Jabanga

>Ultimately we are in dire need of regulation of these substances, especially where there is food contact.

We don't need regulation. We need consumer education (and in this gov funded programs can help) and entrepreneurship to provide the market with what it demands.

Mastering Ethereum is coming out Feb 2018

The Tweet I cited links to an article that goes into detail on this point. A third of babies born will not have their births registered.

>I need to at least mention that, well, this project is probably a bomb and you should be really careful with it. I, at least, wouldn't want to be the next DAO dev (e.g. project takes off quickly, unseen exploit exists, I lose some 10's of millions of other people's money) at mostly a personal (I'd feel guilty) and career trajectory level.

>The Parity multi-sig bug occurred in a solidity shop that was founded by the father of the language itself. It got past a serious audit and had the best eng process known (for solidity) enforced. The odds that your code -- currently unaudited correct? -- doesn't have an exploit are, while impossible to accurately calculate, quite remote.

I think this is very inaccurate. There have been devastating bugs in Ethereum, namely the bug in the DAO and the one in the Parity multisig contract. But there are numerous smart contracts that have not been found to be vulnerable. You cannot extrapolate what happened to two contracts to the entire ecosystem. It's inaccurate to claim that the probability that the loan contract he's working on will not have critical bugs once it's live is "remote", and a red herring to point out that it is unlikely to be bug free now, when it is still in development.

This would have all been avoided if MtGox had transferred its coins to a new wallet after the 2011 breach. I guess they assumed that any attacker that got access to the private keys would have immediately emptied the wallet, and the fact that this hadn't happened proved that the private keys hadn't been compromised by the breach.

I have to admit, that is a reasonable assumption. This may show the limits of the usefulness of heuristics, and the importance of organizations like exchanges, that have very significant fiduciary duties, to undertake a systematic process after a security breach to eliminate all possible remaining vulnerabilities, no matter how unlikely and counterintuitive.

Possibly Ethereum after it gets pre-compiled contracts for elliptic curve point addition and scalar multiplication in the Metropolis upgrade, which will enable zk-SNARKs. Among the many applications enabled by succinct zero-knowledge proofs of arbitrary computations are private transactions.

So you're suggesting that instead of Slock.it developing the smart contract, an LLC should have? How do the token buyers qualify as members of an LLC when they're anonymous buyers with no legal affiliation to a LLC? Or are you saying the LLC wouldn't be a traditional one with a legal identity and identification of its members?

I think the blind spot in your analysis is that you assume the rest of the financial industry is not like this. Cryptocurrencies are just doing rapidly what other stores of value did gradually over the course of centuries. Gold for example gets almost all of its value from speculative interest. This extends to some degree to the collector art and rare wine markets as well.

I also think you're failing to appreciate the benefit of having technologies that allow for a viable grey market. A third of people born today do not have government identification [1], and therefore cannot participate in the legal identity-based financial system. To increase their participation, the "crime" of unregulated commerce has to become more frequent in many countries.

In countries like Venezeula, cryptocurrencies are starting to play a role as a secure (by Venezuelan standards) safe haven for their wealth [2]. All of this activity is criminal according to the Venezuelan state, yet it is undoubtedly beneficial to Venezuelan society, in preventing corrupt state apparatuses from expropriating and squandering the meager private wealth of Venezuelans through hyper-inflation.

It also doesn't take much imagination to envision a future where tokenised finance on the blockchain helps millions of entrepreneurs around the world better access global capital markets. Speculation, which has created a token market worth billions [3], is just the first use-case enabled by this technology to conduct much more frictionless financial transactions. There will be more. I would also argue that this speculation, as chaotic as it is, is helping to bootstrap the industry, just as the dot com bubble did for the internet sector in the late 1990s.

So while I do think there is an enormous amount of hype in the cryptocurrency market, and that many will suffer losses from making bad investment decisions, I think this needs to be put in the context of the speculation underlying the value of major traditional assets, the promise the technology holds beyond speculation, and the capabilities it is already proving to have.

[1] https://twitter.com/NickSzabo4/status/544994985414639616

[2] https://www.bloomberg.com/news/articles/2017-06-15/venezuela...

[3] https://coinmarketcap.com/assets/

A couple examples: restricting them from soliciting investment without going through a $6 million compliance process for gaining approval to do an IPO. Restricting people from engaging in anonymous securities transactions with each other.

Everyone is not worse off. We have seen rapid innovation in the Bitcoin market, toward far better risk management and security practices, in the absence of regulatory restrictions. Some speculative claim that everyone is worse off if they're free doesn't justify robbing someone of their rights.

No, there are market mechanisms that address this as well. Government restrictions are not market mechanisms.

So it's the shareholders who are responsible for forming an LLC? How can they prevent non-members from becoming partners in the DAO, given the software is autonomous and has no permission controls?

>I gave one example of many of the ways in which we absolutely do restrict the rights of the entire population to engage in voluntary interactions to preempt crime.

Yes I can see how you interpreted my comment that way. I meant we should not do that. In writing it, I was thinking along the lines of "you don't do [some unethical thing]" as a normative statement, not a description of what you don't do. The wording I chose doesn't make that at all clear, so your interpretation is understandable.

>We limit the types of contracts that everyone can engage in, to prevent a subset of them that would be used abusively.

Like I said: A court will void contractual provisions like this, based on a comprehensive body of case law that establishes what constitutes consent. This is a universe away from what you're defending here, which is a federal agency prosecuting individuals because they entered into some investment transaction without 'permission' from said regulatory agency.

Case law defines each of those points. This elaborates more on that:

http://coinbase.com/legal/securities-law-framework.pdf

It's a decentralized and autonomous application. How could an autonomous application on the blockchain be an LLC?

>You realize that's not in the slightest bit true, don't you?

What isn't true?

>For example: Under contract law, there are certain rights that _you are legally not permitted to give away_. You can't actually sell yourself into slavery.

A court will void contractual provisions like this, based on a comprehensive body of case law that establishes what constitutes consent. This is a universe away from what you're defending here, which is a federal agency prosecuting individuals because they entered into some investment transaction without 'permission' from said regulatory agency.

The Howey Test defines an investment contract more narrowly than you imply. People lose absolutely staggering amounts of money each year on bad investments. Money is like water. It flows around these regulations. The detours just add friction that slows innovation, and diverts capital to fees for legal/accounting professionals.

It's not intellectually dishonest, because I'm commenting on the net effect. If people are getting scammed just as much, but from other sources, then "all they do" is the net effect on the negative side.

But fair enough: if you constrain this new internet sector, then you could conceivably reduce scams, just by virtue of forcing people into higher-friction areas of the economy, where less can practically be transacted. I'm sure Cuba has pretty low scam volumes by the same virtue.

>Having watched private companies spend much more than that to raise private capital, I think it's safe to say filing fees aren't the primary problem the public markets have.

Many private companies spend FAR less than that to raise private capital. To claim that a $6 million fee for entry is not going to disenfranchise a huge subset of the population is intellectually dishonest.

There are hundreds of projects that have held token sales. The vast majority have not imploded.

For what it's worth, I think the majority will fail to produce a profit. That's okay. A high failure rate is fine in an emerging industry. Venture capitalists can easily tolerate 90% failure rates for example.

>it turns out that having no rules on speculation is a bad idea.

Source?

>Maybe moral right, but that depends on highly subjective morals and might therefore still get you into legal trouble.

We're intelligent human beings. We should be able to arrive at some kind of consensus on what our moral rights our, through rational discourse. That's what I'm trying to do right now. My argument starts with what "the law" means:

https://www.theatlantic.com/politics/archive/2016/06/enforci...

People are going to make bad investments, no matter how much the SEC restricts. There are a huge number of non-securities investments available, and people pour huge amounts of money in them. A government is never going to be able to protect individuals from their own bad judgment.

All these regulations do is drive up the cost of directly accessing public capital markets (at last count, $6 million to do an IPO), and contribute to growing income disparity [1].

[1] https://www.brookings.edu/research/make-elites-compete-why-t...

You're not even representing my view accurately. My view is that scammers should be punished, not the entirety of the population on the premise of preempting crime.

Rejecting a person's argument on the grounds that it's "extreme [insert label]" that "everyone rejects" is not constructive.

That's not an externality. An honest business is not entitled to any customer's business. If the customer wants to squander their money away at the casino, leaving them with no money to spend at the honest business, they have that right. It's their money, and they are not obligated to spend it at the honest business.

And in any case, the market for lemons is a theoretical exercise. It does not actually happen in real markets, because there are various market mechanisms that emerge to address it.

People, left to their own devices, manage complexity effectively.

For example, most people don't understand how microprocessors work. But this is addressed through an effective and spontaneous process of delegating responsibility.

The government can play a positive role in helping manage this complexity, by providing certification programs, and freely available public information. What it should not do is constrain the actions of individuals, by mandating that a particular standard be used.

I don't believe all taxes are an infringement on freedom. A tax on natural resource consumption, and to a lesser extent, immovable property within a state's jurisdiction, can be morally justified in my opinion. I also don't have a problem with a head tax, conditioned on the punishment for noncompliance being exile, rather than imprisonment. A tax on private transactions is an infringement on liberty in my opinion.

On that note, it's interesting that the first 'War on Drugs' used taxes on private transactions as its avenue to prohibition. Since the government at the time didn't have the Constitutional authority (this is before the Supreme Court was utterly corrupted by politics) to outright ban drugs, what it did instead is require that all targeted drugs pay a stamp tax, and then simply refuse to issue the stamp. This shows the prohibitive nature of taxes on private transactions.

You do not have a right to speed on public property because others share ownership in it, and thus have a legitimate right to contribute to the rules that govern its use. If you owned your own private track, you would have such a right.

A case for mandatory vaccination can be made, as it addresses public health threats, which are negative externalities. Meat inspection cannot. You can choose to eat only government certified meat and not suffer any ill effects from non-certified meat being available on the market.

Just because you want products certified by a government body to be safe doesn't mean you have a right to force others to live according to your standards.

No one has a right to force you to support someone who made themselves destitute. You're using one infringement of personal autonomy to justify another.

>Your personal autonomy is restricted by the government, massively, period, generally for everyone's own good. They decide what and how much medicine you can put in your body. Whether you can gamble, and where, and on what, and how much. What drugs you can take. What speed you can drive. Whether you must go to school or not based on your age. Which food you can buy at the supermarket.

These restrictions violate people's basic rights and are to the material detriment of society at large. The more of a regulatory burden is placed on an industry, the more dysfunctional, bureaucratic and nepotistic it is.