How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission • Hacker News Board

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#81

Post by DennisP » Thu, Jun 10, 2021, 12:34 AM UTC

runbathtime wrote: post #71

DennisP wrote: post #44

Earlier quoted context omitted.

Nobody human or corporation has custody of tokens deposited to Uniswap. It has no admin keys, just an autonomous script running on chain. I guess you could try to go after the guy who wrote Uniswap's code but that has First Amendment issues according to US vs. Bernstein: > the Ninth Circuit Court of Appeals ruled that software source code was speech protected by the First Amendment and that the government's regulatio…

Did Uniswap3 write itself? Are there humans that wrote the code and deployed it? Why is Uniswap3 protected with copyright law and who does that protect? Why is there a company called Uniswap? Why were they funded? Does the protocol receive tokens (sole control) and can it send them? How would you define custody?

I addressed the question of going after the dev above, after the first paragraph.

My point on custody is that no human has the ability to do anything other than trade on uniswap as a regular user. You can trade one token for the other (in a given pair contract), and you can provide both tokens as liquidity and collect fees on the trades. The contract handles the rest according to its code, which is run by every Ethereum full node.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#82

Post by runbathtime » Thu, Jun 10, 2021, 1:33 AM UTC

nivertech wrote: post #76

I have much simpler explanation why miners should be regulated as Money Transmitters than the one described in the article. Thinking from the first principles: what PoW, if not an obfuscated way to buy tokens/coins? I.e. you exchange money for electricity, then electricity for compute power, then computer power for a right to play a lottery, then periodically you win tokens/coins. Money bag → High voltage sign → Pers…

I think you provided the right framework for thinking about this question. I would say that the miners are making bitcoin using raw materials, including electricity and computers, as inputs to a process. The miners are producing or issuing bitcoin, rather than buying it or finding it. Even if electricity is provided/given to a miner with the expectation of bitcoin in return, I believe they are working together in a common enterprise for profit, rather than the miner conducting money transmission.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#83

Post by runbathtime » Thu, Jun 10, 2021, 2:12 AM UTC

DennisP wrote: post #81

runbathtime wrote: post #71

Earlier quoted context omitted.

Did Uniswap3 write itself? Are there humans that wrote the code and deployed it? Why is Uniswap3 protected with copyright law and who does that protect? Why is there a company called Uniswap? Why were they funded? Does the protocol receive tokens (sole control) and can it send them? How would you define custody?

I addressed the question of going after the dev above, after the first paragraph. My point on custody is that no human has the ability to do anything other than trade on uniswap as a regular user. You can trade one token for the other (in a given pair contract), and you can provide both tokens as liquidity and collect fees on the trades. The contract handles the rest according to its code, which is run by every Ether…

I would say that the protocol code is conducting money transmission and leave the argument that some humans wrote it aside.

In the docs, Uniswap says they don't currently take a protocol fee, but might add it in the future. This fee would not go to liquidity providers, but to the smart contract itself. Who would receive the protocol fee I wonder, or would the smart contract itself keep the fees, never distributing it to any human.

I haven't even brought up the can of worms of governance tokens. The protocol seems to not need a protocol fee since they can make a fee by issuing themselves governance tokens that have some privileges with the protocol and have a price. It is interesting that you say the code is immutable, but the governance tokens claim to give its holder voting rights to make changes to the protocol code like changing fees. It is a major problem that investors of Uniswap the company received the uni governance token in proportion to the funding of the company which they tell us has nothing to do with the decentralized uniswap protocol. You can't have your cake and eat it too.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#84

Post by nivertech » Thu, Jun 10, 2021, 3:42 AM UTC

runbathtime wrote: post #82

nivertech wrote: post #76

I have much simpler explanation why miners should be regulated as Money Transmitters than the one described in the article. Thinking from the first principles: what PoW, if not an obfuscated way to buy tokens/coins? I.e. you exchange money for electricity, then electricity for compute power, then computer power for a right to play a lottery, then periodically you win tokens/coins. Money bag → High voltage sign → Pers…

I think you provided the right framework for thinking about this question. I would say that the miners are making bitcoin using raw materials, including electricity and computers, as inputs to a process. The miners are producing or issuing bitcoin, rather than buying it or finding it. Even if electricity is provided/given to a miner with the expectation of bitcoin in return, I believe they are working together in a c…

I would've agreed if their end goal was to build a non-financial entries on a ledger.

But in case of Bitcoin they're doing it with the expectation of trading these ledger entries (UTXOs) on the secondary markets.

That's what makes them money surrogates / money substitute.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#85

Post by bingbong70 » Thu, Jun 10, 2021, 4:17 AM UTC

eloff wrote: post #77

thecrash wrote: post #27

This is an interesting exercise in legal argumentation, but it assumes that the US Government wants to push miners out of the US. It's not that they can't, it's that they don't want to. Outlawing mining in the US would not disable cryptocurrency networks, because miners could still operate in other jurisdictions (and covertly in the US). It might cause a panic and disrupt some American-based crypto companies, but cry…

Only because they don't feel threatened by it. The uptick in high profile infrastructure ransomware attacks is the first penny to drop there. A second will one day be high inflation rates for the USD. I don't pretend to know when that happens, but history of fiat currency is clear that it will happen with certainty eventually. Bitcoin cannot succeed past a certain level because then it competes with the USD and becom…

>Bitcoin cannot succeed past a certain level because then it competes with the USD and becomes a threat.

It already is a threat to the USD and the game theory ensures anyone fighting against Bitcoin loses in the long run.

If the US wants to lose miners/nodes, large holders, and fintech innovation to other more free countries, they should take the view that you are sharing, but they will also lose the future in the process.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#86

Post by lowkey » Thu, Jun 10, 2021, 4:31 AM UTC

bko wrote: post #3

> All cryptocurrency assets, not just Bitcoin, are zero sum. So every dollar “made” in cryptocurrency was simply provided by someone else. Can't you say that about any other asset? If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. But that's not how we determine value. It's positive sum because the buyer attributes a value higher than he had paid for it, otherw…

My father had a rather clever way of explaining the bid-ask spread:

“Every time you have an exchange of goods and services between two parties, you have an agreement on price and a disagreement on value.”

i.e. Given an exchange between a seller and a buyer selling a widget for $100, the seller by definition values the $100 more than the widget while the buyer values the widget more than they value the $100.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#87

Post by runbathtime » Thu, Jun 10, 2021, 1:53 PM UTC

nivertech wrote: post #84

runbathtime wrote: post #82

Earlier quoted context omitted.

I think you provided the right framework for thinking about this question. I would say that the miners are making bitcoin using raw materials, including electricity and computers, as inputs to a process. The miners are producing or issuing bitcoin, rather than buying it or finding it. Even if electricity is provided/given to a miner with the expectation of bitcoin in return, I believe they are working together in a c…

I would've agreed if their end goal was to build a non-financial entries on a ledger. But in case of Bitcoin they're doing it with the expectation of trading these ledger entries (UTXOs) on the secondary markets. That's what makes them money surrogates / money substitute.

Zooming out a bit, I do agree that bitcoin is set up as a fiat money transfer system and that in order for the miners to keep making bitcoin they do need to sell it to people to make a profit, so I can't just narrow in on the production of bitcoin and ignore where profits come from. When the miners sell the bitcoin they make for dollars as a business, that is money transmission. Gold dealers are money transmitters because they sell gold (considered a currency equivalent) for dollars as a business. Gold mining companies invest to find gold as a company, when they sell the commodity for dollars for a profit I'm not sure if this is money transmission because gold is a real commodity that as consuming demand, bitcoin isn't a real commodity because it isn't 'used' so I don't think the bitcoin miners have the same benefit of selling bitcoin for dollars without being money transmitters. Bitcoin miners should be thought of as gold dealers, but also as a common enterprise issuing securities.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#88

Post by DennisP » Thu, Jun 10, 2021, 3:30 PM UTC

runbathtime wrote: post #83

DennisP wrote: post #81

Earlier quoted context omitted.

I addressed the question of going after the dev above, after the first paragraph. My point on custody is that no human has the ability to do anything other than trade on uniswap as a regular user. You can trade one token for the other (in a given pair contract), and you can provide both tokens as liquidity and collect fees on the trades. The contract handles the rest according to its code, which is run by every Ether…

I would say that the protocol code is conducting money transmission and leave the argument that some humans wrote it aside. In the docs, Uniswap says they don't currently take a protocol fee, but might add it in the future. This fee would not go to liquidity providers, but to the smart contract itself. Who would receive the protocol fee I wonder, or would the smart contract itself keep the fees, never distributing it…

Changing a number is not the same as changing code.

I haven't really kept up with V3 but earlier versions had no tokens or governance and were very successful. They're at least an existence proof that defi protocols can be completely autonomous.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#89

Post by haolez » Thu, Jun 10, 2021, 8:44 PM UTC

omegaworks wrote: post #80

988747 wrote: post #63

Earlier quoted context omitted.

> Laundering money in poor countries directly hurt the citizens of those countries because the government doesn't collect the taxes it is entitled to Minior nitpick: Poor countries typically have authoritarian, corrupt governments, so keeping money out of their hands is actually a good thing :) But more to the point: the whole idea of money laundering is that criminals WANT and DO pay taxes on their illegal income by…

>Poor countries typically have authoritarian, corrupt governments The western national media has been effective at propagandizing you toward this end. The "typical poor country is corrupt" trope is circulated widely and is used to discredit any attempt at wresting control over a country's fiscal future away from a cohort of wealthy western nations. Corruption in the west is normalized and simply labeled "lobbying." "…

I live in a poor country and the parent's comment is on spot, in my opinion.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#90

Post by runbathtime » Thu, Jun 10, 2021, 9:29 PM UTC

DennisP wrote: post #88

runbathtime wrote: post #83

Earlier quoted context omitted.

I would say that the protocol code is conducting money transmission and leave the argument that some humans wrote it aside. In the docs, Uniswap says they don't currently take a protocol fee, but might add it in the future. This fee would not go to liquidity providers, but to the smart contract itself. Who would receive the protocol fee I wonder, or would the smart contract itself keep the fees, never distributing it…

Changing a number is not the same as changing code. I haven't really kept up with V3 but earlier versions had no tokens or governance and were very successful. They're at least an existence proof that defi protocols can be completely autonomous.

How is changing a number not changing the code?

The autonomous claim that you have made more than once, whether true or not, does not change the fact that the smart contract is doing money transmission.