The crypto industry must do more to promote encryption, says Meltem Demirors


“I like to call myself a futuristic, or aspiring, cult leader,” Meltem Demirors, chief strategy officer at CoinShares — a publicly listed investment firm that manages nearly $5 billion in assets — told Cointelegraph.

Dimirers, who first entered the bitcoin (BTC) space in late 2012, further noted that “it’s fun to see how big the cryptocurrency sector has become,” noting that people from all walks of life are now in the cryptocurrency space. has an interest in. Hence, Demirors explained that “cryptocurrency cults” are bringing people together in a positive way, especially since it gives people a sense of purpose and belonging.


When it comes to regulations – one of the most important topics facing the crypto industry today – Demirors expressed skepticism. “Having been in this industry professionally for eight years, I get tired of talking about regulations, especially in the United States,” she said. While US regulators continue to issue frameworks for the treatment of digital assets, Demirors noted that “there has been too much talk and not enough concrete action.” Furthermore, Demirors commented that several crypto bills are attempting to reduce consumer use of encryption, which she considers to be the backbone of the Internet.

Demirors elaborated on the topic during an interview with Cointelegraph in Consensus 2022, along with the development of decentralized autonomous organizations (DAOs).

Cointelegraph: What are your thoughts on the recent regulatory framework in the United States?

Meltem dimers: I think the Lumis-Gillibrand Bill and the Token Taxonomy Act of 2021 have been good efforts to classify and classify digital assets. But, the challenge I have with so many crypto bills and regulations is that all are focused on financial services and taxation. They are focused on where and how we govern, tax and extract value for the government. So, the biggest issues I’m excited about are those centered around consumer privacy, self-sovereignty and freedom of speech, which are not being addressed in these bills.

Unlike so many bills that are focused purely on the financial services side, the industry needs to focus on crypto infrastructure such as data centers, connectivity, computations, semiconductors and the actual plumbing that serves any technology. Is. We also need to make sure that the US is a friendly jurisdiction for people to develop not only software but also hardware that can be deployed at scale. Today, we have not seen any united action on this. The industry has taken a piecemeal approach with New York state taking a very rigid approach, while states like Texas and Wyoming want to be home to crypto mining.

Moreover, the right to consumer and financial privacy is also being ignored. In fact, most of these bills seek more financial oversight. As an industry, it is important for us to continue to backtrack on this, especially in a world where central bank digital currencies (CBDCs) are being explored.

CT: Any suggestions on what the crypto industry can do to maintain privacy and financial freedom?

Mohamed: I think the biggest movement we’ve seen is the crypto war – and I’m talking about cryptography. In the early 90s, there was heavy debate about the use of encryption and encryption for a variety of consumer-focused applications. Encryption is really the backbone of the Internet and we are seeing a number of bills now that attempt to reduce consumer use of encryption and create backdoors.

Yet, once encryption backdoors are in place, they will be used not only to monitor consumers, but also against our government. It is now a matter of national security. So, I think the war of encryption is still alive and well. I also think we as an industry can do more to protect and promote encryption than to use taxpayer dollars to try to crack encryption algorithms like SHA-256, which Bitcoin is the backbone.

I also think it’s important to preserve code and speech. For example, open-source code is owned by anonymous developers as well as a large part of the crypto community. Unfortunately, there are several ongoing efforts to hold open-source developers criminally liable for how their software is taken advantage of, which is antithetical to the entire open-source movement.

In addition, we need to consider the treatment of virtual asset service providers, or VASPs. For example, if someone is running a node or if two people are doing peer-to-peer transactions on an open blockchain protocol, it is concerning to classify them as VASPs and force them to comply with regulation. There’s now a bill that allows people to report their Social Security numbers to anyone sending crypto worth more than $10,000. It’s ridiculous and we don’t have the same rule for cash. These are all factors surrounding privacy that make it easier for the government to target individuals in the crypto space, so it is important that the industry back down.

CT: You mentioned DAO during your talks in consensus, can you share your views on this area, please?

MD: Yes, The DAOs have been interesting because much of what I do at CoinShares is focused on strategy, which means investing, but also looking at what is happening in the crypto industry and how it is relevant to the investment world. So, I experiment with things that happen in crypto. For example, I recently joined some DAOs. I joined Friends with Benefits last year, my first DAO experience. I also started two DAOs with friends. is one hash dao, which is an art collection-focused DAO. The other is a DAO called DAO Jones, which is a fun play, but it is an investment DAO that uses Syndicate, a platform that allows users to form investment clubs in the form of a DAO that is a legal framework. fit in.

I’ve learned a lot about DAO tooling, infrastructure, and the exciting opportunities surrounding DAOs, along with the inherent limitations. The biggest thing I’ve learned, however, is that all communities need leadership. In particular, communities need strong theoretical leadership to uphold and reinforce community values, but also to advance the community. We have seen many communities in crypto start out with strong leaders, but then those leaders leave and challenges arise that divide the community. We saw this with bitcoin – five years after Satoshi left the bitcoin community we saw the struggle for power.

Overall, I think the DAO is an exciting area of ​​experimentation, but from an investment perspective, I think the DAO is still too early. Too many people are building DAO tooling at the moment without understanding what emergent behaviors we need to focus on. Governance is not a technology or crypto problem, but a very human problem that has existed since the earliest days of civilization. While I am excited about the future of DAOs, I think there is still a lot of work to do before DAOs can scale and be implemented in ways that allow for good governance.

CT: What are you most excited about as the crypto space moves forward?

MD: I’m really excited about community-owned infrastructure, or physical infrastructure. Today, crypto is dependent on centralized service providers such as AWS being used for utilities. But, there are many efforts underway to create peer-to-peer networks that will enable us to compute, better telecommunications, better broadband connectivity and decentralization, and the energy grid more resilient. I’m excited about taking crypto and connecting it with energy computation and connectivity in new ways. It will also make our global systems more resilient, which usually comes with decentralization.

I’m also excited about more developer tools and infrastructure. Right now, the surface area of ​​crypto is so large, it has become difficult for people to enter the space to build. Standardization, modulation and convergence around the core consensus algorithm are really important. The experiment has been fun, but now we’re learning what works and what doesn’t. In addition, it excites me to think of decentralized identifiers and verifiable credentials, along with using bitcoin as a communication protocol.