When the bitcoin community discusses about one improvement that the peer-to-peer decentralized digital currency needs, there are a large number of bitcoiners that say it needs better consumer protection, whether it’s through governmental legislation or self-regulations.
Speaking in an interview with CNBC on Monday at the TechCrunch Disrupt in New York, Blockchain.info COO Peter Smith argued that bitcoin start-ups need to enhance their internal policies otherwise they might face intense regulations and legal fees.
“As an industry we need to be much more committed to consumer protection than we already are,” said Smith. “I’d like to see the Bitcoin Foundation [a nonprofit trade organization] take a more active role on this front. I’d like to see them take a much more active role on consumer protection and self-regulation.”
What could the bitcoin industry do? Smith suggests educating consumers regarding the different types of bitcoin services, exchanges and digital wallets. An example of this was the insolvency of Mt. Gox due to attacks – if consumers were better informed that they should only keep a small number of digital holdings then there wouldn’t have been widespread losses and theft.
Besides consumer outreach, it would be prudent for the bitcoin industry to adopt regulations imposed by the community itself. At the present time, there aren’t too many regulations and Smith believes this fact hinders start-ups to establish long-term plans because of the uncertainty involved.
“It means that we spend a burdensome amount of our money on legal fees,” added Smith. “And so this uncertainty has a very real cost.”
Rather than allocating their funds into legal fees, bitcoin firms should instead utilize that money to remedy and solve current problems.