A new awareness is rising. Ethereum may become a base protocol of global vital importance, for much of the world’s commerce might run through it, many national currencies may move through its tubes.
By next decade, it may well be the case all household brands have their own private blockchains that connect to the public ethereum blockchain, with things such as energy grids and other vital national infrastructure potentially running on eth.
That means ethereum, specifically, may become a protocol of national interest for all countries, just as today’s internet, which would probably grind to a halt any developed nation if it suddenly went down.
This future is foreseeable and likely because while some do not see the advantages, almost all coders do, as ethereum turns static money into dynamic code, just as the internet turned static paper into dynamic webpages.
That means its effects may be greater than even the internet, perhaps at the scale of the invention of electricity, or airplanes, for ethereum allows us to extend our thinking and gives machines the ability to act economically.
The Modern Luddites
That is scary to some, and just as with most previous inventions, today we have our own Luddites. Ironically, the loudest of them come from this very space, the Bitcoin Core supporters, who after stalling bitcoin’s protocol for years are now very annoyed ethereum is racing ahead.
They can’t believe others are of the view that it is utterly stupid to think the invention of cars is good only as a horse carriage, instead of replacing the horse and the carriage completely.
That is, they can’t believe everyone sees how idiotic it is to just put a centralized layer on top of bitcoin that basically operates no different than the current financial system while at the same time the money remains static.
Nor can they believe the market is ditching their idiocity and backing today’s Tesla, today’s Steve Jobs, today’s perhaps Einstein, who was able to see the full potential of this invention, and instead of adding a car to a horse has created a flying car through ethereum’s smart contracts and a roadmap for unlimited on-chain scalability.
Moreover, they must be fuming at the fact that it is Buterin who gets to meet highest level officials, so these idiots, who never managed to achieve anything in their three decades until two complete outsiders came, Nakamoto and Buterin, are now calling for the imprisonment of the latter.
It is comedy at its finest, and sweet it is too. For they turned a peaceful bitcoin community into a civil war for no reason whatever, and now they pitch their protest tents in front of luxurious peaceful resorts where the best left to build the future, complaining at them for actually doing things, and building projects, being all innovative and even meeting Presidents.
They boast of having studied this space for three decades, of Hashcash and even of coining the term smart contracts, yet in nearly a decade since bitcoin’s invention, they have contributed as good as nothing to bitcoin.
Name one non-geeky and non-irrelevant thing they have contributed, you know, something that visibly improves bitcoin for end users.
Luddites. Who have the temerity to ask the SEC’s involvement when they spent eight years provoking governments through confrontational rhetoric and even publicly boast the only use of bitcoin is “dark markets.”
They are so brain-dead, they can not see how regulators might wish to come down on them, rather than the alliance backed public blockchain, especially if they start provoking others to put forward the case for just why they should do so.
As for regulators, including the SEC and others, the above clearly shows Ethereum is very different from bitcoin on a social level. It does not come in confrontation, but in collaboration. It does not seek to replace, but to improve. It does not seek social revolution, but an industrial revolution.
Those building Ethereum are not teenagers of no achievement or background who think it is cool to talk tough against those that can lock them up, or call themselves CEOs while they spend their day trolling.
Instead, they are former Google employees, or child prodigies, or graduates from prestigious universities, the best of a generation.
They do not aim to subvert laws that are mostly there for good reason. Instead, they are trying to build innovative projects through new methods that have now become available because of ethereum which may allow for new business models that may disrupt many industries.
Some, of course, may try and cheat. Us journalists do have a duty to warn whenever we become aware of any cheating instance, but it would assist if this space has a non-governing body which vets ICOs on a voluntary basis, with the presumption being that whoever does not want to voluntarily be scrutinized by the non-governing body is probably somehow shady and therefore investors should avoid.
The SEC could fund that non-governing body, with respectable members of eth sitting on its board, thus facilitating the greatest level of innovation while protecting against fraud or deception.
Or, the SEC could just completely stay out, or provide non-biding guidance on best practices if they are able to since many of these things are fairly difficult to balance at this very early stage, such as how to make ICOs more inclusive.
The third option would be for the SEC to bring up its old laws and apply them to a very new world. That would be foolish. American regulators have been testing this space for quite some time now. Another debacle and we’ll have to try our luck with other regulators, sending the American ones potentially to conceptual irrelevance as far as this space is concerned.
Because the bitlicense shambles is nothing compared to the backlash regulators may receive if they misstep in the eth space, not least because the ethereum space has the endorsement of many household brands and the ICO model is being tested by some even in Silicon Valley.
To Ethereum, Running is a Victory
Run Fast. Break Things. Let Them Catch-Up. It has worked both in Silicon Valley, and in China where companies like Tencent, Alibaba and others did not sit down to ask for permission, but went on a marathon to get mass adoption.
Likewise, eth innovators need not ask, as long as they behave themselves, but run fast instead. Get users, get projects out. Show to everyone why this is in any way beneficial or useful.
That’s the opposite of the suggestion by some that ICOs should be legalized or regulated, which implies ICOs are illegal.
In the land of the free, everything is legal except for what is explicitly prohibited, which means ICOs are legal by default unless some law prohibits them.
Such law would require either a Supreme Court case or legislation by Congress, because previous laws do not quite fit as ICOs are a new invention that hasn’t existed before.
It does have similarities with IPOs, stocks, commodities, currencies, actual tokens, crowdfunding, VC funding, and so on. Yet it is different to any of them because ICO tokens have not previously existed.
Therefore, to apply previous laws requires an updating of them. To update them requires a figuring out of just exactly what is happening, how exactly it’s happening, how should it happen, what are best practices, and so on.
And if we, observing this space daily, have not quite figured out such things, it is very doubtful some law graduate who probably doesn’t know what smart contracts are, let alone DAOs or tokens built on top, can come up with best practices that preserve innovation while detracting fraud.
That means, unless any clearly illegal activity is occurring, we should assume all eth based practices are legal until congress figures out how to approach this space, something which will require public debate and perhaps even ironing of some constitutional issues regarding States’s jurisdiction.
That would require time, so it may well be the case that FCA leads in providing guidelines which SEC would probably have to follow as presumably FCA’s guidelines would be very reasonable.
Or, perhaps, Switzerland sees an opportunity to expand its Crypto-Valley and publishes some guidelines – in English – on how they would approach ICOs.
Whichever way, considering all these competing jurisdictions, it would be prudent for decisions regarding this space to be made at a level of elected officials, rather than appointed bureaucrats, because such decisions may have consequences for decades, both in strategic positioning and innovative entrepreneurship.