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Blockchain is good for permission-less financial innovation including raising funds. It doesn't matter if the SEC considers a digital asset a security if everyt

Blockchain is good for permission-less financial innovation including raising funds. It doesn't matter if the SEC considers a digital asset a security if everything is offshore and the purchasers are offshore or anonymous. It is a financial network without regulation. Regulation can pierce areas of the network that interface with physical entities, just as regulators can regulate pieces of the internet they can control but lack capabilities around the darknet. This is what blockchain is - purely digital and open financial networks.

mochapot 7y ago
There is a group of people who assert that laws will not apply to them because technology obscures their identity. Those people are wrong. Blockchain is an append-only database. It does not create sovereign citizens.
- seibelj 7y ago
  The laws of sellers of digital assets based in Caribbean islands, and purchasers in locations such as Eastern Europe and Russia, do not necessarily agree with the laws of western nation like the USA. This has nothing to do with sovereign citizens.
- kyboren 7y ago
  > Blockchain is an append-only database. It does not create sovereign citizens. Telecommunications push bits over a wire or the ether. They do not create "cyber spaces". My point is: There are some interesting applications of these funny distributed systems that do lots of work to maintain an increasingly-consistent cryptographically-secured append-only shared state. Your statement is a bit too reductionist. Frankly I'm surprised to read this kind of thing on Hacker News. I suppose the days of zeal for revolutionary self-sovereignty are truly over: > Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather. > This is our world now... the world of the electron and the switch, the beauty of the baud.
  - wpietri 7y ago
    When I first read that, I too was inspired by it. But I don't think it aged well. Cyberspace ultimately isn't a space, any more than there was a "telephone-space" or a "telegraph-space" before that. Blind techno-utopianism is an understandable but erroneous reaction that keeps happening, and it generally ends up being ridiculous: https://www.amazon.com/Victorian-Internet-Remarkable-Nineteenth-line-ebook-dp-B07JW5WQSR/dp/B07JW5WQSR/ref=mt_kindle https://www.amazon.com/Victorian-Internet-Remarkable-Ninetee...
    - kyboren 7y ago
      > Cyberspace ultimately isn't a space, any more than there was a "telephone-space" or a "telegraph-space" before that. Cyberspace is not a physical space, indeed, but that's missing the forest for the trees. The Internet has enabled a totally new social paradigm for which 'cyber space' is an apt term. Do you disagree that a person's experience and patterns of use on Facebook is fundamentally different from someone whose only electronic means of communication is the telegraph? > Blind techno-utopianism is an understandable but erroneous reaction that keeps happening [...] Techno-utopianism is related to but distinct from to the traditional hacker rejection of the state as a valid authority over the Internet. I don't consider either _The Declaration of Independence of Cyberspace_ or _The Conscience of a Hacker_ "blind techno-utopianism". Idealistic, definitely. Heady with anticipation for the world-changing implications of the Internet and frustrated by political dinosaurs who don't get it, sure. Blind or techno-utopian, no, I don't think so. Your comments are dripping with disdain for the idea that cyberspace might be something fundamentally new and that people might imagine a new paradigm for governance that may be better suited to it. It is sad to see such cynical pessimism and lack of vision from someone who has the skills that might help to turn their vision into reality. You can use technology to make the world a better place. It's up to you to actually want to do it.
khuey 7y ago
If everything is offshore it's not subject to the SEC's jurisdiction in the first place. "Permission-less financial innovation" generally means "breaking federal securities law" because nearly all of these scheme ultimately choose to involve US persons at some point.
- wpietri 7y ago
  Exactly. And there's a clear effect here akin to adverse selection. Financial innovators on the up and up will just use the existing platforms. People who are up to no good and are hoping not to get arrested will have a strong incentive to use new platforms. That moves right on to the slippery slope: the new platforms get reputations for being the financial equivalent of bad neighborhoods, which means even less legitimate financial innovation. Eventually, nobody in their right mind will use the new platform, so it's down to criminals and fools.
wpietri 7y ago
I used to write software for financial traders, so I'm more familiar with financial markets and their history than most. It's my firm conclusion that consequence-free "financial innovation" is an absolutely terrible idea. Every major market started out with little or no regulation, and every one has ended up with quite a bit. This is true even of self-regulating entities, even of markets owned by traders. Why? Because there are tradeoffs between various market virtues. Openness to innovation is certainly one of them. But not having your money taken by scammers and criminals is another. One of the main things that makes modern financial markets work is trust. If I buy shares of a US-regulated stock, I have some confidence that it's not an out-and-out fraud. A great example of this is WeWork. The only reason they're not public now is that going public in the US requires a fair bit of tightly regulated disclosure. When the world finally got a proper look at their numbers, the scam unwound. That's obviously great for people who might have purchased the stock. But it's also great for every company who wants to issue stock to raise money. The more people trust that major-exchange stocks are real businesses, the more readily they'll put in their hard-won cash. That's good for everybody: investors, entrepreneurs, and the economy as a whole. As we've seen with Bitcoin, unrestricted "financial innovation" leads to a lot of incompetence (e.g., MtGox), market manipulation, and outright fraud. So I predict that none of these "permission-less" platforms will ever amount to much until they tackle the same regulatory problems that successful markets everywhere have been forced to tackle.

mochapot 7y ago

There is a group of people who assert that laws will not apply to them because technology obscures their identity. Those people are wrong. Blockchain is an append-only database. It does not create sovereign citizens.

seibelj 7y ago
The laws of sellers of digital assets based in Caribbean islands, and purchasers in locations such as Eastern Europe and Russia, do not necessarily agree with the laws of western nation like the USA. This has nothing to do with sovereign citizens.
kyboren 7y ago
> Blockchain is an append-only database. It does not create sovereign citizens. Telecommunications push bits over a wire or the ether. They do not create "cyber spaces". My point is: There are some interesting applications of these funny distributed systems that do lots of work to maintain an increasingly-consistent cryptographically-secured append-only shared state. Your statement is a bit too reductionist. Frankly I'm surprised to read this kind of thing on Hacker News. I suppose the days of zeal for revolutionary self-sovereignty are truly over: > Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather. > This is our world now... the world of the electron and the switch, the beauty of the baud.
- wpietri 7y ago
  When I first read that, I too was inspired by it. But I don't think it aged well. Cyberspace ultimately isn't a space, any more than there was a "telephone-space" or a "telegraph-space" before that. Blind techno-utopianism is an understandable but erroneous reaction that keeps happening, and it generally ends up being ridiculous: https://www.amazon.com/Victorian-Internet-Remarkable-Nineteenth-line-ebook-dp-B07JW5WQSR/dp/B07JW5WQSR/ref=mt_kindle https://www.amazon.com/Victorian-Internet-Remarkable-Ninetee...
  - kyboren 7y ago
    > Cyberspace ultimately isn't a space, any more than there was a "telephone-space" or a "telegraph-space" before that. Cyberspace is not a physical space, indeed, but that's missing the forest for the trees. The Internet has enabled a totally new social paradigm for which 'cyber space' is an apt term. Do you disagree that a person's experience and patterns of use on Facebook is fundamentally different from someone whose only electronic means of communication is the telegraph? > Blind techno-utopianism is an understandable but erroneous reaction that keeps happening [...] Techno-utopianism is related to but distinct from to the traditional hacker rejection of the state as a valid authority over the Internet. I don't consider either _The Declaration of Independence of Cyberspace_ or _The Conscience of a Hacker_ "blind techno-utopianism". Idealistic, definitely. Heady with anticipation for the world-changing implications of the Internet and frustrated by political dinosaurs who don't get it, sure. Blind or techno-utopian, no, I don't think so. Your comments are dripping with disdain for the idea that cyberspace might be something fundamentally new and that people might imagine a new paradigm for governance that may be better suited to it. It is sad to see such cynical pessimism and lack of vision from someone who has the skills that might help to turn their vision into reality. You can use technology to make the world a better place. It's up to you to actually want to do it.

khuey 7y ago

If everything is offshore it's not subject to the SEC's jurisdiction in the first place. "Permission-less financial innovation" generally means "breaking federal securities law" because nearly all of these scheme ultimately choose to involve US persons at some point.

wpietri 7y ago
Exactly. And there's a clear effect here akin to adverse selection. Financial innovators on the up and up will just use the existing platforms. People who are up to no good and are hoping not to get arrested will have a strong incentive to use new platforms. That moves right on to the slippery slope: the new platforms get reputations for being the financial equivalent of bad neighborhoods, which means even less legitimate financial innovation. Eventually, nobody in their right mind will use the new platform, so it's down to criminals and fools.

wpietri 7y ago

I used to write software for financial traders, so I'm more familiar with financial markets and their history than most. It's my firm conclusion that consequence-free "financial innovation" is an absolutely terrible idea. Every major market started out with little or no regulation, and every one has ended up with quite a bit. This is true even of self-regulating entities, even of markets owned by traders. Why? Because there are tradeoffs between various market virtues. Openness to innovation is certainly one of them. But not having your money taken by scammers and criminals is another. One of the main things that makes modern financial markets work is trust. If I buy shares of a US-regulated stock, I have some confidence that it's not an out-and-out fraud. A great example of this is WeWork. The only reason they're not public now is that going public in the US requires a fair bit of tightly regulated disclosure. When the world finally got a proper look at their numbers, the scam unwound. That's obviously great for people who might have purchased the stock. But it's also great for every company who wants to issue stock to raise money. The more people trust that major-exchange stocks are real businesses, the more readily they'll put in their hard-won cash. That's good for everybody: investors, entrepreneurs, and the economy as a whole. As we've seen with Bitcoin, unrestricted "financial innovation" leads to a lot of incompetence (e.g., MtGox), market manipulation, and outright fraud. So I predict that none of these "permission-less" platforms will ever amount to much until they tackle the same regulatory problems that successful markets everywhere have been forced to tackle.