Ethereum Ecosystem and the Pitch for Regulatory Authorities

cybertreibercybertreiber Vienna, AustriaMember Posts: 29 ✭✭
No doubt, to transition from a society governed by legacy institutions to a society augmented by global DAOs it is helpful to leverage those existing institutions. Be it contract enforcement, closing the gap between corporate governance and virtually governed organizations, liquidation in case of bankruptcy or the recognition of smart property being rightfully accounted for on the asset side of your books. Arguably, in a utopian scenario, governments itself will be disintermediated but for the time being, creating a win/win situation and paving the way for a collaborative transition will benefit the growth of the ecosystem more than confrontation.
I think Ethereum itself will advance the state of affairs quite substantially if they succeed being incorporated as a hybrid (in Switzerland afair). Furthermore, the whole cause is epitomized by the work of Digital Common Law Institute.

My intention is practically that of an advocate for Ethereum enabled business. Hence suppose you can pitch the idea to the minister of finance / business of the nation of your choice. What exactly would they need to know to jump on the bandwagon? Just lately, we saw England ascribing BTC a more clearly defined status and given many nation's distress and dire need for innovation should provide the room for convincing arguments.
Much like a business case, I want to clarify what the respective government cases are. Why should a government adopt new regulation and what does it need to implement.

I'll start of with two basic propositions:

1) Be a hub for issuing credible identification documents on the blockchain:

As can be seen by several scandals hitting the largely anonymous world of crypto-enabled business around the world, there is a need for personality based reputation and hence identification. Notwithstanding the fact that contract enforcement, in the end, needs accountability on a personal level.
The nation of focus can use its existing proof of identity services and issue it on the the blockchain, thereby garnering administration fees and moreover, much respect from the international community to be on the frontier of making the internet a lawful and prosperous place.

2) Host the next Wall Street:

With lower barriers of entry, higher transparency and almost instantaneous global reach, financial markets implemented on Ethereum and the like pose significant advantages over current regimes. If a government chooses to acknowledge liabilities and equity contracts based on Ethereum contracts, it will attract major players and innovative startups to flock into this regulatory framework and attributing to GDP figures.

I appreciate any amendments and more propositions. Lets kickstart the virtuos cycle of government adoption.

Comments

  • GeorgSGeorgS Zurich, SwitzerlandMember Posts: 2
    Hi Alex,

    I fully agree that early government involvement would benefit the project in many ways. The focus should be on advertising the technological platform that Ethereum and crypto ledgers in general have to offer, and not so much on the currency aspect of it, which seems to be the source of much of the skepticism people bring forward.

    Myself living in Switzerland, I'm interested in what the team is trying to setup here. Can you elaborate on "if they succeed being incorporated as a hybrid"? Also, where is the team trying to set up shop?

    There's a parliamentary group called ParlDigi (http://www.digitale-nachhaltigkeit.ch/) that is driving digital innovation and sustainability in the political bodies here. For example, they've previously issued a motion ("Postulat") to the Bundesrat to clarify legal status of digital currencies and Bitcoin in particular (german/french only: http://www.digitale-nachhaltigkeit.ch/2013/12/bitcoin/). I believe they could be the right partner in getting this on the political agenda. I haven't established any direct contacts with them but I'm happy to get involved if there's need.

    Best regards, Georg
  • ranfordranford Member Posts: 25 ✭✭
    I think you are right and that this is very important, Ethereum needs to make a real effort to engage the current institutions/authorities so that it brings them on board to a well managed transition to the world it represents. I think your suggestions are very sound.

    I might also add that in setting up as a hybrid and in issuing stakes in its IPO maybe consideration should be given to ensuring as many of the appropriate old world operators are included as stakeholders (overall small but symbolic) and a way to begin dialogue and their learning, at minimum we will get a clear picture of who rejects ethereum entirely when we see their response to a gifted stake in the project.

    If I were to take this further and we really do believe that Ethereum is that important, then why not ensure that every man woman and child is given a stake in its future (they could be in trust for a good few years to ensure they cant sell until the real importance of ethereum is much more apparent).
  • SatCaSatCa Member Posts: 29
    I feel before we set this table of talks we must ensure everyone is informed.
    Please understand we need to share our wealth judiciously. We should empower everyone equally.

    The internet is not the real world, but it is the voice of the real world. Let's not let anyone monopolize on it.
  • ranfordranford Member Posts: 25 ✭✭
    couldnt agree with you more SatCa, BTW another discussion on the forum under "basic income" where there are 2 tokens, one giving every citizen a non transferable stake, a second token for issued monthly income actually addressed my last point and reduces the need for a "trust"period.
  • SatCaSatCa Member Posts: 29
    I agree everyone is slowly and steadily understanding all the problems such a currency needs to solve.

    I still believe nobody should decide on any direction without ensuring the best protocols are put in place...I'm running a social experiment.

    Plz help my prove without doubt what the best policy in terms of the regulatory protocol should be. Join in.
  • cybertreibercybertreiber Vienna, AustriaMember Posts: 29 ✭✭
    @SatCa? can you elaborate on which boundary conditions and behavioral models you are conducting your experiment?

    @GeorgS? Thanx for consolidating the relevant organizations who can drive adoption. As for me, I am based in Austria and given the right effort and fortune can see a possibility to wire such proposals. Currently I'm gathering strings from the local bitcoin-savvy community and we will see an according meetup group soon. On the other side of the spectrum there are certain NPOs. For one there is the 'initiative for freedom of the net' (https://netzfreiheit.org). Their purpose is to foster neutrality, freedom of information and to subdue growth of a surveillance state. I think this resonates with the NPOs mentioned and many more in this field and is a movement to build upon.
    Ironically, in an Ethereum embellished world the dilemma of surveillance vs. freedom is supposedly solvable through self regulation. Right now, state surveillance is driven by the need (not exclusively) to keep things under control, i.e. illicit behavior and malpractices at bay. In order to achieve that, the state needs to collect intelligence beforehand and perpetually in vast amounts. However, considering a decentralized economy where reputation needs to be communicated at a blink of an eye to make mutual beneficial contracts happen, it lies in the self-interest of the individual to disclose a fair share of her identity. Hence, allowing accountability for things that matter but without giving up anonymity where things don't matter. This is btw the same reason why governments are eager to eradicate cash and go all digital. Although a premature thought, I think it the whole privacy issue poses another unique selling preposition towards governments including a win/win outcome.

    Regarding the incorporation of Ethereum, it is clear that Vitalik and his team wants to showcase the foundation becoming a DAO. Unfortunately I can't dig up the source right now (a video conference Vitalik gave), but afair he briefly mentioned that amongst several countries, Switzerland offers the most favorable environment as of now. I would be more than happy though when a team member chimes in and updates us on the current status of this undertaking ( @vitalik? ?) .

    I think the goal needs to be a compiled statement covering all the vital benefits of elevating crypto contracts into legal and administrative frameworks. To appeal to the current institution it should address issues from all domains, economically and social. And I'm a true believer in egalitarianism as well. In fact, social mobility is and has been the key driver for human development ever since and we should aim for nothing less than a digital-born but real world Renaissance 2.0. So keep bringing in amendments and ideas.
  • SatCaSatCa Member Posts: 29
    @alex_guangtou: I can tell you the behavioral model on which the concept is based. It is the 'altruist V/s selfish' model.

    Rest is confidential, to maintain the integrity of the experiment.
    Please feel free to participate. I hope you do not judge my approach :)


  • giannidalertagiannidalerta Miami, FLMember Posts: 76 ✭✭✭
    @Alex_GuangTou? unfortuantely there will need to be an ID system built somehow. Somethings will not be able to moved over completely. For example.. how would you solve the age of an individual. How could the blockchain tech be used to prevent a minor from buying alcohol? as an example. Maybe a seperate blockchain, built on ehethereum, using a federated system of servers like OT, where you need physical "gate" keepers (people) to offer proof of age. Multiple proofs... the more proofs you have, the more trusted you become. Like going to a couple bars, where you show your ID and they can validate it, after you have gone to a couple your ID is now Proofed.
  • cybertreibercybertreiber Vienna, AustriaMember Posts: 29 ✭✭
    @giannidalerta? I would argue that it's not unfortunate but a part of human nature and that we shall recognize this in the systems built around human nature. Your description resonates with @vitalik 's assertion how a trusted ID community can grow organically, which in the end means dissolving or transcending current boundaries (http://forum.ethereum.org/discussion/comment/2422/#Comment_2422). Very nice showcase!
  • CamdocCamdoc Member Posts: 4
    I am appalled at your intention to have more regulation specifically for Ethereum. Why is the knee-jerk reaction from so many people to have MORE GOVERNMENT? Is not the purpose of Bitcoin and Ethereum to remove government from our financial and other decisions?

    There is a principle already present in law which will suffice for ALL legal questions coming from Ethereum. That is the question of personal damage. Damage to one's person or to his property. If someone damages you, then he is liable to pay you for your damages. That is all that is needed. And it already exists.
  • cybertreibercybertreiber Vienna, AustriaMember Posts: 29 ✭✭
    @Camdoc I understand your longings, though one has to be practical in execution.

    In the long-term it will happen like other major social shifts which occurred throughout history: the children born out of the contemporary regime will replace or (to put it in terms that appeal to the radical minds) eat their parents. During the industrial revolution, knowledge and information advantage shifted gradually from the monarchy to private initiative until it met a turning point where vested powers had to switch from coercion to cooperation. Nowadays we are confronted by a society where common sense politics is subdued by a financial regime competing with human rights and environmental degradation. I'm not an ecological fascist, but being surrounded by contaminated food and water is another story. With Ethereum there is the chance to replace this very financial regime and create a more wholesome system which integrates more dimensions of people's live than represented on todays accounting sheets.
    However, it won't function without tying in contemporary stakeholders. The experiment to live solely on BTC was nice and important, though not yet sustainable for the subjects of this experiment. BTC still derives its current value largely from being able to change into fiat.

    Your point with being liable is a very important one. In fact it's the staple of incentives to act with good intentions. Unfortunately it's not that easy to implement arbitration and settlement on the blockchain and be gone with it. The terminal point of resolution will always be physical and this is where you need prosecution. What if someone steals the private keys of your DAO? To whom would you turn if there your DAO is not recognized as such? What about the concept of defamation? If someone spreads FUD to ruin your existence it will be surely of help to leverage established law enforcement. However, it ain't gonna happen if you can't prove that your existence depends on value saved on a blockchain. Until we are fully immersed in a blockchain based society which handles all these aspect, you need fallbacks. Then what about taxation issues. A government unprepared of economic activity happening outside tax systems will fight back. Big time. A government which is prepared and on the bandwagon though, will endorse new activity in this domain and surpass others because it's more prosperous. Coincidentally this will also lay the foundation to their own dissolving and marginalization. As happened with British monarchy.

    I would love to have exactly that happening and the aforementioned aspects covered because in the end it means less government, not more. I think there is some common ground. So what is your suggestion on this?
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