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donkeypong:

puppies:
I could be wrong once again, but I'm pretty sure the purpose of the sec is the same as all regulatory agency's,  to protect established organizations from competition through raising the cost of entry.   Seems to me that they are doing exactly what they should to that effect.   

Perhaps you meant to say "the stated purpose of the sec"

bytemaster:
A DAC makes the need to arrest someone irrelevant and unnecessary, counter productive evennn.

luckybit:
This is not to say we wont need law enforcement, it's just to say that the SEC does not understand this technology and does not have the knowledge to regulate it.

Law enforcement will still be required to go after thieves, scam artists and others who are flagged by the community. No software is going to make an arrest even if the investigation could be crowd sourced, even if the software could make fraud easier to detect.

The role of the SEC:


--- Quote ---Protect investors
Maintain fair, orderly, and efficient markets
Facilitate capital formation

--- End quote ---
http://www.investor.gov/introduction-markets/role-sec

At the moment the Bitcoin community is able to do everything except protect investors. We can do a lot better job at protecting investors and we must if we want to be taken seriously.

But we have to define some principles as to what protecting the investor means and then abide by our own principles by putting it into our software design. This has to be a global effort, so we need a way to vote or obtain a global consensus on certain priorities.

luckybit:

--- Quote from: kokojie on March 21, 2014, 11:15:05 pm ---Wait, isn't the point of a DAC is that it's, you know, "distributed"? so that it can't be shutdown, and don't have to care about SEC or whatever government organization? Like if a country tried to shutdown Bitcoin, it would fail.

--- End quote ---

I think strategically the way to really make the SEC not a concern is to design your DAC to be self regulating so that you don't need an external government regulator. You make the government regulations irrelevant and redundant rather than take an adversarial approach by creating DACs which do the job of the SEC better than the SEC.

I think one of the mistakes I see developers in the community making is they take the adversarial approach in many cases. The best approach is to show that DACs can protect investors better than the SEC. This would put the SEC in an impossible situation where the DAC is better at doing their job than they could be.

If we want Bitshares to become something serious then it has to be self regulated by the community. This means we must figure out ways to protect our investors from scams, to prevent fraud, to do KYC, etc.

To give an example of the sort of solutions we will need, take a look at BlockAuth

--- Quote ---BlockAuth is a service that to meet the KYC & AML requirements needs of bitcoin sites, as well as a service that protects the privacy of the end users and provides a convenient accounting system for them. It also functions as a way to ensure that users on sites don't have multiple accounts to astroturf or to scam other users.

Our primary service offering is that we'll function as an OAUTH provider. All member sites have to do add a little snippet on their website and users can log in with BlockAuth just like how some sites let people login with their Google Account or Facebook Connect.

At a minimum, the member site will always get a user identifier that will always be unique for the relationship between that user and that site (sites can use this as the user identifier), and the Auth Score the user has. Other information can be requested such as the users phone number, the complete or portions of the mailing address, email address, profile photo, links to social media, etc. The user ultimately has the choice to allow or disallow that information to be passed to the member site.

In order to build up their Auth Score, end users will go to our site to fill out their information. We perform KYC checks on everything and provide encouragement to the users to verify more and more to increase their Auth Score.

--- End quote ---

https://github.com/DeftNerd/BlockAuth

Software can eventually replace the function of the SEC. In fact, the function of the SEC could become a DAC and then you don't have to deal with all the unfair application of the law and potential for corruption within the SEC.

The SEC exists to provide a service, if it's possible to turn that service into a DAC then that is what we should do in parallel while we make the claim that Bitshares should not be regulated.

Let's not make the same mistake that Bitcoin developers made.

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