Blockchain is on a mainstream tear. Over the Thanksgiving weekend alone, Coinbase — the United States’ largest exchange for trading blockchain’s blue-chip crypto currencies, bitcoin and ethereum — added over 100,000 discrete accounts in a little over 24 hours. Not surprisingly, both bitcoin and ethereum zipped to all-time-high valuations and continue to dominate market discussions in traditionally buttoned-up magazines and outlets.

All this frothiness has investors, academics, and speculators alike wringing their hands with anxiety. Just yesterday, Stephen Roach of Yale’s School of Management warned that bitcoin is a “toxic concept for investors” and that its rise represents a “dangerous speculative bubble.” Jack Bogle — venerated founder of Vanguard and proponent of prudent, low-cost investing — told investors to “[a]void bitcoin like the plague” since it “has no underlying rate of return” and no support save “the hope that you will sell it to someone for more than you paid for it.”

 

Bitcoin, and blockchain generally, is no stranger to claims of fraud and wild speculation (Jamie Dimon has famously attacked bitcoin for years, recently calling it “worse than tulip bulbs.”).

But outsiders are not the only ones fretting that blockchain is dipping its toes into a tulip-tinged mania (fun fact: tulip mania itself is a myth). Longtime blockchain supporters and thought leaders have openly questioned whether the space can justify or bear the money flooding into it. The question then, if outsiders and insiders alike are worried, is why?

One reason: Uncertainty.

As late as 2017, jurisdictions have been loath to weigh in on blockchain, preferring to allow existing laws and regulations to govern the space. That hands-off approach appears to be ending, however.

China and Korea have recently cracked down on initial coin offerings (ICOs). Russia, Singapore, Britain, and others have weighed in on the phenomenon as well.

More locally, the SEC has intimated that at least some cryptocurrencies could fall within its regulatory purview — but at the same time has exhibited notable restraint, declining to take action against all but the worst ICO-related scams.

Likewise, while the IRS has not formally weighed in on taxation of cryptocurrencies since publication of its March 2014 memorandum, it recently won a minor battle with Coinbase to compel that exchange to disgorge financial records of some of its account holders who, the IRS suspects, have been evading tax payments.

So what are investors to make of this regulatory mish-mash? It’s hard to say — some argue that regulation could tamp down the innovation and adoption of blockchain, while others think that more regulation is necessary before main street investors will entertain blockchain as an asset.

Whatever the outcome of the current regulatory fog, however, one thing is certain: blockchain investors, enthusiasts, and side-liners should all push to reconcile the technology and its implementation with existing laws and — like Delaware’s recent blockchain legislation effort — advocate for regulations that both support the blockchain effort and protect its users and developers.

In so doing, blockchain can take another necessary step toward adoption. Check out stockchainglobal.com as a further reference of these regulations.