Sunday, March 06, 2022

The Purpose Of Crypto Regulation

The primary purpose of crypto regulation ought to be to make innovation and business possible. There are plenty of operations that call themselves crypto but are shady, deceptive, and outright fraudulent. It is for regulation to protect the true innovators from those that give the space a bad name. Weed out the bad guys.

There is great danger that Barnes And Noble might attempt to hobble Amazon because, in 1994, Barnes And Noble had gobbles of money, and Amazon had none, and Capitol Hill is pay as you go. In 2009 we saw Wall Street walk away with murder. The moneyed interests of the old might get in the way of the new. And their nefarious attempts might have the legitimacy of misguided regulation. The new innovators have to get into the political fight. They have to be part of the debate. They have to be in the arena. They have to show up on the Hill, and they have to show up in the court of public opinion.

The primary purpose of crypto regulation ought to be to make business possible.

There is a line of thought, and I subscribe to it, that America is a different kind of country. I am plenty critical of the US political system as it exists today, it is an imperfect union, but at the bottom of it I do believe America is an idea, this oldest modern democracy carries the unique responsibility of holding the torch in the far corners of the world. You could spend 700 billion dollars every year on guns and trillions on forevermore wars, you could spend hundreds of billions on diplomacy, or you could, at no direct cost to you, let crypto do the work of empowering individuals everywhere. The Blockchain is about empowering individuals everywhere, and this is much more fundamental than voting rights. The suggestion is that the individual right here in the US is not sufficiently empowered. The entrenched status quo will come by the way of regulations to stop the unstoppable work of empowerment. And that worries me.

It is said when they first started making movies, they would simply capture plays with movie cameras. It was some time before they realized the movie can be its own product. Blockchain native products and services can not be captured with regulations that were designed for the previous era unless the idea is to suffocate the innovation.

I think the best way to regulate will be to bring the cat to the table. The top 100 crypto companies around the world by market cap should form a consortium, perhaps to be called Blockchain100, that will each send a Chief Policy Officer to it, and together they will suggest laws and regualtions to national parliaments around the world, of course, to be debated by elected officials and the general public, but spearheaded by those in the know. Because ultimately it is about the consumers. The most successful crypto products, by definition, will be those that are effortlessly understood.

How do you solve identity? Most people on the planet lack identity that they can take to the bank. How do you solve credit history? The dollar a day people are the best at paying loans, but nobody gives them loans. How do you solve that? Sidewalk businesses around the world have no bookkeepers, and because they don't, they can't go to banks and get loans. How do you make it possible for their excellent businesses to easily get loans? The SEC is not even asking those questions. Crypto has the solutions. And so the SEC should know when to stay out of the way.

The Blockchain is a concrete promise that every single transaction can be completely traced. That is not a place where criminals can go to hide. That is a place where criminals will find it impossible to hide. But we don't want a surveillance regime. And so regulation will have to be able to do it just right. That is a challenge. Engineers are not lawmakers. We pay lawmakers fat money. They might as well rise up to the challenge. They should know when to lead, follow, or get out of the way. Or we should hire a new set.

The Blockchain will take democracy to every country. The SEC, the IRS, the CFTC, FinCEN, the OCC, and that entire alphabet soup does not even have it in their vocabulary to attempt something like that. The thing is, the Blockchain is unstoppable. Regulatory agencies don't want to be like the emperor who went to the banks of a flooding river and asked it to stop. He thought emperors are supposed to command, and the commands will be obeyed.





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Saturday, March 05, 2022

Coinbase Should Stay Put And Rescue Russia

Coinbase
Ukraine Is Putin's Brexit With Too Many Dead Bodies
March 4: Ukraine
Twitter: March 2: Ukraine
Kharkiv
Putin Wants To Do A Syria In Ukraine And Can Not Be Allowed
YouTube: February 28
The End Of The Road For Putin
February 28: Ukraine
Legitimate Russian Grievances
I Am No American Mouthpiece On Ukraine
YouTube: February 27
Human Warfare Is People Coming Out Into The Streets Of Moscow In Large Numbers
February 27: Ukraine
Madman Putin And The Nuclear Sword: The Putin Regime Must Collapse
February 26: Ukraine, Justice Jackson
Hybrid Warfare, Meet Human Warfare
The Endgame In Russia
Putin Is Saddam With The WMDs
News: February 22: Ukraine

Putin has gone all in. He has gone medieval. And the thought was wars have gone out of fashion in Europe.

Wars are tragic. Even just wars are tragic. There is damage to limbs, life, property.

I think Putin is going to lose. That is for sure. What is less certain is how soon that will happen. It could be painfully long.

Putin's move feels irrational. I think this is the end of the Putin regime. It has lasted over 20 years. That is long enough.

Ukraine was the mini Russia. There was corruption, but it was still a democracy. It was building a market economy. Singapore was the mini China. Deng Xiaoping had the humility to learn. Putin's hubris has beem to bomb.

The Soviet Communist Party vacated the scene. Now it is the KGB's turn to go.

I think the number is 500,000. If half a million Russians were to brave the streets of Moscow, Putin is over.

A democratic Russia should collaborate with the US to cut nuclear weapons by more than 90% by the end of the decade.

Russia is a major power. It will be a major power. But the currency for power these days is how your economy is doing. Russia naturally will have a sphere of influence; every large country does. But that influence respects the sovereignty of the small countries in the neighborhood. Trade, not war.

Putin is not fighting the US. Putin is fighting China. Putin wants China to think it is Russia that is the number two country. That has not been true for decades. It is now China that competes. And China competes primarily economically.

A debate has flared up. What should crypto companies do? Several arguments can be made both ways. But I think one big argument for staying put is that if ordinary Russians can upload their assets on to the blockchain, they can vote with their feet. Or even if they stay, as most will, the Russian rouble weakened will politically weaken Putin.

And there is also the aftermath. The post-Putin scenario also has to be worked out. The last time around the West did not do a good job of helping Russia transition. The price for that is being paid three decades later.

YouTube: February 19
New York Times: February 16: Hong Kong, Omicron, Trump, Bhutan
February 12: Russia, Ukraine, Lead
If Russia Invades Ukraine, Questions Arise Over Taiwan





Crypto Is Helping Both Sides in Ukraine Conflict, But It Won’t Wreck Russian Sanctions . Several days after the Russian invasion, Mykhailo Fedorov, vice prime minister of Ukraine and minister of digital transformation, called on people around the world to show solidarity with Ukraine by making crypto donations. ........ At the time of writing, donations have exceeded $50 million. ...... It shows individuals collectively having a state-like impact on the global stage. ....... This new way of accessing global private capital is a refreshingly welcome facet of cryptocurrencies. By going straight to the people of the world, Ukraine’s government has been able to raise finance quickly without the need for financial intermediaries. ......... They also have the potential to help Russians to evade the crashing rouble ........ One leading Twitter user, David Gokhshtein, replied that he is “definitely with Ukraine and for peace but we don’t do that in crypto.” .......... Changpeng Zhao, founder of leading exchange Binance, has said that it’s not the place of crypto exchanges to restrict Russian activities in general, though he emphasized that his exchange was not permitting any of the hundreds of wealthy Russian individuals on western sanctions lists to use its services. Even then, he said, it was impossible to stop them because there were so many other exchanges that they could use instead. ........ Russian demand for crypto may help to explain rising crypto prices early last week too. ....... Countries such as Iran have previously been accused of using bitcoin to bypass sanctions. Nonetheless, as the global community looks ever more fractured by ideology and past grievances, concerns about Russia are of a different order. .......... In my view, however, it is doubtful that crypto will save Russia from sanctions. Even apart from the huge task of establishing the necessary facilities within Russian banks, many of the people and institutions that would be receiving the crypto would need to set up wallets of their own. Besides that, daily transaction values in crypto only amount to a few billion dollars. This is a big number, but an order of magnitude less than the overall financial system. If Russia were to seriously start using crypto for payments, the market is not yet mature enough to cope. .......... thanks to the devaluation of the rouble, bitcoin has now eclipsed it in overall value.

It is now the 14th most valuable currency in the world, three places above the rouble.

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