RE: The MASSIVE Tether Ticking Time BOMB
The Tether/Bitfinex affair demonstrates the lunacy of the cryptocurrency libertarian revolutionaries' fantasy of their technology fueled utopia of non-government. No sane polity will allow for usurpation of coinage and capital controls by two-bit hacks "minting" digital garbage.
As you eloquently point-out, the central authorities merely need to control the access points to and from the crypto-market by enforcing AML regulations that already govern banks and financial institutions. When no banks will deal with cryptocurrency exchanges, the entire scheme will collapse. That the central authorities of major polities have allowed for the growth of cryptocurrency market, thus far, assures near-future central control and regulation over the cryptocurrency market. It will be beneficial to all involved, when central authorities properly regulate cryptocurrencies paving the way for major financial institutions to enter. Then, and only then, will mainstream adoption finally occur. Decentralization is a garbage pipe dream of teenagers for a by-gone era that have not existed for ten-thousand years.
I don't necessarily have to agree with this observation. Do not underestimate the power of peer-to-peer exchange as demonstrated by LocalBitcoins.
If the government goes full retard on AML/KYC implementation, then it opens the door for people to resist and go all in to the black market where exchange is done via remittance centers, e-currency like Perfect Money and MTO services.
The harder to buy, the price soars to the moon! Crypto will then become more valuable store of value than ever.
When cryptocurrency to fiat conversion is essentially severed by banking interests and governing regulatory agencies, then cyrptocurrencies effectively become worthless baubles. Cryptocurrency is not like heroin or cocaine that has end-use value. It is merely an exchange medium that requires an end-point conversion to fiat. What sane mercantile institution will accept cryptocurrencies for their wares, when there exists no financial institution for fiat conversion?
For cryptocurrencies to have any value, it requires banking cartel support and government assent for fiat convertibility. Can "peer to peer" transactions support millions or billions of USD worth of transaction orders? Peer to peer is a fad, not some revolutionary exchange medium that will replace the current financial institutions.