I really feel for EtherDelta founder Zachary Coburn who was charged by the SEC for an unregulated exchange. This news infuriated me because it's daylight robbery by a government who use the threat of violence to extort $388,000 from an industry innovator.
And when you actually consider the facts of the robbery, the SEC has clearly overstepped its authority (as usual). Most of what they call a 'security token' are in fact 'utility tokens'. (Well, actually they are neither because most tokens haven't been officially defined yet.)
How can the SEC go after an exchange before they've even categorized the individual tokens being exchanged? The blanket categorization in the 2017 DAO report is unacceptable because it's ambiguous at best with words like, 'certain digital assets.'
The subject of security or utility token is a whole different kettle of fish and each centralized project will have to fight this battle eventually.
The reality is, the government has just bullied him for a huge sum of money because he didn't get their permission first based on their ambiguous report. It's criminal.
I know, I know it can be rationalised and justified in other ways but from Zachary Coburn's perspective, I'm sure this is exactly how it feels. And to be honest, I don't care how it's explained or justified in legal law, in my books that's wrong and it's anti-innovation.
This is the sort of behaviour we are bringing into the industry with regulation. We are opening the doors to the biggest extortion racket of untouchable criminals on the planet. For me, this highlights how much we need blockchains to achieve their full potential as soon as possible. Especially now that the SEC has said they will be targeting other unregulated exchanges because trust me, it won't end there.
Dear god, I really hate politics. It makes me so mad and it baffles me why people actually WANT the industry to be regulated by these criminals.
It's as if people don't realise we have the technology to make governments all over the world irrelevant and to truly liberate ourselves from their corrupt control system. We don't need their approval or acceptance and it's beyond insane to invite our violent prison wardens to the party.
Blockchain tech has the power to free us all in ways you wouldn't believe but it also has the power to enslave us even deeper into the global control system if we are not careful. Cooperating with Government will only bring about the latter because governments have no desire to loosen their ever-tightening grip around our necks.
Governments are not interested in the aspirations of the blockchain community. Governments only care about more power and more control, by ANY means. Government = violence.
Why do so many people want regulation?
I think the biggest problem we have today is the desire for short-term profits. This mindset makes the idea of regulation seem attractive with the institutional investors that will follow. It's also true that mass adoption will likely occur quicker in a regulated space. But at what cost?
The short-term gains you will make after regulation will pale in comparison to the potential gains you could make without and I'm not just talking about monetary gains either. Governments like to control the narrative, they want power and influence and once their foot is in the door, there's no turning back.
Regulation is another way of saying, 'policed'. Or rather, 'Policed For Profit'. Regulation stifles innovation and puts rules and roadblocks in the way. It removes opportunity from the poor and brings the threat of violence if you don't do what they say. It goes against the fundamental nature of this technology and its origins.
Do you really want the government to be a blockchain authority? This is what they will become and they will use this power to steal your money and remove more freedoms at every opportunity. Mark my words.
A regulated industry will undoubtedly give you nice returns (pre-tax) but an unregulated industry that achieves mass adoption will give us EVERYTHING. No more tax, No more censorship, Privacy will be restored... virtually every area of our lives could be changed for the better if we achieved mass adoption without regulation. But this will only happen when we stop thinking about these short-term gains.
I know its hard to think this way as we live in a greed-based world where everyone craves instant gratification, but these short-term gains brought on by regulation WILL be at the expense of your freedom. When you think about the bigger picture and the two diverging paths ahead, the route of regulation is effectively selling your soul. The deal with the devil always looks attractive short-term but as they say, the devil is in the detail. I honestly believe we have a duty to make blockchain technology achieve its full potential without the interfering oppressive arm of governments.
And before anyone says it, this isn't a conspiracy theory. You only have to look at how technology has been systematically used to remove our freedoms, control our speech, take away our privacy and hand government increasing levels of power over our lives. The escalation in the last 50 years is scary but the last 20 years is terrifying and do you really think their plans for blockchain tech is going to give you back these freedoms? Of course not. Given the chance, they will use it against us at every opportunity. You would have to be blind to deny this.
I'm an Anarchist at heart and I've spent many years of my life thinking of a world without governments and their illusion of control through coercive violence. A world where natural freedom isn't even thought about because they haven't had it taken away. A world where opportunity isn't thought about because everyone has an equal measure.
I know this is a fantasy and the world will never be perfect but I honestly believe, at the very least, blockchain technology has the power to seriously disrupt the oppressive ambitions of government and restore the freedoms we have lost in the last 50 years.
So how do we disrupt regulation and get the full potential out of blockchain technology?
That's easy. We only need a few things. Decentralization, anonymity and of course, the most important, non-compliance i.e don't police yourself i.e don't volunteer any data of your crypto assets or information outside of the decentralized network. One day your government will start issuing threats of violence to anyone who doesn't declare but so long as you protect your anonymity, they will be powerless to act.
When I say decentralization, I don't mean a distributed network alongside an organisation. In my opinion, there are no shades of grey. You are either decentralized or your not. It's not an evolving concept. Your either centralized or decentralized, there's no middle ground, no ambiguity here. This truth is massively important for decentralization to work. Think of it like a door that is either open or closed.
Also, a lot of people assume that the natural evolution of blockchains will gently phase out old ideas and the benefits of decentralization will just happen over time. If only it could be that simple. Decentralization = power to the people and a lot of powerful people including governments are not going to like it.
There will come a time when the establishment realises they are losing their power due to the growing amount of decentralization around the world and the idea will be attacked on all fronts. The media will spread their usual fear, lies and propaganda and governments will start to target developers and businesses that release open sourced decentralized projects like block.one.
Its hard to say how this will unfold but I have no doubt the establishment will declare war on decentralization at some point.
Hopefully, when this happens it will already be too late for them. But this is why the next piece of the puzzle is so important... your anonymity.
We need to stop filling out KYC requests. I've filled out a few in my time without thinking of the implications but I won't do it again. To achieve real, meaningful freedom we need a universal decentralized blockchain identity system with reputation tools built in that can't be linked to our physical identity.
KYC will be forced with the threat of violence under a regulated industry for obvious reasons but it goes against the future potential of blockchain tech. We will never achieve the levels of freedom that's possible if we don't embrace the power of anonymity.
We have an opportunity to reinvent ourselves in the digital space. You can be whoever you want to be in the digital world and build your reputation so that you are trusted. You really don't need your real-world identity and if we keep the two separate, it will be the start of something special. An anonymous system that gives us real-world privacy.
Crypto/blockchain anonymity is a choice we each need to make but don't be fooled into thinking you have nothing to hide because that time will come when the current establishment declares war on this idea. I don't know about you but I'd rather not put a target on my head.
Know the enemy is a fundamental aspect of Sun Tzu's Art of War and we actually have the ability to take this away from our enemy with anonymity. How powerful is that?
Finally, there seems to be this idea floating around that government regulation of the crypto industry will make it a safer place with less hacking and fewer scams. That is not true at all. While you may be somewhat protected if you invested in a fully compliant security token (if they allow you to buy one), beyond that, the crypto space will be the same. A regulated exchange does not make it safe nor anywhere near as safe as a decentralized exchange.
The internet is a regulated space and you would laugh if someone suggested that regulation makes it safer. It's a bare-faced lie that is used to make people want regulation. To invite the vampires inside.
Blockchain technology and cryptocurrency must be allowed to grow and become globally adopted without the oppressive hand of our current system for it to achieve its full potential. We don't need any level of approval or vindication from governments around the world and we need to stop celebrating this when it happens.
As a community of early adopters, we need to see the error of collaborating with the establishment. They are the enemy of this technology. Their motivation and vision is the polar opposite of the masses. We really can't allow them to influence how this technology grows.
Regulation will happen as the seed has already been planted so the real issue is our compliance. We need to hope that people see the power of decentralization and anonymity before the establishment uses the technology against us. Its a race for freedom with everything on the line where the winner takes all.
We still have a long way to go but the industry is moving fast.
My biggest concern is the number of authority figures in the industry who are openly collaborating with governments and pushing a pro-regulation message. Let's hope the masses have more sense.
Thank you for taking the time to read this. Please share your thoughts in the comments
