Web3? I have my DAOts

A winery could assign a token to each physical bottle, and lets its customers freely buy (winery is involved) and then exchange their tokens based on the supposed bottle value ups and downs (winery is not involved any more). Then, from time to time, they come to the winery to take back a real bottle from a token.

Admittedly, there is little to program, but we can imagine all sorts of auctions, games (tokens becoming playable items in a virtual world, but still exchangeable for real bottles), etc., around those tokens.

Right, I understand that can appear to be tightening, but the IRS guidance is exactly the same since 2014, as are the penalties. They're now more actively alerting US taxpayers they need to pay taxes on their "virtual currencies." But the US taxpayer has always had that obligation, and the IRS is now starting to more visibly enforce it. They've been doing so less visibly as well. With so much more digital asset economic activity, there's that much more taxation, and that much more enforcement. The code is the same.

American crypto exchanges were actually reporting predating that announcement; they had to in order to not get shut down. Thoughtful people knew that certain regulation would have to be met from the beginning, but that memo wasn't universal and there's no one who goes door to door with the facts for hungry home speculators. There's likely to be a continual wave of retroactive enforcement for some time. That's why most sincere people in the space have been paying any required taxes generated by their activity starting for the year 2015 at the latest.

Incidentally, bitcoin hasn't been considered a security by the IRS yet, but the infrastructure bill that just passed has a whole sea change of new regulation for the space. I don't feel I've been informed well enough yet to comment much regarding macro implications. But there is something in there that could effect the latest buzzwords to go media viral: NFTs. Securities-related Know Your Counterparty and Anti-Money Laundering regulations that will be in effect starting in 2023 may apply to NFT sales, for any seller. That could have a real impact. You would need the EIN or social security number of your buyer.

We could call this tightening or a crackdown, but I think it also might be fair to call it reigning things in to prevailing standards. I don't really know. All this revolves around interesting questions about how the standards continue to be established for what constitutes a digital security vs digital property/currency.

As to the ICOs crackdown, it was nice to see regulators actually take real action on straightforward and often inept securities fraud. They were enabled by capability advances that weren't as feasible with bitcoin alone. They were old grifts cycled around again for a round of digital "innovation," so they were nipped in the bud pretty quickly. These kinds of fraud will probably spring up at every stage of the digital asset technology development cycle. The noise can be a bit maddening, and I can understand your general sentiment.

That's a valid statement. It creates a hyper-monetization of sorts. I struggle with it too, although less. I think there are other way to think about it. And feel free to accuse me of mental gymnastics. But I sort of came to blockchain for the espoused values associated with Ethereum, so I am projecting those perhaps.

There have been real-life experiments with local and community currencies, for example the Ithaca Hours and Boulder Bucks (and many others [1]). The point of them is to have something that accrues value and keeps it inside of a group, unlike the government issues currency which knows no bounds and can easily be extracted from a community. I see online (and local [2]) communities and DAOs that issue tokens and distribute them to a more restricted member group doing the equivalent of that. In effect you are not creating a parallel currency to the national one but creating a space where another means of representing value exists. For an example of a community with strong internal economics check out the builder collective 1hive [3]. What is actually happening here, I think, is not finance in traditional sense (although there is plenty of that, sure) but something that to me resembled anarcho-syndicalist utopias or restructuring of the capitalistic system around human relationships. In a world of a multitude of community currencies things like Uniswap's AMM provide interfaces between community microcosms.

Then there is another thing I think should be considered. Something like half of the population of the world has no access to banking. And then for the large portion of the ones who do the banking systems are terribly opaque and unstable. In Russia for example almost everybody holds their money in a single government-controlled bank because trust in the banking is super low. "Westerns", I feel, deeply under-appreciate the hardship shitty banking causes to people. (There are, btw, blockchains that specifically target the unbanked/underbanked populations that have limited access to financial instruments, and I do not mean in an exploitative way.) And even if you live in a place with a great financial system then plenty of people are restricted from harnessing it's potential. For example accredited investor laws might be seen as protective but they also prevent common folk from participating in all sorts of promising endeavors and getting a share of the wealth. So, yes, I am with you on that financialization is not all pretty, but at the moment it serves some people well and others very poorly or not at all and the latter group has much to gain from it.

[1] https://en.wikipedia.org/wiki/List_of_community_currencies_i...

[2] https://vitalik.ca/general/2021/10/31/cities.html

[3] https://1hive.org/

> For every winner, there has to be a loser.

Completely agree with this sentence. Now, have you happened to frame this sentence in your head when talking about fiat money? Just wondering.

I’d rather get paid in dollars than in JSON metadata and JPGs of apes.