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Crypto-fiat, legal mafia, FUD and the time for a change
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Author Topic: Crypto-fiat, legal mafia, FUD and the time for a change  (Read 747 times)

Najska

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Crypto-fiat, legal mafia, FUD and the time for a change
« on: January 15, 2015, 01:32:25 am »

Oppression, violence and blood have proved to be the grounding elements of the society for about 15 thousand years. Well, anyways, coming straight to the topic, without institutional support, no cryptocurrency can survive, and this happens only when legal mafias wish so.

Centralized exchanges play a key role in the advance of cryptocurrencies. Because even with the presence of institutional support, paying customers are needed for success. Exchanges provide the gateways needed for such involvement.

We live in a time of fear, uncertainty and doubt. Despite our marvelous asset exchange, people need an assurance from the legal mafia. ShortNXT, CoinoUSD and others exhibit an unprecedented exemplar of good will, but we need more than that.

Those who are backed by the legal mafia are hesitant to issue crypto-fiat assets on a decentralized exchange. I highly doubt if Coinomat will back its CoinoUSD with real dollars once it becomes an approved financial business. They could run a centralized exchange instead. Who doesn't want some extra money?

So, we have a two-phased course on us. First, a business model which does not depend on transaction fees should be aided by the will to cooperation. Second, the support of a legal mafia is to be sought.

Crypto-fiat assets are needed to mitigate the instability of cryptocurrencies at least in this present stage of development. With asset-to-asset trading made possible in the near future, not only should we expect a decisive rise in crypto-fiat denominated markets but also we should get ready to make and accept payments in crypto-fiat currencies.

I have a dream, and I call it Crypto Reserve. Keep following.
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kwilliams

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Re: Crypto-fiat, legal mafia, FUD and the time for a change
« Reply #1 on: January 15, 2015, 04:01:01 am »

I will create separate thread for this but basically crypto needs its own legal system. We need to be able to vote for judges, appoint notaries and jurors. Trials need to be held within the crypto system for resolving disputes. Enforcement will be automatic by the framework.

For example, one issues a crypto asset, promising to pay dividends. To boost credibility he can:
a) establish an (escrow) fund against future claims.
b) convince other players to provide liability insurance for his asset (ala credit default swap)
c) announce the virtual court under whose jurisdiction he is going to operate

Now a group of investors becomes disenfranchised and wants to initiate legal action. Currently their only recourse is running to the legal mafia, thus giving crypto a bad name and giving the legal mafia a pretext to introduce new regulations.

In the new model the legal process will be held within the system itself. A judge is appointed (randomly) and jury is convened. Both sides submit evidence and all deliberations are public. Verdict is reached and recorded in the blockchain. Various automatic triers fire upon a guilty verdict - funds are release from escrow, accounts are blocked, fraud alerts are placed, etc, etc, etc.

We need a governance model within crypto itself.
« Last Edit: January 15, 2015, 04:05:24 am by kwilliams »
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blackyblack1

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Re: Crypto-fiat, legal mafia, FUD and the time for a change
« Reply #2 on: January 15, 2015, 06:52:48 am »

In the new model the legal process will be held within the system itself. A judge is appointed (randomly) and jury is convened. Both sides submit evidence and all deliberations are public. Verdict is reached and recorded in the blockchain. Various automatic triers fire upon a guilty verdict - funds are release from escrow, accounts are blocked, fraud alerts are placed, etc, etc, etc.
This kind of judgement is implemented in Concorde: https://nxtforum.org/freemarket/ann-concorde/
Also you forgot about the law enforcement team: bunch of tough guys who will knock in your doors in the late night.
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Najska

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Re: Crypto-fiat, legal mafia, FUD and the time for a change
« Reply #3 on: January 15, 2015, 10:26:58 am »

The problem is: You cannot even publicly promise to deliver such and such products/services. The act of promising is itself regulated by the big bro. You need a licence to accept deposits, for instance, since accepting deposit means that you promise that the funds will be able to be withdrawn at a later time. Here one has to delve into the specific legal mafia codes which have conventionally been called laws. Let me give an example from the Turkish laws, then. If you claim a crypto-asset to be backed by "real" money - whatever that is, you act as a kind of financial service provider. In the same way, if you provide escrow services in the case of Concorde, your service needs to be escrowed by the mafia.

There seem to be two options:

1. We will restrict ourselves to a legally available invisible floating layer of thin air. All the services will be anonymous and based only on the gradually developing web of trust.

2. We will try to get licensed. But having the license to do such and such things runs the risk of being a member of the legal mafia. This is the case with most of the bitcoin exchanges, for instance.

Maybe the best way is to combine those two options. There are places where a legal license is a must. Those services should be used as a gateway to the inner circle of the web of trust. But this naive combination, which is already the case, is far from being a solution. For a solution, we need to think big. Think of the transportation of 2 tons of cocaine powder overseas, and ponder on what crypto-economy can offer in that situation. Keep in mind that we are not here to play a mafia game.

If crypto-fiat issuers find a way to make a profit out of it, that would reinforce the entire crypto-economy. I will come up with some proposals soon.
« Last Edit: January 15, 2015, 01:37:34 pm by Najska »
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