Voluntary compliance as a necessary feature

in tauchain •  6 months ago

Voluntary compliance in moral alignment with the participant

Every platform which is decentralized in my opinion should allow it's users to comply with the laws of their local jurisdiction to the degree which each user thinks is moral. The platform should not enforce the laws of any specific jurisdiction or remove the ability of any user to comply with the laws of their local jurisdiction. This means if a user would like to track and pay taxes the platform should provide a means for users to do this. This means if users would like to go through KYC before interacting with ICOs so that their accounts are whitelisted by banks they should be allowed. This also means that if a user thinks that a certain regulation or rule or law is immoral that they should be allowed to make up their own mind and take their own risks.

In other words platforms should not choose for users what is right and wrong. Platforms should simply provide the tools so that each person can decide how much risk they are willing to accept in alignment with their morality. The ability to comply with the law is necessary for mainstreamability. Mainstreamability ability is about winning the long war rather than the little battle. In order for crypto to have the maximum positive impact on future generations it must go mainstream and escape from the fringe use cases. This applies as much to Steem as it does to Ethereum as it does to Tauchain. Mainstreamability are the key elements which enable mainstream adoption success.

Legal contracts as tokens

Compliance can be modularized, tokenized, decentralized. Legal contracts can become tokens. The risk (and it is real) of money laundering or rogue nations violating sanctions can be reduced by decentralizing AML/KYC. At the same time regional locks in my opinion are one of the worst ideas and should not be technically enforced. Once again compliance should be voluntary but always allowed.

What does it mean to voluntarily comply? A participant can choose to comply to reduce their risks. The participant who does not comply is willing to take the risk of non-compliance. This means compliance is a means of risk reduction. But in a decentralized network such as a decentralized exchange the risk is entirely on the users. The users can decide (and only the users) which level of risk is best for them. Developers of the platform should have no responsibility to decide for the users of the platform what is morally right or what risks are acceptable or unacceptable to take.

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Sometimes over-compliance poses also risks. E.g. Business risks. In some areas there are so many regulations (I agree, maybe not the ones you mentioned) - to be compliant with all and everything has extremely high opportunity costs. So a balance between compliance level and risk level needs to be done. This requires a lot of experience.

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While I agree with the concept it also leads to the tough decision on what is compliant and what is moral in the eyes of a person and/or organization. There are many grey areas in these two concepts as you go to different regions and even within populations in them.

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My stance is it is a decision for the organization or individual to make rather than the platform or developers or anyone else. The user ultimately must decide between maximum compliance vs maximum risk. There is a spectrum.