[reDraft] Regulation of Cryptocurrencies

[Rovikstead]

"I fail to see the benefit of internationally recognized cryptocurrency," Ambassador Amelia says in a pessimistic tone. "Cryptocurrency is a gamble; it's unstable and any attempts by the WA to control it are fruitless and a waste of resources. The negatives surely outweight the 'benefits' of this currency. Furthermore, cryptocurrency does nothing to benefit nations that reject cryptocurrency entirely, yet as members of the WA, they are obligated to give financial donations to the WA to fund committees and resources such as the ICC. I remain opposed."

[Bears Armed]

OOC: Seems like it to me. The term 'pyramid scheme' springs to mind...

OOC: And thus hardly Social Justice.

OOC: Agreed.

[Imperium Anglorum]

OOC: So, can anyone explain to me, in simple terms, where the "money" of a cryptocurrency comes from? Actual money is issued by banks/nations. Where do the cryptocurrencies get theirs? Do you just add numbers to some database somewhere (and if yes, then what's stopping you from adding howevermuch you want)? Is there a limited amount and more cannot ever exist?

The word 'blockchain' is impenetrable jargon. Rather, understand it as a distributed ledger. The money exists not because it is added in some central location, but rather, because everyone in the market has a ledger and the ledger says that it belongs to some person. It exists and is in some location because everyone agrees it exists and agrees that it is in some location.

Similarly, it takes value like all other commodities that have value. Literally the only reason why things have value is because people agree that those things have value. There aren't such things as use value or exchange value, etc. Things have value only for the reason that people believe they have value. Now, those reasons can be rooted in reasonable things such as a need to drink, but that only affects value via subjective value.

or use them to get certain things for yourself

Cowards! How dare they not grind like the rest of us! Ban them all for real world trading!

[Masurbia]

OOC: In simple terms? The money supply of a cryptocurrency is created as more and more people dedicate their computer resources to host the blockchain a process which is oddly enough called "mining." So as more and more distributed servers come on line the supply of the currency increases.

OOC: So if millions of citizens from WA members that use ICC-recognized cryptocurrency host the blockchain, wouldn't that simply inflate the cryptocurrency and make it virtually worthless? Isn't the sudden influx of people interested in investing in bitcoin the reason why bitcoin became such an infamously worthless currency in the end?

I don't know what currency you mean when you say the cryptocurrency. I also don't get why you say bitcoin is a worthless currency, when it still holds the most expensive cryptocurrency spot. If you're referring to the drop in prices that can be the fault of many countries looking at introducing regulations. The blame can also be pointed to the amount of ponzi scheme ICOs that are being discovered.

[Masurbia]

OOC: In simple terms? The money supply of a cryptocurrency is created as more and more people dedicate their computer resources to host the blockchain a process which is oddly enough called "mining." So as more and more distributed servers come on line the supply of the currency increases.

OOC: So you run a program on your computer and it gives you the "money"? Cause yeah, that's totally not at all something someone could abuse, especially if the thing has open source code.

Mining is where someone validates a transaction between two networks on the blockchain. If Frank sent Sam two bitcoin over the blockchain, the miner would validate the transaction (proof of work), adding the transaction to the blockchain and get a reward of new bitcoins. (You could say they dug them up, hence "miners") It's not just running a program and getting money. It's solving complex equations using expensive and powerful computers to gain new bitcoin. And I know that you will research this topic more, because you obviously have no idea what open source code means. It has nothing to do with mining.

[Tinfect]

Mining is where someone validates a transaction between two networks on the blockchain. If Frank sent Sam two bitcoin over the blockchain, the miner would validate the transaction (proof of work), adding the transaction to the blockchain and get a reward of new bitcoins. (You could say they dug them up, hence "miners") It's not just running a program and getting money. It's solving complex equations using expensive and powerful computers to gain new bitcoin. And I know that you will research this topic more, because you obviously have no idea what open source code means. It has nothing to do with mining.

OOC:
So, to translate this from nonsense tech-circlejerk language...

Person one and person two are making a transaction in Cryptocurrency; as there is no real backing or validation method for this currency or transaction, Person three has to step in and make sure everything lines up with their copy of the distributed, public ledger that records all transactions in said cryptocurrency. This check consists of running a program on their computer that resolves highly complex mathematical equations as a form of transaction validation, and Person three gets a unit of cryptocurrency for their system resources.

He's exactly correct that, for all intents and purposes, you're getting cryptocurrency for running a program on your computer. Now, if you'd bother to refrain from using meaningless jargon and actually explain what the fuck you mean, instead of asserting that someone trying to understand what, in all the nine hells, you're on about, is somehow just fucking stupid for not being able to penetrate your endless stream of nonsense maybe you'd have gotten somewhere; that being, the understanding that this legislation not only deals with something utterly pointless, but is counterproductive to what you're trying to do in the first place.

Now, as to whether cryptocurrencies are worth bothering with in the first place, I direct you to my prior posts in this thread...

[Masurbia]

Mining is where someone validates a transaction between two networks on the blockchain. If Frank sent Sam two bitcoin over the blockchain, the miner would validate the transaction (proof of work), adding the transaction to the blockchain and get a reward of new bitcoins. (You could say they dug them up, hence "miners") It's not just running a program and getting money. It's solving complex equations using expensive and powerful computers to gain new bitcoin. And I know that you will research this topic more, because you obviously have no idea what open source code means. It has nothing to do with mining.

OOC:
So, to translate this from nonsense tech-circlejerk language...

Person one and person two are making a transaction in Cryptocurrency; as there is no real backing or validation method for this currency or transaction, Person three has to step in and make sure everything lines up with their copy of the distributed, public ledger that records all transactions in said cryptocurrency. This check consists of running a program on their computer that resolves highly complex mathematical equations as a form of transaction validation, and Person three gets a unit of cryptocurrency for their system resources.

You....you......you literally said the exact same thing I did without using the term miner.

[Araraukar]

You....you......you literally said the exact same thing I did without using the term miner.

OOC: Which should be a clue for you, because I've actually understood what all the other people are telling me about this stuff, just not your weird fluff.

And that, I think, should be some sort of an indicator of how much most people who will actually be voting on this if it gets to vote, will understand. They won't be interested in finding facts (to tell you the truth, neither am I, but I wanted to know if my hunch about wrong category was correct) about something that's fairly obscure knowledge; most commonly if people don't understand the contents of the proposal, they vote against it. That's why good definitions are the key on less common subjects. Yours are not it.

As for how it seems to work, what's stopping someone from running any number of virtual machines on their own server to simulate a network of separate computers, with transactions and transaction monitoring between them, and thus make theirself more money than they should be able to? Or is it completely random which networked computer gets to do the calculations? No proximity preference? Can you do all of the "mining" in a closed network, like, say, at a workplace, and then connect to the rest of the Internet with your newly acquired wealth?

If it somehow isn't possible, then how are people without powerful computers getting BitCoins units of cryptocurrency? Buying with RL money/items from whichever university's supercomputer was used to generate it? How powerful does the "powerful computer" need to be? How quickly does the computation need to be completed? Does it have to be done by a single machine? Distributed computing is a thing.

And open code means anyone with decent programming skills can meddle with the code, presumably for improvements, and the changes are usually validated by a group of peers who act as editors, before the new code is put into the update queue for all the users of said program. At least that's my "off the top of my mind without looking at Wikipedia or any dictionaries for more info" understanding of it.

As for using jargon, without looking them up online, would you know what I meant with r/K selection? Or western blot? Or beta sheet? Just because you may know the expert vocabulary on something doesn't mean you shouldn't explain it by using common terms when trying to make an international law based on the concept.

[Kenmoria]

"The noting clause should, to create consistency, be labelled as number 4 in the resolutuion."

[Arotania]

OOC:

Cryptocurrencies themselves are not code.
Just like databases. Or HTML. Or e-mail.
They are structured data that can be interacted with. They are not programs. The programs that interacts with the cryptocurrencies (miners, wallets..) can be built as open source. Everyone can write their own programs to interact with a public cryptocurrency.

But to make a cryptocurrency, you have to code it. Or code off of a different cryptocurrency with open source code.

No, you have to write programs to interact with the blockchain - miners, wallets, etc. There still is no program code at the heart of a cryptocurrency. There is the blockchain and the standards and parameters that define it.

They would be on a private blockchain. Same as above. You display severe incomprehension of the topic you are trying to legislate.

You asking questions does not mean I don't know the topic.

Yet you still keep talking about "the blockchain". Also you still haven't answered why you want to ban private cryptocurrencies.

This again... A central bank could issue their own cryptocurrency, defining its algorithmical parameters, and thereby control its supply.

The blockchain eliminates the need for a central bank. So would a central bank even have to use the blockchain because the blockchain makes them lose money.

[citation needed]
They could just make it proof of stake and use it internally. Also what would 'losing money' mean in the context of a central bank anyways? A central bank is not in the business of 'making money' or being profitable. And how would 'the blockchain' (again the definite article) eliminate the need for a central bank? It is in no way connected to any sensible fiscal politics and regulation of money supply. Cryptocurrencies are hardly currencies to begin with.

[He Qixin]

OOC: How does ANY part of this proposal relate with Social Justice? I'd say its Free Trade instead since currencies are also involved in trade.

Edit: I'm a native English speaker.

[The First German Order]

OOC: How does ANY part of this proposal relate with Social Justice? I'd say its Free Trade instead since currencies are also involved in trade.

Edit: I'm a native English speaker.

OOC: I'd say less Free Trade and more [b]Heavily Regulated Socialist Make Believe Online Currency[b] Trade.

[Araraukar]

OOC: How does ANY part of this proposal relate with Social Justice? I'd say its Free Trade instead since currencies are also involved in trade.

OOC: I'd say less Free Trade and more Heavily Regulated Socialist Make Believe Online Currency Trade.

OOC: Actually, considering that it seems to be peer-to-peer stuff, without a central controlling company, to regulate it you need to regulate people's rights to do whatever the hell they want, and thus makes it fall into Moral Decency.

EDIT: Also, please don't drag socialism into this. If anything, it's pure capitalism.

[The First German Order]

OOC: I'd say less Free Trade and more Heavily Regulated Socialist Make Believe Online Currency Trade.

OOC: Actually, considering that it seems to be peer-to-peer stuff, without a central controlling company, to regulate it you need to regulate people's rights to do whatever the hell they want, and thus makes it fall into Moral Decency.

EDIT: Also, please don't drag socialism into this. If anything, it's pure capitalism.

OOC: It was a joke because heavy regulation by a government.

[Republic of Europe]

c. A cryptocurrency shall live up to the standards of the defintion provided,
So you are saying that bitcoins will have an "expiration date"?

"This proposal does not revolve around bitcoin, nor does it mention bitcoin."

OOC: Why do you say an "expiration date."

OOC: This took me a bloody long time to respond, so....
IC: I mentioned bitcoin cause that's the first cryptocurrency that comes to mind. I meant cryptocurrency in general. And "expiration date"
as in, will it have a pre-defined period of existence? If so, that's a bad thing. A currency must live according to how much it's used, not end in a predefined period.

[Dirty Americans]

OOC: So if millions of citizens from WA members that use ICC-recognized cryptocurrency host the blockchain, wouldn't that simply inflate the cryptocurrency and make it virtually worthless? Isn't the sudden influx of people interested in investing in bitcoin the reason why bitcoin became such an infamously worthless currency in the end?

OOC: It doesn't quite work that way. (In fact it doesn't quite work at all, but then again, theory and practice are never the same.) Every new person that hosts the blockchain is doing so because they want to use the currency. Therefore they create an increase in demand. The ideal balance would be that mining operations are equal to the demand of the owners of the mines thus supply keeps up with demand. Too much mining for the new demand results in deflation, too little results in inflation.

On the other hand, "investors" aren't "miners." They create demand without supply, thus causing inflation. But their demand is fickle, which leads to significant market fluctuation. This strange thing happens all the time and few people realize it because it is so natural to them. It also defeats the purpose of the coin itself, which is supposed to be a medium of exchange not a medium of speculation. People don't watch market fluctuations before they purchase a home or car or boat. A currency needs to be pretty damn stable in order to work normally and transparently.

The nice thing about bitcoin is that the person in the United States can use the same coin as that of France. Sure, a lot of credit cards will translate dollars to euros but they do an on the spot conversion to do so. Even with a more stable currency market you still have to get the timing right. Cryptocurrencies do that up front, so you pay the necessary cost of "exchange" up front and then no longer have to worry if your store is in Europe, or Asia, or the Middle East, because everything is now the same medium of universal exchange.

[Araraukar]

OOC: The nice thing about bitcoin is that the person in the United States can use the same coin as that of France. Sure, a lot of credit cards will translate dollars to euros but they do an on the spot conversion to do so.

OOC: And that's difficult how? I mean, they're using real currencies with real and published conversion values. Bartering tokens like BitCoin only have value based on the fickle shared opinion. And, apparently, more of them will continue to be generated, ad infinitum, as long as they're used in trades.

[Arotania]

OOC: Actually, considering that it seems to be peer-to-peer stuff, without a central controlling company, to regulate it you need to regulate people's rights to do whatever the hell they want, and thus makes it fall into Moral Decency.

OOC:
Hm, would it really rule out central ruling authorities? Delegated Proof-of-Stake and Proof-of-Authority have been implemented as consensus algorithms. Really depends on how one interprets 'third party' in the first sentence. Choose a narrow interpretation and you throw out every possible cryptocurrency. After all transactions have to be approved in one way or another by other participants in the network. Otherwise there'd be no consensus and the whole thing would fall apart. But if you interpret it loosely, i.e. third party is anyone who is not a participant in the network then Proof-of-Authority is included, which brings us neatly to private cryptocurrencies where PoA is perfectly suited.
Also would Directed Acyclic Graphs fall under the blockchain defintion? Looks like it for me.
Really funny how each sentence falls more and more apart the longer you think about what the words are even supposed to mean.

Good overview about consensus algorithms for cryptocurrencies: https://hackernoon.com/a-hitchhikers-gu ... 1aae3eb0e3

[Araraukar]

OOC: Hm, would it really rule out central ruling authorities?

OOC: Well, the author has stated this intention...

Exactly, it keeps the government out of the market