Regulating Crypto: How we move forward as an industry from here

The problem in reality would be non existent if people used crypto currencies for what they were meant to be used for: an alternative economy with no need for exchanges and third parties: you sell me a banana, I give you some satoshis.

Not saying this is convenient IRL, requiring to sync to a network and chain is expensive and difficult from a phone, but that was the supposed use case.

I'm more and more convinced that blockchain industry solves no real world problems at all, except in the crypto sphere itself (like smart contracts do have a use...for crypto exchanges, crypto games and crypto gambling) and that 99% of the people who get involved couldn't care less about crypto use cases, only if they will sell for more $ than they bought for.

Crypto started out as a naive attempt at money without government. But this was quickly shown to be an open invitation to rampant fraud that is still ongoing and technology alone can not prevent.

So now in a last ditch effort at survival, crypto is begging for a government lifeline with oversight and regulation.

I said all along that the only thing government needed to do to kill crypto was absolutely nothing --- just give it some space to self implode.

This has largely come to pass. Only one final realization remains ---- if regulation is needed, crypto is not. It no longer will have any compelling *legal* reason to exist

I don't think Coinbases' interests align with the interests of the people using crypto in this article.

> First, self-custodial wallets allow customers to store their own crypto in a way where they don't have to trust anyone else.

But the "multi-party computation and social recovery" is exactly "having to trust someone else".

> First, self-custodial wallets allow customers to store their own crypto in a way where they don't have to trust anyone else. Technology improvements, like multi-party computation and social recovery, will make it easy for anyone to safely store their own crypto without needing to trust third parties.

I wonder if their tune would change once centralized exchanges would become influential again.

Can someone explain to me how code that processes my private information, in some “Bob’s 40K Basement Mining” node is protected and secured? Whether it be a smart contract or these new “use GPU VMs at fraction of cloud costs- through this token market”

“Because Bob risks a large stake if reputation is tampered” doesn’t cut it.

What’s the tech here, genuinely.

* first, we've seen resistance from BOTH sides to sensible proposals in the past. Some because they thing Crypto should be totally unregulated (purists) and others because they want crypto shut down completely and any reasonable (even enabling) regulation makes that less likely

* second, there are still some core issues here. For instance, a major up side of crypto is the ability to evade regulation like sanctions. On a case by case basis this is sometimes good (helping Venezuelans access desperately needed international help) or bad (helping corruption or ransomware). This line:

>Establish a blacklist capability to meet sanctions requirements

hides within it a very large technical and social problem depending on exactly how it is implemented. And should that be different between stable coins (where the requirement is listed) and other coins?

Regulations and centralisation!

How ironic, so a crypto exchange wishes the U.S. government, an immensely powerful centralized entity crypto was designed to omit, makes everyone else play nice on the global stage. How would the US do that? Hmm… guessing regulating flow of dollars.

Ha!

crypto will live on. but the "industry" of money people parasitising on it will inevitably die. and that's a good thing

Money is just a piece of the social contract generalizing specific work into tokens of value. It allows a specialized worker to transact with another specialized worker such that we all have our needs met. It is a mechanism of decentralized organization enabling deep specialization absent needed to trust of even know someone else. You can see the production of someone, and transfer value to them without them needing to trust them personally.

You could say finance is the backbone of modern technological society. It is implicitly pseudo-democratic, in that where it flows, resource allocation power is afforded, which results in production of resources based upon the usage of whoever wields resource allocation.

If you analyze systems from this lens, look at the production of money itself. What work is being distilled into generalized value with money systems? What is the minting processes relationship with governance and democratic institutions?

There is a theme here. Money is directly coupled with governance. That coupling comes in the form of resource allocation, and it comes with an assumption of government control — where government is entrusted with the interests of public good. Hence, taxation comes into play, and a treasury, and tax collectors, and penalties, and policing, and military — the full faith and confidence of the people.

With something so tightly coupled to democracy, would a free and democratic people not want their money system to also be free, open, and democratic? Yet before the invention of Bitcoin, it has been anything but that — and if you can’t see that, you have some reading to do.

Long story short: bitcoin is part of a bigger picture. It is the backbone of government. Of a new form of government. Of a government bound in the laws of physics, codified as subservient to the governed. Of a government true to the cause of freedom. Of a government mathematically and verifiably auditable, in which no man can corrupt the fundamental rules of governing, in which every human has a voice, in which the evils of the world have no recourse nor cracks to hide in.

Imagine that for a moment. What that means for all of us. Imagine taxation as an automated component of crypto, for instance. No more taxation by force, no more complex paperwork, no more statistical enforcement, all of that process and ruling by fear — ALL of it — gone.

There are countless additional ripples here, but I will leave you with some food for thought on the possibility and dire necessity of this:

- houses are no longer affordable to most people who do not own one. This means that family and community is no longer possible for most people. Many of you here enjoy this. What would you so if you lost your house and had to care for your family in a cramped, crime-laden apartment?

- food is increasingly not affordable. What happens when people can no longer eat? How stable is that?

- medical care is not affordable for anyone, without perpetual servitude, and often times the insurance is a joke coming with it

- transport is out of reach for most people. This means you have no mobility to change your physical circumstances

- police are out of control. Their union is too powerful and their primary interest is securing property rights.

- tax payer funds are stuck in a transfer of wealth from the poor and middle class to the mega rich. Look at the military industrial complex, the medical complex, and all the other complexes across industries.

- the politicians are bought and paid for. You think any of those people have power? How effective have any of their policies been on solving these basic and ancient problems?

- the climate is killing life as we know it on this planet, and while society is increasingly aware of this and want it to be fixed, policy makers and corporations are barely changing. Who really controls everything if not the people?

I could go on all day, but the summation is: the current system is tyrannous and oppressive to most. It is faceless and has no central target to blame. The people are left in darkness, condemned to having no present, no future, reduced to a fragment of themselves, consumed in servitude of a faceless shadow. We have a resource allocation problem. A big one. Bitcoin was stage one of the cure to this problem. It has done something most people thought was impossible before it: it made the minting process accessible to anyone, and liberated the opaque financial system into the hands of the people, turning a shadow system into a beacon of light. It gave humanity its collective spine.

What comes next? It is inevitable what comes next. And it is unstoppable. Our current society is having trouble feeding its people, housing its people, healing its people — these are the most basic upon basic needs, in a world of automation and light speed communications, we can barely manage even the basics. It isn’t just sad, it isn’t just pathetic — it is negligent, it is malicious, and it is not necessary. When government in the information age, an age of mastery of atoms, of space, of light, of matter, how is it possible society CANNOT HOUSE AND FEED THEIR PEOPLE.

It makes my blood boil. But I keep it in. I keep it calm. I imagine the suffering of billions and feel their pain. It is paralyzing. But cool heads prevail. We all must carry on and not let the flames of rage consume us. If you don’t see or understand the connection to bitcoin, I just don’t know what to tell you. Maybe, in your relative luxury, you don’t see the reality of the suffering your fellow man is enduring. And so maybe, you haven’t had cause to investigate the root causes. If you did, you would inevitably be lead to the mode of thinking I carry.

I don’t want to spoil the next steps, you all know it already, you feel it in your hearts, but here’s a raging clue for you to chew on:

> WHEN in the Course of human Events, it becomes necessary for one People to dissolve the Political Bands which have connected them with another, and to assume among the Powers of the Earth, the separate and equal Station to which the Laws of Nature and of Nature’s God entitle them, a decent Respect to the Opinions of Mankind requires that they should declare the causes which impel them to the Separation.

> We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness—-That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient Causes; and accordingly all Experience hath shewn, that Mankind are more disposed to suffer, while Evils are sufferable, than to right themselves by abolishing the Forms to which they are accustomed. But when a long Train of Abuses and Usurpations, pursuing invariably the same Object, evinces a Design to reduce them under absolute Despotism, it is their Right, it is their Duty, to throw off such Government, and to provide new Guards for their future Security.