Bitcoin and Regulation: Digital Currency’s Correlation with Skype History

It’s good to have a look at the past and see if the previous successes can help to manage the difficulties of the legal and regulatory situation of bitcoin.

Photo: Gary Neave/Flickr

Photo: Gary Neave/Flickr

Apart from all the differences between Skype and Bitcoin, both concepts are quite similar. As a result the history of Skype can facilitate a better future for bitcoin, as the lessons can be learnt from the early days of Skype.

The industry of Bitcoin is assure that bitcoin is a currency and bitcoin companies are financial institutions.

In the beginning, Skype was assumed to be a telecommunications company. And if it was decided to apply all the regulations for telecoms  all around the world, it would have become the worst mistake Skype ever made, though it would have been a logical way of thinking and actually it is similar to the way many bitcoin actors are taking today.

If Skype tried to establish itself as a telco, different rules and directives would have appeared.

It’s good to have a look at the past and see if the previous successes can help to manage the difficulties of the legal and regulatory situation of bitcoin.

Regulation is not a given

Skype was never a phone company, first of all because Skype is just a piece of software developed by a firm and released to its users.

It is essential for every bitcoin operator to read the law very carefully and find the ways to get around the existing regulations. However, a big number of bitcoin proponents have been making claims that attract unwanted rules and regulations.

At some point bitcoin will need to connect to the existing financial systems. However, we should keep in mind that when these connections appear bitcoin will be touched by the existing regulations and that’s when the need for partners arises.

Of course, first companies that connected to Skype were taking risk, that’s why bitcoin firms in order to assure itself should make sure that any regulated activities are operating in one place.

Moreover, if the firm believes its activities shouldn’t be under control of regulations, it should state its points and not agree with the opposite.

Furthermore, no exceptions should be allowed, as making the exceptions can be used by others. Consistency is the biggest issue of the company. The bitcoin community should clearly announce that most of the activities are not regulated.

Some of the firms in the bitcoin industry are not satisfied with existing regulated services, the rules can be changed instead.

Reducing the Impact of Regulation

There is a way to reduce regulations, e.g. companies should be split into various operating units. The controlled units are in one company and the rest is in another.

It is much easier to manage a regulated entity if it has virtually no employees and few activities. . Then you only have to apply the regulations to a smaller part of the company, and can maintain the flexibility of the other half.

Don’t Ask Permission

Companies should not do what they are doing if there is no need in regulations they shouldn’t ‘ask for it’.

Moreover, companies shouldn’t ask a lawyer and expect him to find a loophole in the law. People should read and understand it on their own.

These concepts allowed us to operate Skype worldwide, with minimal legal costs and no effect on the main parts of the business but at the same time maintain the legal responsibilities that are needed to run a company.

These lessons helped Skype to become one of the leading software piece that people use to communicate. Today, the whole world can talk for free. Now bitcoin companies have an opportunity to apply the same principles in the financial sector.

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