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Honestly, I think the behaviour of the ethereum devs have led them to an inevitable head on fight with basically every large jurisdiction. You can't build a sys

Honestly, I think the behaviour of the ethereum devs have led them to an inevitable head on fight with basically every large jurisdiction. You can't build a system that is explicitly designed to process transactions from sanctioned countries and expect that the no one is going to step in. It would be one thing if the devs could answer the simple question of "Who, other than Iran and North Korea need this?", but literally that is the only problem they're solving. The best case scenario is that Ethereum is going to end up as a fragmented cluster fuck where the biggest entities are compliant with US and EU law whilst a small cohort of entities are still helping the North Koreans launder money, or Ethereum caves and the core of their PoS algorithms are changed. And it's not unlikely that along the road to them caving there will be prison sentences. The US government is not going to go "Ah, I see you've found a grey area, let us carefully consider this". It's going to go "Iran. Terrorism. Shut it down."

DennisP 4y ago
It's a global p2p network that anyone can join. It's not "explicitly designed to process transactions from sanctioned countries," any more than any other blockchain. It doesn't even have base-layer privacy like zcash or monero.
- SilverBirch 4y ago
  Their implementation of the Proof of Stake slashing is designed explicitly to prevent the type of censorship that is required to prevent transactions that breach sanctions.
  - DennisP 4y ago
    Slashing only occurs in response to certain specific rule violations. Censorship isn't one of those, and there's no way censorship could be one of those because the protocol doesn't know what's outside of it. To penalize censorship, you'd need to socially organize a hard fork that manually removes the stake of the censors. But you could do that with any proof-of-stake protocol. So then the question is whether the purpose of proof-of-stake in general is to enable social forks against censoring validators. But I think it's pretty clear that the primary purposes of proof-of-stake are to eliminate proof-of-work's absurd carbon impact and to provide more cost-effective security. Ethereum's particular PoS design also enables the scaling methods coming next in the roadmap. Another benefit is more regular block production, which is nice for UI. Meanwhile, PoW is not exactly prone to censorship either. If only 10% of the world's miners are willing to include a transaction, then it will just take 10X longer to get that transaction included. Any miner unwilling to build on blocks containing prohibited transactions is likely to pay an economic cost for that. Finally, it's not clear that sanctions law impacts block producers anyway. OFAC hasn't attempted to enforce sanctions that way, and at least according to Coinbase's chief legal officer, the law clearly doesn't apply to miners or stakers: https://twitter.com/iampaulgrewal/status/1566225955248427008 https://twitter.com/iampaulgrewal/status/1566225955248427008

DennisP 4y ago

It's a global p2p network that anyone can join. It's not "explicitly designed to process transactions from sanctioned countries," any more than any other blockchain. It doesn't even have base-layer privacy like zcash or monero.

SilverBirch 4y ago
Their implementation of the Proof of Stake slashing is designed explicitly to prevent the type of censorship that is required to prevent transactions that breach sanctions.
- DennisP 4y ago
  Slashing only occurs in response to certain specific rule violations. Censorship isn't one of those, and there's no way censorship could be one of those because the protocol doesn't know what's outside of it. To penalize censorship, you'd need to socially organize a hard fork that manually removes the stake of the censors. But you could do that with any proof-of-stake protocol. So then the question is whether the purpose of proof-of-stake in general is to enable social forks against censoring validators. But I think it's pretty clear that the primary purposes of proof-of-stake are to eliminate proof-of-work's absurd carbon impact and to provide more cost-effective security. Ethereum's particular PoS design also enables the scaling methods coming next in the roadmap. Another benefit is more regular block production, which is nice for UI. Meanwhile, PoW is not exactly prone to censorship either. If only 10% of the world's miners are willing to include a transaction, then it will just take 10X longer to get that transaction included. Any miner unwilling to build on blocks containing prohibited transactions is likely to pay an economic cost for that. Finally, it's not clear that sanctions law impacts block producers anyway. OFAC hasn't attempted to enforce sanctions that way, and at least according to Coinbase's chief legal officer, the law clearly doesn't apply to miners or stakers: https://twitter.com/iampaulgrewal/status/1566225955248427008 https://twitter.com/iampaulgrewal/status/1566225955248427008