Incredibly vindicating to see the @Bis @RaphAuer @Jon__Frost use my framing of miners as intermediaries in this BIS Bulletin.

https://twitter.com/BIS_org/status/1537431307440910341

I have been talking and presenting on this issue since 2018 & there is lots more to say about it.

-crypto systems have intermediaries within them
-crypto txns are not p2p
-those intermediaries can affect outcomes for users of these systems - hence pose risks to them

When is risk systemic?

When do you act?

Do you wait until the risks are undeniably systemic before it is ok to act?

Or do you note a trajectory of actions that make systemic risk more likely? These questions lie at the heart of whether we need to worry that crypto poses risks to the mainstream financial system.

At this point, we just have to hope that the risks of the crypto meltdown stay relatively contained to the crypto sector.
I.e., will the walls around the garden hold, or are there too many crypto tendrils that have woven their way into the mainstream financial system? I have been trying to take a break from commenting on crypto, but what is happening now is what I have been thinking about and warning about since I began researching crypto in 2013.

The Texas law that bans abortions but delegates enforcement to individuals is a manifestation of the Veil of Decentralization, and it just succeeded at the US Supreme Court.

https://twitter.com/rickhasen/status/1433283947044106242

Lesson: If an entity w/legal accountability (here the state) is prohibited from taking an action (here, passing & enforcing a law banning abortion), it may 'shatter' or 'fragment' itself into its constituent parts (individuals) & have the parts take the prohibited action.

The reason it's so difficult to come up with an amendment that includes crypto exchanges and excludes miners from the definition of 'broker' is that both parties do transfer digital assets for third parties in exchange for payment. That's why the crypto industry has been pushing for amendments that explicitly carve out miners from the broker definition -- because their activities could arguably fall into it.

This (deleting all crypto provisions from the infra bill) is the best outcome.

No substantive amendments are workable and there is not time to consider their full implications. So stop tinkering with language.

The crypto industry & the public are all better off this way.

https://twitter.com/angela_walch/status/1423445191218892800

There has not been enough time to get the provisions right to accomplish clear policy goals. The amendments (Warner/Portman & Toomey/Wyden/Lummis) do not make sense to me, and I believe the adoption of either will have surprising & far reaching consequences.

It is bizarre to me that people's responses to my critiques of crypto are to ask me why I'm not attacking TradFi or to point out similar problems there. To be clear, I know there are big problems in the traditional financial system. I know they hurt a lot of people, and that many people in crypto view themselves as addressing these problems. I agree that problems in TradFi are very bad and need fixes.

A few thoughts on this.

https://twitter.com/lex_node/status/1420692678254157825

Miners have powers that are meaningful - ability to front run, manipulate ordering, target delays, etc.

Lots of drama going on with alternative code releases on #Bitcoin. Debate about what is "official" and who gets to say when there is "consensus" on a software release. Gets at my points about fungible and non-fungible devs (NFDs). I assume that all owners of #BTC & financial products tied to BTC are following the conversation on technical & political issues carefully so they can determine--based on their own review of the code & no reliance on any non-fungible dev--whether they should upload code.

Old enough to remember when pointing out that the miners' transaction ordering power could be exploited was called spreading FUD.

https://twitter.com/Dogetoshi/status/1382472870002065411

https://twitter.com/angela_walch/status/1124067492706570242

I remain fixated on worst-case scenarios, systems collapse, & governance during crises in #crypto/#blockchain systems.

Working on a paper tentatively called:

Blockchain Emergencies & Open-Source Software Governance: Is 'Rough Consensus' a Suicide Pact? I'm thinking about how the "rough consensus" and radical transparency practices of open-source software governance shift during crises due to the need to save the system.

Congrats on this regulatory capture. Seriously.

https://twitter.com/jerallaire/status/1346233132396257282

Once my family matters settle down, I'll have more to say on this.

Here are some things I think that San Antonio (and other officials) should consider when evaluating whether /when to close K-12 schools, given what has been reported about the population most vulnerable to #COVID19.

(IANAEpidemiologist) Spoiler Alert: More than 60 million Americans live in multigenerational households, meaning that those most vulnerable to the virus *cannot* isolate themselves from kids who bring the virus home with them from school.

I also find this argument persuasive.

THREAD on #CBDC & #cash

Having a central bank digital currency alongside cash is effectively like the govt offering 2 different competing monies, b/c they have different characteristics, risk profiles, etc.

https://twitter.com/coindesk/status/1147068481948606464

Cash is better for privacy, not subject to systemic digital failures, & accessible to all (even those who can't afford digital svcs).

"It is arguably difficult to conceptualise ‘rulebreaking’ within the context of cryptocurrencies. Functionally, double spending is not possible, as nodes within
the network will simply refuse to recognise such transactions."

eprints.lse.ac.uk/88095/1/Elliot… This implies that double spending is the only way to "break the rules" of a crypto system.

We had our final class of Cryptocurrencies, #Blockchain Technologies & the Law yesterday!

At long last, here is the syllabus. (And yes, it is already out of date in this high-speed #crypto world.)

ledgerprof.files.wordpress.com/2018/11/blockc… The course, as with the tech itself, is a work in progress. Thanks to my students for going along for the ride and to @VladZamfir for joining us for the governance class!