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8 Mich. Bus. & Entrepreneurial L. Rev. 73 (2018-2019)
Assessing the Evolution of Cryptocurrency: Demand Factors, Latent Value, and Regulatory Developments

handle is hein.journals/mijoeqv8 and id is 79 raw text is: ASSESSING THE EVOLUTION OF CRYPTOCURRENCY: DEMAND FACTORS, LATENT VALUE, AND REGULATORY DEVELOPMENTS Ryan Clements* INTRODUCTION ....................................................... 73 I. How DID WE GET HERE? DEMAND FACTORS AND REGULATORY FRAMEWORK................................................... 75 A. Cryptocurrency and the Historic Price Run............... 75 B. Familiarity, Ease ofAccess, Speculation, and Network Effects......................................... 76 C. The Initial Coin Offering Market ...................... 77 D. Regional Instability and Post-Financial Crisis Institutional Distrust.................... ................... 78 E. Criminal Activity and Regulation Through Enforcement... 79 F. Regulatory Challenges, Overlapping Jurisdiction, and Resultant Costs................................ 81 G. Public Statements, Backdoor Rulemaking, and Goodhart's Law ................................. 83 II. WHERE ARE WE GOING? EVOLVING USE CASES, LATENT VALUE, AND REGULATORY DEVELOPMENTS ............................ 85 A. Social Scalability or Sovereign Showdown? ............... 85 B. Bubble Dynamics and the Inevitability of Market Cycles.. 89 C. The Systemic Implications of a Cryptocurrency Price Collapse ....................................... 91 D. Public Trust in a Changing Financial World............. 92 E. Cryptocurrency's Long-Term Value Proposition............. 93 F. Long Tail Successes, Hype-Financed Infrastructure, and Research and Development.... .................. 95 CONCLUSION: ASSESSING THE FUTURE 97 INTRODUCTION Cryptocurrency-and particularly Bitcoin-has a polarizing effect on peo- ple. Some call it unsustainable' while others question its environmental im- * Ryan Clements, BA (Honors, University of Alberta), LLB (Distinction, University of Alberta), LLM (Magna Cum Laude, Duke University) is an adjunct law professor at the University of Alberta and an SJD candidate at Duke University School of Law. I. Christopher Malmo, Bitcoin is Unsustainable, VICE (June 29, 2015, 4:23 PM), https:// motherboard.vice.com/en_us/article/ae3p7e/bitcoin-is-unsustainable. 73