I was reading the latest post by @themarkymark regarding NFTs and securities.
This brought up some valid points about where the NFT world stands in terms of the regulators. He cited some things said by Hester Pierce of the SEC. "CryptoMom" is all for the industry but she is a regulator and expects compliance. According to the post, they are going to be watching how NFTs are used to skirt the securities laws.
What is interesting is this all falls into what I have been calling the "Great Race". This is the battle between technology creators/innovators and the establishment. It could be said the government is one the establishment side but we might be seeing some end up embracing crypto like the State of Wyoming.
Certainly, we are seeing some strange bedfellows.
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Nevertheless, an important point in all of this is the fact that while there are discussions and comments about NFTs, what is a regulatory body like the SEC doing? Presently they are still going after people for things they did during the ICO craze.
That was in 2017.
This is how far behind they are.
Obviously, someone like Pierce, who was paying attention all along, is aware of what is taking place. That, however, does not overcome the fact that government moves very slow. For those who are fans of decentralization and freedom, this is a welcomed benefit. Their inefficiency works against them.
Of course, once they decide where the line is and how to apply the laws they have, then it is gloves off time. They go after any these feel they can take down.
In the past few years, we saw the rise of two different facets to this industry. We saw the evolution of DeFi into what it is today and the introductions of NFTs. So, while the SEC was sifting through their case load of illegal ICOs, the industry developed a couple new areas for the regulator to focus upon.
As we can see, they are falling a bit behind.
That does not mean that everyone has a license to steal. As we know, they will eventually get to these areas and then they start passing out subpeonas. Being on the receiving end is not likely to be very fun (nor cheap).
We have to keep in mind that DeFi was the big hit of 2020 with NFTs grabbing that role in 2021. The question is what will arise in the next couple years that will capture the imagination of the innovators? In other words, what will we be dealing with that people like Pierce will be commenting on?
The continual cat and mouse game is getting very fascinating. Personally, I have a tough time thinking the regulators can keep up with the developers. This is a global situation with contributors coming from all parts of the world. When you have a movement like that, it is hard to isolate and pin people down.
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At the same time, things are only growing. As more developers show up, the pace quickens. The fast amount of projects being created is overwhelming to those of us who follow this on a regular basis. Imagine how it all much look to someone who is looking at things from a regulatory standpoint.
Of late, the digital asset concept is really intriguing me. How are regulators and lawmakers going to handle this? If a digital asset is generated via code in a smart contract, yet that is only subject to the imagination of the developer creating the contract, how can that be legislated? In my view, it gets too varied.
Laws are specific in their language. This makes it very difficult to write something all encompassing. As we know, change one thing and the law is not applicable.
Governments, even though it is hard to see, only have a finite number of resources. They are dealing with a certain number of personnel. People have to operate within budgets that are set. Accounting for their time is vital.
We are dealing in the digital world. This is near infinite. Thus, we see how one side is not bound by the same constraints. People all over the world are coding things, resulting in more projects. This is compounded by the fact there is a lot of open source software showing up. Here we see things accelerating since innovators effectively have shortcuts.
The question is at what point does the system simply get overwhelmed?
That will end up feeding into who wins this cat and mouse game.
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I can’t wait to explain to my tax people Defi and NFT sales. Not to mention I’ll dump every hive Leo transaction and let them calculate the gains for an upvote, comment post lol.
Make sure you have a hidden camera for that one. I wanna see it too. lol
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The accounting profession is really going to scratch their heads.
I would expect a rather large tax preparation bill from your accountants this year.
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Yeah cost $700 this year without running these transactions since I have not cashed anything out of hive Leo.
I personally see the government hitting the big guys and leave a warning. The problem is can they stop all the people looking for money? It might stop some people but people will always skirt the rules to make money.
Honestly the biggest issue isn't the legislation but the fact that they will chase everything with outdated laws. Take for example copyright, it has not been adapted for digital content. The legislation will take forever to pass. So the government will use its outdated laws and spread its wings to force people into costly lawsuits. Also, the defendants are in a disadvantage due to the corrupt system.
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I think the system will be made obsolete by the time they do catch up. We are seeing things move rapidly and in a networked world, they do not really have a place.
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Although I am busy watching Hive rise to the moon
However, I focused on some points:
Of course, but we must take into account whether they want to organize for itself or something else behind it, and this is what is on our minds all
Yes, people have time and they have a specific budget, but the projects in front of them are the ones that determine where they will set their priorities, so we should not force them to do anything.
You will continue in such-and-such. What if I change my mind The matter is too complicated and too big to be regulated by strict laws
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Great questions. Perhaps it will turn into a contest betweeb AI(s) and AI(s).
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That is most likely at least part of the case. Automation is going to be involved somewhere along the line.
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Raoul Pal said in one of his conversations with some other finance guy heavily in crypto - I think it was Novogratz - that KYC will eventually come to crypto in a more pervasive way than today. We'll see about that. Centralized exchanges cannot but comply and do KYC but DEXs would be a different matter particularly if all the developers are pseudonymous. There'd be no one to pin down as a money transmitter and subject to the relevant laws.
At some point, governments may fade away into irrelevance. While some sort of governance is inevitable and necessary to keep bad actors in check, I'd rather see that automated and made into a much more elegant and simple system than the bloated bureaucracies we have in place today.
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The world is changing in a hurry. The old, archaic legacy system has already been failing for many years. This only exacerbates the problem for them. These career politicians are so focused on staying in power they don't even realize that the power is going to be sucked out of them by the innovation they are not paying attention to. Bitcoin $1M and crypto $50 trillion will create a whole bevy of billionaires that will have a whole new decentralized vision of how the world should be run. Going to be very interesting....
There you go, another topic for you to run with, taskmaster. lol
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It is a good topic and I will try to figure out how to weave it in.
Yes there is a lot about the legacy system that is still operating according to status quo. They do not realize what is happening at the underlying layers.
This is a global shift, something that most are not accustomed to dealing with. And it is going across all industries.
It is remarkable to see what is happening before our eyes.
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It really is. It will be very interesting to see what these new crypto billionaires will do with their money. Will they party and ride off into the sunset? Or will they take on the new responsibility that comes with their wealth and become consumer advocates and purveyors of change to the system? Like I said, there could be hundreds, if not thousands of them being created in the next 5-10 years.
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Not only the billionaires but the millionaires also.
There are going to be thousands of times more of them created than the billionaires. It is going to generate a ton of wealth. How do they view the system?
I guess it starts with the foundation one is at right now. Those who are here simply for the money are no different than those who are making bank in the stock market. Same mindset.
Yet those who are here for freedom and to change lives, then it is a different outlook that should carry through.
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Governments around the world have no other option than to go digital themselves, and I hope this will bring more transparency and efficiency to those that do
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Going digital replaces a great deal of their power. In fact, what makes them needed in a digital world.
It will eliminate many of the bureaucrats and a probably some of the politicians. Yes they can streamline much of their operations but that will reduce the size of it.
Governments power comes, in large part, to its size. That is why they always push to make it bigger.
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NEVER forget the waste.
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