It is now a decade since Satoshi Nakamoto published his White Paper introducing Bitcoin, the world’s first electronic cash technology. In the last 10 years, we have seen some Bitcoin pioneers earn billions, get sentenced to prison, assist transnational criminals hide their illicit proceeds, and disrupt sovereign currencies, the financial services industry, and modern economies. But what we have not seen is many government regulators do their respective jobs to set up thoughtful, enforceable rules that can both facilitate the growing financial technology industry and protect investors and the general public from hucksters and scammers.

On Oct. 31, 2008, Nakamoto’s White Paper, a business plan of sorts, described how blockchain technology could be used to create a digital currency. This technology allows transactions to be verified by a decentralized online network with no government supervision. Blockchain thus provides an immutable, universally transparent ledger to distribute money, trade, and services without the need for the usual trusted intermediaries of the past.

Blockchain technology supplants the old world order of centralized services controlling all the data and mechanisms of business. With the advent of the blockchain, the largest financial services entities, auction houses, and social media are no longer in the hands of monolithic transnational corporations. Instead, marketplaces and services are dis-intermediated, purchasers are empowered with choice and lower prices, and vendors can conduct business directly with greater efficiency and transparency. But this technology has also found more pernicious uses. It has been used en masse by drug dealers, arms dealers and human traffickers as well as tax evaders and corrupt politicians to launder their money and hide their ill-gotten gains.

Within a few years everyone wanted in on this next big thing. Companies simply added the word “blockchain” to their names and their values shot up. It was “irrational exuberance” all over again. It was inevitable that bad actors would get involved. In May, the Wall Street Journal published an analysis of 1,450 cryptocurrency offerings, determining that 271 of them were deceptive if not outright fraudulent. Many blockchain White Papers contained text copied and pasted from other plans. Some of the engineering and management teams for new blockchain businesses were fictitious. Much of the touted technology remains in the development phase.

Last December, a Bitcoin was valued at almost $20,000. Today, it is valued around $6,400. It is no surprise that the cryptocurrency industry has lost some $650 billion since January. Those investors who came late to the crypto boom have seen their profits erased and many their nest eggs fried. The classic pump and dump schemes of times past found new victims.

Bitcoin Turns 10
This picture shows a visual representation of the cryptocurrency bitcoin at the 'Bitcoin Change' shop in Tel Aviv, Israel, Feb. 6, 2018. JACK GUEZ/AFP/Getty Images

On this 10-year anniversary of its creation, it is the time to reflect on blockchain’s success and failings. We should welcome smart regulation, even if blockchain technology was about decentralization and the erosion of the state. We hear about our government using smart sanctions, smart bombs, and smart borders. There is also a movement in urban planning toward smart cities. It is time for smart regulations. Regulators, who have been caught flat-footed and ill-equipped to deal with cryptocurrencies must find rules to reward innovation and punish bad behavior. Permissive regulatory environments like those set up in Estonia, Japan, Malta, and Singapore are one model. Outright bans like that in effect in China are at the other extreme. The future will no doubt lie in the middle. Hopefully, the Securities and Exchange Commission will propose reasonable solutions. If it does not, another foreign regulator will, and the U.S. will have to play catch-up to lead the next technological revolution.

And while the grown-ups work to stem the fraud and moderate the hype, providing clarity and predictability for developers and investors alike, the technologists can do their jobs. Most of the blockchain companies that issued Initial Coin Offerings had no scalable software to go to market. Few blockchain solutions have made it to the main net let alone have real decentralized applications to run on them.

Blockchain, decoupled from the mania of cryptocurrency, can finally disrupt the industries and arenas that need a paradigm shift: climate change, refugee assistance, food security, direct democracy initiatives, real estate transactions, international arrangements of purchase and sale, and remittances, to name a few. The United Nations Sustainable Development Goals can be promoted, implemented and monitored using blockchain technology.

Smart regulations could save this innovative technology. Like many other recent technological developments, innovation and disruption offer both risk and reward. Blockchain technology can truly change the world. But it will need help to reach its twentieth year. Bring on the smart regulators.

James Cooper is a Professor of Law at California Western School of Law in San Diego and co-founder of the One World Blockchain Alliance.