. Crypto delisting is not unheard of but it is not exactly common either. There is no exact formula to calculate a threshold. In the case of network neutrality rules, fewer than five instances were enough to set the regulatory process in motion, whereas for privacy, numerous and repeated instances by tech giants have not resulted in regulation yet.

We also don’t know the extent of the harm of delisting. When the trading of conventional securities is suspended, they effectively disappear from the market, perhaps permanently. On the other hand, despite Bitcoin SV’s delisting from Binance, it still traded on another seven exchanges.

To be sure, Bitcoin SV’s price suffered significantly upon the announcement of the delisting on April 15 (from $73 on April 14 to $55 on April 15), and the effects to its medium-long term liquidity and reputation are yet to be accounted for (likely bleak).

This, in turn, can have severe consequences for investors’ financial situation.

But regulation is concerned with broad effects, not individual actors. The key lies less in the fate of Bitcoin SV specifically, and more in the effect of the practice of delisting in the overall stability of the market. It is a very different situation if delisting is regarded as a normal business practice whose risk is acceptably assumed by investors, and if delisting is regarded as serving no other purpose but to manipulate the market or to defraud investors. Only the latter could invite regulation.

Information inadequacies

The market can only work efficiently if all parties are sufficiently well informed to evaluate their options.

If investors had perfect information, then their reactions to Bitcoin SV’s delisting would reflect their up-to-date assessment, and there would be no need for regulation to protect them from anything. Any price, reputation and liquidity fluctuations would correspond to investors’ full and accurate beliefs and manipulation by Binance would be impossible.

This is clearly not the case here or in any other market. Perfect information is one of the most unrealistic assumptions of neoclassical economics in modern economies.

But the obvious solution to information inadequacies is more information and more transparency, not neutrality. The difference is that transparency enables actors to make a (presumably better) choice, whereas neutrality is a choice itself: it mandates a specific treatment (i.e. non-discrimination).

Regulators would normally want to start with the least onerous measure (transparency). If it is not effective, they can escalate to neutrality. If still ineffective, they may even dictate the rules of listing and delisting themselves.

Unequal bargaining power and anticompetitive conduct

The main idea behind non-regulated competitive markets is that actors behave well because market forces discipline them. If, however, the competitive forces exercised by competitors (other exchanges), complements (cryptoassets) or customers (investors) are weak, market players (exchanges) are unconstrained to act in ways that harm others.

Think about how much more difficult it would be for an exchange to delist Bitcoin with its much higher market capitalization, velocity and liquidity compared to Bitcoin SV.

Evidently, Bitcoin is more valuable to exchanges and therefore the constraints around how exchanges treat it are tighter. In reality, the majority of cryptocurrencies are nowhere near as important as Bitcoin, and the fact that they are not backed by unified institutional actors further diminishes their bargaining power.

Large investors could have a similar constraining effect, since exchanges would not want to lose investors who can generate large volumes.

For this to work it would mean that cryptocurrency ownership is concentrated in large investors (there is evidence in that direction, for example 42 percent of Bitcoin is owned by the top 0.01 of addresses), but also that these investors are actually active and that churn is high or at least plausible.

Politics, politics, politics

The factors listed above leave out one important aspect of regulation: the fact that, ultimately, it is a political game, not an academic exercise. If politics favor regulation then that’s the most likely outcome regardless of how the factors listed above weigh in. We even have a fancy name for it: New Institutionalism.

As a function of the executive branch, regulation is subject to political pressure and revolves around interest groups. Nascent immature markets, such as that of cryptoassets, are usually captured by the interests of the existing regulatory authority and those of the public.

They are captured by the existing authority (in the US, this is the SEC) because they are already in the game and by extending their reach they justify their existence. Widened reach and heightened activity entitles them to more funding and higher rating. Just look at how everyone speaks of the European Commission as the global antitrust and privacy enforcer after having gone after Google and the like.

Nascent markets are also more likely to be regulated in the name of the public interest both because people are generally more vulnerable in new market contexts, and because industry interests have not developed lobbying capacity yet. This leaves the field clear to side with the public which is generally seen as the weaker side.

A few industry associations are already present in blockchain markets (EEA, PTDL, ISDA) but none seems to represent the collective interests of exchanges. On the contrary, regulatory interest and grassroots support for crypto assets seem stronger.

In the end, it is usually not a question of whether a market segment will be regulated or not; rather a question of how it will be regulated.

Coin in vice via Shutterstock

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Top 10 Best Paving Companies In Daytona Beach FL.

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Best Paving Companies In Daytona Beach

Here are the 10 best paving companies servicing Daytona Beach FL.

  1. Rockwell Construction Services
  2. P&S Paving
  3. Halifax Paving
  4. D & W Paving
  5. Duval Paving
  6. Pavemax
  7. E & H Paving
  8. M & S Asphalt Paving
  9. ACET Recycling
  10. The Alternative

Rockwell Construction Services

Rockwell Construction Services (RCS) is based out of Daytona Beach, Florida. Provides professional paving and construction services throughout the Volusia County area, they make quality workmanship their number one priority.

With a full-service approach to construction and paving, Rockwell has it all. The scope of their work includes:

  • Asphalt paving / Repair
  • Sealcoating
  • Sitework
  • Parking Lots
  • Driveways
  • Millings
  • Heavy construction projects

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P & S Paving

P&S Paving, Inc. has grown to the point where they work major highway construction and earthwork projects. They’re also at home onsite for small driveways and parking lots, producing large amounts every hour, in a cleaner, more efficient manner.

P & S Paving Reviews:

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Halifax Paving

Halifax Paving, Inc. has construction experience building roads, airports, and highways. Their portfolio is big enough to offer most services, from bike paths to highway work, subdivisions and apartment complexes.

Halifax Paving Reviews

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D & W Paving

D & W provides asphalt paving, patching and site work in central Florida’s Volusia, Flagler, St. Johns, Seminole and East Marion Counties. With GradingExcavating and FillingBase WorkAsphalt Paving, and Asphalt Patching in their portfolio, they’re one not to miss.

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Duval Paving

Duval Paving, LLC has been in operation since 2011. Paving new driveways and parking lots, repaving, and sealing commercial and residential properties is right there in their wheelhouse.

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Pavemax

PaveMax uses industry best practices and green technology to use in their projects. With a focus on meeting their customers’ needs, their work doesn’t suffer in spite of their relatively quick pace.

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E & H Paving

E & H Paving LLC brings more than 35 years of experience in the state of Florida to the table in their outstanding asphalt services. Look out for them in residential and commercial spaces.

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M & S Asphalt Paving

M&S Asphalt Paving is a full-service asphalt paving company offering quality services, driveway work, parking lots, roads, businesses, and commercial parking for a range of operations.

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ACET Recycling

ACET Recycling offers recycling services to site development projects across the state of Florida. Consider it a sort of one-stop-shop for site services of different types and sizes.

ACET Recycling Reviews

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The Alternative

The Alternative provides paving services in Daytona Beach FL.

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Pave The Way In 2020

For your paving and construction projects, the businesses listed in today’s article offer a range of great consultations and full service portfolios. Reach out to a few of them, make a connection with one, and happy paving!

For more great articles like this, make sure to check out some of our other blogs, as well!

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What is TikTok Good For?

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TikTok Benefits

TikTok is great for entertainment, getting famous, making sales, staying connected with current trends, networking with brands and influencers, and encouraging creativity.

The app was originally called Musicl.ly and didn’t experience much success until late 2017, when technology development company, ByteDance, acquired the app for $800 million. They launched it the same year and made huge modifications, turning the original app that was basically for teens to edit their videos of singing, dancing, and lip-syncing into a social platform that racked up over 500 million active users within just two years.

The app has surpassed the daily downloads of all the big guys in the field and was the most downloaded app in the AppStore in 2018. While this app is not showing any signs of slowing down, it’s time to take advantage of the momentum and benefit from its outstanding features.

TikTok Is Great For Killing Time

The one thing every social media platform struggles with, eventually, is boring content. This is the same reason why many people are “Team Facebook” or “Team Snapchat” or “Team Grindr”…you know. Those who get on Facebook don’t really go on Snapchat, and those who get on Snapchat don’t really get on Instagram or Facebook. This applies to most other social media platforms, as well.

All of these platforms are losing engagement, while TikTok focuses specifically on engagement. There is no boring content, here. It’s all entertainment.

Let’s say you are scrolling through the homepage and you find a boring video. You can just scroll once more and there will be a video you find enjoyable. When you are on a lunch break or trying to kill time, TikTok is the only app you need for your daily entertainment. Videos between 15 and 45 seconds long, and content is super engaging.

Almost Anyone Can Get Famous

This app has made more people’s dreams come true than Disneyland. You see, back in the day, when you wanted to get famous, you had to network, take acting classes, do some modeling, go through dozens of interviews and, most importantly, you had to know someone in the industry.

Now, things are different and as the world progresses forward with technology it is easier to be discovered than ever. Other giant social media platforms like Facebook, Snapchat, Instagram, Facebook, and Twitter did a great job giving ordinary people the ability to get noticed. And a lot of people did but, eventually, it got harder and harder for new talents to rise up.

TikTok, on the other hand, took things to a-whole-nother level. They created a new culture on the platform with trendy challenges anyone can do, hashtags that let everyone be discovered, and so much more. You could have no talent and still go viral. You could be the most boring person on the earth and still trend. Trust me: I’ve seen plenty of dead boring TikTokers.

I mean, why not look at my 70-year-old grandfather? Grampa Charles ended up racking up 1.3 million followers in just a few months, and his posts are…well, they’re special.

TikTok Tips
Grandpa Charles!

If he can do it, trust me: you can too. Charles barely knows how to use his iPhone 6, and he’s more famous than you. Think about that for a second.

TikTok Is Great For Making Sales

Not only is TikTok great for killing time during that 10-minute smoking break, but how about turning those 10 minutes into creating a 30-second TikTok video that could potentially reach 1,000,000 views?

Ok, let’s keep it real now…

…maybe 50,000. Which is not so far fetched, with TikTok’s algorithm. That is another topic, though (specifically how to get more followers on TikTok). Take Gary Vela, for instance: this online marketer recently shared tips on how he generated over $7,000 in sales using TikTok, in his article “How to use TikTok to generate more sales“.

So, next time you are on your break, make it productive and remember: if you are wondering what TikTok is good for, it could potentially be one of the newest ways to increase your bottom line or make that extra cash to pay that insurance bill.

TikTok Keeps You Up-To-Date With Current Trends

From time to time, there are a lot of things that trend on other social media platforms and, sometimes, we only find out about those trends long after they were a thing.

Ladies and gentlemen: TikTok has changed that. You now no longer have to feel left out. When something is trending, you know, because it’s the first thing you’ll see on your home page. Not ten days later, once all the cool kids have had their fun already. Right now, where all the not cool kids can get in, too.

You’ll see your buddy doing it, right there in your feed, where you can quickly catch up with everything. TikTok keeps you relevant in today’s world.

Awakening The Creativity Within

There are many people online who think they have no talent. Go through Quora or Reddit or any social media platform, and you will see many people saying they “just can’t do it”. What they actually mean is that they don’t know how to do it. Yet.

Luckily for them and you and everyone else, anyone can “do” TikTok. Anyone can make a TikTok video. Anyone can pick a song. Most importantly, the great thing you will love about this app is that it gives you a creative framework you can play around with.

You make a video you think might not is all that good and, next thing you know, the final result after edits and everything else, is a whole new animal. This application truly inspires a new character inside you, even after just one video. You can easily develop the motivation to make a second, and then a third, and fourth. Before long, it’s game over: you are officially a TikTok master.

Connect With Brands and Influencers

This is especially good for businesses. You can easily connect with other brands and reach out to influencers to collaborate. It has never been easier, and the playing field has never been more level.

Think you’re just getting started out on TikTok, so who would want to speak to you? Some of the biggest names in the world are “just getting started out”, here. They’re all discovering this exciting new thing at the same time as you, and they’re looking at what you’re saying.

Reach out to influencers. Do duets with celebrities. If Twitter was the start of the rich and famous rubbing shoulders with everyday people, TikTok is the next step in that evolution. Don’t be scared. The world is waiting to hear from you.

Previous Article: How to Become a Legal Citizen of the United States? Spoiler Alert: It Involves A Baby.

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Snake Safety While Hiking – How to Protect Yourself

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Snake Safety Tips

Hiking is a great way to exercise, get out into nature and breathe the clean air and take in an adventure. But when this adventure stops you in your tracks, and it will, if it’s a snake, you had better be prepared.

While a snake encounter is highly unlikely, and a snake bite is even more unlikely, there are some things you should know before stepping into those woods.

DIY Research

If you’re in unfamiliar territory, especially in certain times of the year, you may want to do your research on what native snake species you may encounter. While there are venomous and nonvenomous kinds of snakes, you’ll want to find out what lurks in your neck of the woods. The most common venomous snakes in the United States include coral, water moccasins, copperheads, and rattlesnakes. A park ranger or local guidebooks should easily tell you what to look out for.

Hiking Times Matter

Snakes are cold-blooded animals and seek heat typically during early morning and late evening. During the day, they are typically found under rocks, leaves, and timber trying to seek protection from the midday hottest heat.

If you hear or see a snake, remember, they are just as afraid of you as you are to them. Step away and do not engage to get any closer. They will be set to defend themselves however they see fit to.

Safety Tips For Your Safety:

Give snakes space. 

Allow space between you and the snake. Do not startle it by moving quickly. If the snake doesn’t move, give it a few minutes and walk around it slowly. If you must on a narrow path, stomp your feet to get the snake to move. Rule of thumb, stay at least twice the body length away, as striking distance is half its body distance.

Watch where you step in the wild.

Just always be aware of your surroundings and your footing. Snakes are very good at hiding under things, camouflaging them from the naked eye.

Use protective clothing.

Feet, ankles and lower legs are the most bitten areas on the body from a snake. Wearing long pants and having good hiking shoes should always be a prerequisite to a good, safe hike.

Use trekking poles to maneuver overgrown trails.

These come in very handy when you approach an overgrowth area of greenery. You never know what may be in that so using your trekking pole to comb through first is highly recommended. Never poke or prod a snake with anything, especially these poles.

Also Read: 6 Awesome Camping Hacks Explained

If Case Of A Snakebite:

First and foremost, do not panic. Try to determine the species of snake that bit you. If possible, take a picture for identification. If nonvenomous, usually the most that you will need to do is wash the site and put an antiseptic on it. If you have a first aid kit handy, the alcohol wipes would suffice. If in fact a venomous bite, do not make a tourniquet or try to suck out the venom from the wound. Instead, relax to slow the blood flow and heart rate from spreading the venom to other parts of your body. Getting to the nearest medical facility as soon as you can, with an accurate description of what kind of snake it was, is crucial.  

Much of snake safety is common sense. Never hurt or harm nature unless in a dire event that would call for it. Nature should be looked at, admired, and be left alone. Enjoy your hike!

Attention: If you are into hunting you might want to check out E2 Armory, they carry some of the highest quality AR 15 Parts in the market.

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