Cryptocurrency: The Lesson Of EV Charging

The Securities and Exchange Commission (SEC) along with Gary Gensler are making a lot of noise. We have an administration in the White House that isn't exactly crypto-friendly. The media repeatedly warns us how government is going to take over and not allow cryptocurrency to flourish.

Many fear that the opportunity will be lost. Government, after all, is in full control of money. This is what many believe. Unfortunately, that is counter to what history shows. In fact, we are going to explore how the narrative of politicians and bureaucrats can often be countered by what is actually taking place.

We are seeing many lessons for cryptocurrency taking place right before us. Governments can be oppressive. On this, there can be little dispute. People who are driven by power will not give it up. They will do anything to hold onto it. As it slips away, they only get more desperate, furthering the tyranny.

Of course, we see what ends up happening. Again, we have many examples of how things end up. Often, these people (and institutions) fall.

Cryptocurrency is a threat. Actually, blockchain technology and the evolution it is undergoing is really opening the door. We are still in the early stages yet the path is emerging which should excite everyone, expect those in power.

One of the lessons taking place right now concerns the charging of electric vehicles (EVs).

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Government Be Damned

If you have not followed the situation regarding EV charging, you are not alone. It is something that can be rather technical and dry. The specifics really are unimportant. What matters is the situation that is unfolding.

This all has to do with standards. There is one called CCS-1. This was put forth by Volkswagon as a result of "Dieselgate". Part of their penalty was to set up charging networks. The decision was made to go with this standard.

Tesla, when it got into the game, opted to create a different one. Without going into the details, the main difference is the VW plus is like 220 whereas Tesla's is akin to 110. It is much smaller and easier to use. There is also a noticeable weight differential.

We also have performance. It seems the VW project is not up to the standard people expect. The chargers do not work and lack the reliability of the Tesla network.

Ultimately, we are seeing the VHS/Beta moment playing out again. The situation is governments, especially the Biden Administration, is pushing the CCS standard.

Here is where the government can be damned.

Businesses Move In Another Direction

Tesla is the largest EV manufacturer in the United States. Rivian is a start up. Ford and General Motors are two of the best known brands in automotive.

All four have basically told the government to pound sand.

Over the last few weeks, the others having joined Tesla in a partnership to use their charging network, which is the largest in the country. For the time being, once this production starts, they will support both standards. However, history shows this will likely be short-lived also.

Here we see where some of the biggest names are going away from what the government is saying. Reports are that Hyundai is about to join the party and announce an alliance with Tesla.

What happens if the entire automotive sector, or most of it, opts to ignore what the Administration wants? Is it able to keep dictating that the CCS standard will be the norm? It can try but it will be fruitless.

Businesses are showing who is in control. Politicians and bureaucrats can pound their fists all they want. If the majority of an industry just ignores them, there usually is little they can do.

Establishing The Standard

This is the key. What Tesla did was to simply build out a better system than what else was out there while establishing the standard. The benefits to what is produced became evident as the network grew.

Here we see a profound lesson for cryptocurrency.

At the moment, Wall Street is the standard. It has a legacy of being in control of financial matters, with some powerful institutions involved. However, people working with blockchain has the opportunity to develop a new standard. This is one that is not aligned with the existing system. Instead, it becomes a better option.

We know this includes decentralized finance (DeFi). We cannot overestimate the power of decentralization. Nor can we skip the fact that we are operating in a realm that is known for its standards.

The digital world lives by protocols. We see them all over the place. Here is the major advantage when it comes to the networks we are building.

It is easy to see how they are incompatible, at the moment, with legacy finance. That is by design. Naturally, the latter wants to take over cryptocurrency, closing the gap by pulling it under its umbrella.

The challenge is this is more technical than financial. Cryptocurrency is a new form of money yet the networks being constructed are where the real power comes from.

Recently, the push towards Wall Street comes at the exchange layer. Most in cryptocurrency know that CEX is a point of vulnerability. It was repeatedly proven. However, now that is fully exposed and the industry can take steps to move around it. My guess is we see the evolution of decentralized exchanges (DEX).

What is really fascinating about these is they can pop up anywhere. Liquidity could be an issue. That said, it can be overcome by tapping into liquidity pools. Under this standard, we can see how custodian is not as important. Actually, it is removed from the equation.

Eventually, I believe, crypto-to-crypto transactions will operate outside the exchanges (CEX). There will be many who utilize them for convenience, a number that will decline in time. As the older generation fades away, this will mean the younger ones will be making up the bulk of the activity. Here is where we see how the future could be much different.

Connecting cryptocurrency to fiat is still very important. Here we also see the diminishing necessity over time. As more goods and services can be purchased directly, making payment using digital assets, the need for fiat is reduced. It will not be eliminated for a long time yet the influence will wane.

This is the new standard we are erecting. It is a long process and one that goes under the radar. This is common. A month ago, how many were talking about the value of Tesla's charging network. Even the bulls were ignoring it. Evidently, there is a lot of value in a new standard.

The same holds for cryptocurrency. We are in a fight, with the new taking on the old. History shows the old will always did in and try to maintain its relevance. Yet, when a new standard emerges, it can be game over.

It is the lesson we see repeated quite regularly.

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