Ethereum’s Merge May Have Opened a Regulatory Nightmare
<p>Traditionally, the same thing that made cryptocurrencies into pariahs also made them unique. Bitcoin, Ethereum and other first-generation tokens relied on Proof of Work to run their blockchains, a labor-intensive mathematical process that consumes obscene amounts of electrical power.</p>
<p>While their high power use didn’t exactly endear crypto tokens to environmentalists, they did distinguish the tokens from traditional securities. There’s a hard cost to create a Bitcoin or an original Ether token, much as there’s a hard cost to mine gold — another asset that society has arbitrarily decided is valuable.</p>
<p>Because holders of Bitcoin expect their tokens to gain value mostly due to the high cost of creating them — and because Bitcoins aren’t used for anything other than making financial transactions — mined coins like Bitcoin have thus far escaped many traditional regulations.</p>
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