SEC Claims All of Ethereum Falls Under US Jurisdiction

Sorry, I could have been more clear when writing. This was my fault.

I meant this physically. The network nodes are physical, and they're in the United States.

If you are from France, you go to Japan, buy a bunch of arcade machines, then bring them to the US, and make an arcade company, I'm likely to say you built your company here, even though you did your planning, financing, and purchasing somewhere else.

That's (as far as I can see, maybe I'm wrong) what the SEC is actually arguing - a substantial portion of the physical network has been built here, therefore our laws apply.

As far as I know, that's just a core concept in the law. Where the thing happens, physically, determines which laws the thing is subject to, worldwide.

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> The SEC appears to be saying "45% of the validator nodes on the network are US based, therefore the transactions happened here, and our laws apply". Which is a horribly bad statistical assumption by an agency that would, one hopes, employ actual mathematicians.

This is the norm in the legal system.

I'm actually not entirely certain what assumption is being made here, or how mathematicians would be involved. Maybe this is because there's something I don't understand about the Eth network. I'm worried I'm missing something, or discussing the wrong thing.

I thought from reading the document that this was just them saying "we know who these nodes are, they're American, and let's divide." Am I misunderstanding?

As far as I understand it, what they're saying is "if any ETH goes over American nodes, then American law has to be considered when trying to figure out if ETH is legal in America." I believe that's entirely correct.

I believe the observation they're actually making is "a bunch of Americans using American nodes are on this network - nearly half of it - so since that's at least one, it applies."

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> this feels like an exact reminder of why centralization (Even at the country level) is bad

As a gentle reminder, this was what Ross Ulbricht said, was that the rule of law was bad because he didn't like it, and therefore we should decentralize to evade the law.

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There's a tendency, in my opinion, for these discussions to focus a lot on why each person thinks everyone else's opinion is wrong.

I'll ask you directly. What do you think is right, here? I personally think that's a lot harder to answer.

Should Ethereum, or if you prefer individual transactions, be bound to any country's laws? If so, which ones? If not, why not? If this isn't the right question to ask, can you suggest a better one to me?

I think that after people have answered what they think is right, they'll find it's pretty similar to what people are saying is wrong.

I am not able to see much wiggle room here. As I see it, if any decision is to be made, then the answer basically has to be one (or more) of the following:

1. The country where the hardware is running gets to set the laws

2. The countries where the transaction is happening get to set the laws

3. Both 1 and 2 (this is what I believe current international law supports)

4. No laws apply

5. The scale is something different than "country," but otherwise still 1-3

It's not clear to me what other options even exist. (Maybe I'm missing stuff?)

I think that as soon as people try to look for anything other than those five, and realize that something has to be chosen, they might start coming to some different viewpoints.

Do you prefer one of those five? If not, do you have an alternative, or maybe a replacement question?

I don't think almost anyone actually wants a lawless anarchy like in #4. But also, I think this discussion is rejecting countries as arbiters of laws here on the presumption that that's somehow obviously wrong, and it's not obvious at all, to me. Who else would do this but governments?

Just my beliefs, though. I'm happy to be wrong, and if you can think of a sixth option, I would like to know what it is, even if you don't think it's the right choice.

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I also have a really hard time with the amount of pollution this is all dumping, even after POS, to be honest. I think that gets downplayed too much. It's why I've never been willing to participate.

Just the ETH POW -> POS change dropped a third of a percent of the entire planet's power, they said, and that doesn't quite half-fix the consumption.

A third of a percent of the entire planet, for less-than-half-fixed, for the second largest network.

Two large countries' worth of pollution to, in effect, run a stock trading simulation.

Here, we debate whether the transactions should be subject to the laws of the countries.

I honestly am not certain that I think any of this stuff will be legal in ten years, with the massive environmental damage it's doing in climate change's 11th hour.

Pakistan's under water, the Great Salt Lake is about to be a dust bowl, the Atlantic Deep Water Formation is failing, we lost Antarctica's three largest ice shelves this year ten years early (conger, thwaites, glenzer,) the Colorado River is drying up, most hydro dams can't produce much power anymore, &c. Food's getting expensive, that's the world's #1 predictor of war, historically, and it looks like it's only going to get worse. I could write this paragraph for pages.

We're starting the real environmental problems, and it will speed up every year. The pitchforks are coming soon, people will want to place blame, and they aren't going to stop with the Koch brothers.

I know I sound extreme when I say this, but I believe we will live to see a time where waste of pollution for personal wealth gain will be seen as criminal, because that's going to be the only practical way to stop the carbon economy, and look what the alternative is. I say this because even the Federal Government is saying "we have less than ten years left" and nothing is changing.

There's nothing ethically wrong with blockchain on a clean grid, but the grid isn't clean, and this bragging about 50% stuff is a clear sign that we can't have honest discussions when money is in play. People like to measure how much of it is solar, but PV solar is 76% natural gas backed on average, US DOE numbers, and CSP 71%, something absolutely nobody wants to face. Wind's hardly different

"It's difficult to get a man to understand something when his salary depends on not understanding it." - Upton Sinclair

We're saying the same thing.

If you create something, and the thing you created is in country X, you made the thing in country X. It doesn't matter if you're in country Y at the time.

If I'm sitting in the United States, and I make something entirely on Japanese AWS servers, I built it in Japan. I wasn't in Japan, but the place it was built is Japan.

"I built it in X" doesn't mean "I was in X and I built it." "I built it in X" means "I built it, and the place it is is X."

We have trouble because it's only recently that these two concepts are meaningfully separable.

I'll phrase myself differently.

If a thing has been made, and its location is in Country X, then it is subject to the laws of Country X.

I accept that I wrote this poorly and that it's subject to misunderstanding that is my fault.

I wouldn’t be so sure about that, unless you are equally convicted in that court’s jurisdiction’s conviction to outright ban the whole chain from use - because as soon as two courts mandate two different forks, one of them will be banning a chain that the rest of the globe has consensus on. It’s a lot like banning a whole region from sending mail because one person in that region got caught mailing drugs.

I must not be explaining well, because you're saying the same thing I am. There can be consequences for refusing to comply, ranging from being turned away at the border to being thrown in jail, all the way to, in some countries, torture and execution. That's how the government gets you to comply.

But--here's the critical point--your compliance is required to actually decrypt the email/drive/whatever. This is unlike, say, a cloud hosting provider where the government can just show up with a warrant or probable cause and get the data without your involvement. With strong encryption your data is protected by math, and the math insures that the government or whoever has to go through you to get it. No exceptions. They might throw you in prison for the rest of your life, or threaten to kill your family to get you to give up the encryption keys. But they do need to get you to comply to get access to the decrypted data.

Likewise with blockchain technology. A court or law enforcement agency can't just appropriate stolen bitcoin. They have to either (1) recover the keys, or (2) have the thief pay an equivalent amount in reparations. What I'm saying is that they can't just show up at the Bank of Bitcoin with a warrant and request a stop payment, recovering the funds that way as they're used to with the legacy financial system. The blockchain is irreversible even in the face of the law, for reasons rooted either in physics (proof-of-work) or math (staking).

> The courts will have the power to force blockchains to reverse transactions or other fraud this way - at a technical level still quite difficult but if it becomes law then solutions to make it easier will be created.

No, at a technical level it is impossible. You could no more do this than legislate that pi=3 or raise the speed of light.