ARTICLE 19 has issued a warning about the promotion of blockchain technology as a solution to censorship. In a report published today, the freedom of expression organisation identifies some of the risks that arise from the use of blockchain technology. It also identifies steps that states, public organisations and tech companies should take to ensure that human rights are protected when this technology is used.
Areas of law covered include:
1 Government attitude and definition
2 Virtual currency regulation
3 Sales regulation
5 Money transmission laws and anti-money laundering requirements
6 Promotion and testing
7 Ownership and licensing requirements
9 Border restrictions and declaration
10 Reporting requirements
11 Estate planning and testamentary succession
The GLI to: Blockchain & Cryptocurrency Regulation 2019 covers government attitude and definition, cryptocurrency regulation, sales regulation, taxation, money transmission laws and anti-money laundering requirements, promotion and testing, ownership and licensing requirements, mining, border restrictions and more
This article presents the top ten obstacles towards the adoption of distributed ledgers, ranging from identifying the right ledger to use for the right use case to developing scalable consensus protocols that provide some meaningful notion of public verifiability.
What is a DAO? Here, we take as an (imperfect) definition something simple: “a censorship-resistant means to coordinate the deployment of shared resources towards a shared objective”. The simplest DAO, by this definition, would be a multi-sig wallet, in which individual members can withdraw paltry sums and many members together can withdraw significant sums.While a multi-sig may be sufficient for a group of friends on a backpacking trip, it quickly becomes apparent that for more ambitious objectives requiring the coordination of more resources, additional mechanisms are necessary. How permeable should the boundaries of the organization be? How much influence should any individual have? How can individuals be protected from the bad behavior of others? How easy or difficult is it to participate?For a certain type of person, these questions are irresistible, and it no surprise that many significant projects have emerged in recent years seeking to answer these questions. People frequently ask about the ways in which these projects are similar and different from each other; this essay is a step towards an answer.This commentary is based on my familiarity with these projects and their technical documentation, much of which I have read, as well as conversations with teammates from the various projects.
Source: Aragon, DAOstack, Colony, Moloch
At TILTing 2019 the Lab presented a study on the legal instruments that are, as of today, applicable to blockchain-based digital assets under European law, and the relative enforcement challenges. The broader question to be tackled is whether and how regulators deal with such challenges, and what are the interests at stake. http://ipkitten.blogspot.com/2019/05/tilting-perspectives-2019-report-2.html
Generally, unintended consequences of laws, discouraging entire categories of activity when one wanted to only surgically forbid a few specific things, are considered to be a bad thing. Here though, I would argue that the forced shift in developers’ mindsets, from “I want to control more things just in case” to “I want to control fewer things just in case”, also has many positive consequences. Voluntarily giving up control, and voluntarily taking steps to deprive oneself of the ability to do mischief, does not come naturally to many people, and while ideologically-driven decentralization-maximizing projects exist today, it’s not at all obvious at first glance that such services will continue to dominate as the industry mainstreams. What this trend in regulation does, however, is that it gives a big nudge in favor of those applications that are willing to take the centralization-minimizing, user-sovereignty-maximizing “can’t be evil” route.Hence, even though these regulatory changes are arguably not pro-freedom, at least if one is concerned with the freedom of application developers, and the transformation of the internet into a subject of political focus is bound to have many negative knock-on effects, the particular trend of control becoming a liability is in a strange way even more pro-cypherpunk (even if not intentionally!) than policies of maximizing total freedom for application developers would have been. Though the present-day regulatory landscape is very far from an optimal one from the point of view of almost anyone’s preferences, it has unintentionally dealt the movement for minimizing unneeded centralization and maximizing users’ control of their own assets, private keys and data a surprisingly strong hand to execute on its vision. And it would be highly beneficial to the movement to take advantage of it.
Source: Control as Liability
“If you bribe 51 percent of the miners, they will change the ledger for you. [This] tells you just how little irreversibility there is in PoW coins,” tweeted Cornell University professor and researcher in blockchain consensus protocols Emin Gün Sirer.A 51% attack on the blockchain network is not a new attack vector for PoW blockchains. However, as highlighted by Gün Sirer, it’s also not really an attack vector. On very special instances, the majority of self-interested miners on PoW blockchains have voluntarily agreed to alter a transaction history to undo critical situations.While the situation isn’t entirely the same, in the past, blockchain networks have seen their histories altered in the wake of critical moments. This happened on the ethereum blockchain back in 2016 when over $60 million worth of coins were siphoned off from the now-defunct smart contract The DAO. It also happened on the vericoin blockchain back in 2014 after $8 million worth of coins were hacked.While controversial, both decisions were supported by the primary developer community who launched system-wide upgrades or hard forks to enable otherwise infeasible amendments to the blockchain transaction history.Yet those choices weren’t without their repercussions; the resulting ethereum fork resulted in two distinct chains, ethereum and ethereum classic, respectively.A resounding noStill, many in the bitcoin community took to social media to deride the idea as both infeasible as well against the philosophical underpinnings of the technology.In Binance’s particular case, prominent members of the bitcoin community point out that bitcoin being the world’s largest blockchain is a particularly unique case with a reputation to uphold.“Talk of forking or reorganizing the blockchain is close to heresy,” tweeted billionaire bitcoin investor Michael Novogratz. “When the ethereum community did it the project was like 5 months old. A baby. Bitcoin now has $100bn market cap and is a legitimate store of wealth.”It would also be unfair according to Adam Back – CEO of bitcoin development startup Blockstream – given that the latest Binance hack is nowhere near as severe as previous hacks suffered on the bitcoin blockchain.“A Bitcoin reorg is just not happening, and I doubt any Bitcoin industry, miners nor developers considered it either. Recall 2014 $473mil, 2016 bitfinex hack $72mil, 2019 binance $40mil etc. #NotHappening,” tweeted Back.
These days, it’s not a shared drill that’s redefining trust and supplanting institutional intermediaries; it’s the blockchain. Botsman now says that the blockchain is the next step in shifting trust from institutions to strangers. “Even though most people barely know what the blockchain is, a decade or so from now, it will be like the internet,” she writes. “We’ll wonder how society ever functioned without it.”
The ambitious promises all sound very familiar.