[Cryptography] Incentive Politics

[efc at swisscows.email]

On Tue, 3 Oct 2023, Ray Dillinger wrote:

> What we learned was that finance cannot be deregulated, because it is finance.  Money is power.  Power is regulation.  Nobody who has
> money, wants to risk money or spend money if they do not have regulation to ensure that their risks are honestly represented or in
> case they do not get what they spent their money for.  Therefore, people who have money, or anything that can effectively be used as
> money, demand regulation.  Having money means that they also have power, so they actually get regulation.

I think at the end of the day it is about trust. If something goes wrong
in the real world, I have some amount of protection and transactions can
be reversed.

How is this handled privately without regulation?

Let's look at criminals. They do love crypto due to its anonymous nature
and the fact that it is not reversible. But how do they trust each
other? By reputation, and by threat of violence.

If you try and cheat the maffia, violence will be used to regulate the
situation.

Much like the government. Regulation works because ultimately it is
based on violence or threat of violence.

How does it work for us non-criminal people who try to use crypto?
Reputation, but from time to time we get scammed and there's nothing to
do about it.

Then there is teh problem of wild currency swings, and crypto not being
based on anything, just like fiat as well.

But I agree, solve the trust problem and reversability (or perhaps some
kind of insurance instead?) and you will take a big step forward to
something that will work at scale.

Best regards, 
Daniel