Regulations will lead to a Two-Tiered Bitcoin Economy

by Thibaud Marechal

This is an opinion editorial by Thibaud Marechal, builder of Knox bitcoin custody provider.

FTX is the greatest excuse, whether planned or not, to further control bitcoin on-ramps and take away the possibility of self-custody and true ownership.

There has been a lot of coverage around the FTX catastrophic failure, with current developments and warning signs from the past. Will this have an influence on bitcoin in the coming years? I don’t care about shitcoin casinos, as most of them will probably be regulated as securities exchanges or shut down due to outright fraud or insolvencies. This is almost a done deal. But what about bitcoin?

Let’s play and game and speculate on the effect FTX will have on the future of bitcoin.

Bitcoin usage is going to split — gradually then suddenly. It’s been in the works since the genesis block was produced on January 3, 2009. There will be two ways to use bitcoin: as a black market good or as paper bitcoin on regulated exchanges. This future has almost always been true, but the distinction will become more clear-cut soon enough.


On one end, people will buy bitcoin IOUs on custodial entities giving up full KYC (know-your-customer) details, automated tax reporting and zero privacy. Bitcoin is going to be used as the underlying asset to the global financial surveillance network, the likes of which we have not yet seen. Regulated companies will form a network of compliance on top of Bitcoin and prevent you from holding what could have been truly yours. Perhaps they will even wrap it into a central bank digital currency (CBDC) to protect you against the volatility of bitcoin. You will buy paper bitcoin and you will be happy.

On the other end, bitcoin will flourish as the tool that it always ought to be: black market money. This will be the beginning of a new era for Bitcoiners who have zero fiat, i.e., the Bitcoiners who run full nodes, have full privacy and pay peer-to-peer for stuff with their hard-earned sats.


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