There’s a lot of uproar at the moment about SBF’s blogpost on regulation and the subsequent response to it by Erik Voorhees.

I skimmed SBF’s original post and haven’t had a chance to read/digest Erik’s yet (though I always like his way of thinking and communicating).

I’m going to do that.

I kind of view crypto regulation as like a Disney amusement park with a “Fast Pass.”

You get your “Fast Pass” (in this case, your KYC) at the door and then, when you enter the amusement park, you can go on any ride (DeFi protocol) you want, without having to show any proof of ID or eligibility. That’s permissionless.

However, Disney (in this case, the ledger) is tracking the badge, so they always know where you were and who you transacted with. In the Web3 version, however, they can’t shut it down, but what they can do is monitor where you were, how much you made, with whom you interacted and where the money came from/went to.

If, when you exit the park, they say “well, you sent money to the mullahs of Iran,” then your access to the park can be limited or banned in that jurisdiction. Obviously, you can move to another physical-based jurisdiction, but that’s a whole level of hassle and another decision.

One way or another, it will get sorted out and the US will either maintain its global dominance in finance…or it will surrender it to the cloud.

There’s a lot of uproar at the moment about SBF’s blogpost on regulation and the subsequent response to it by Erik Voorhees.

I skimmed SBF’s original post and haven’t had a chance to read/digest Erik’s yet (though I always like his way of thinking and communicating).

I’m going to do that.

I kind of view crypto regulation as like a Disney amusement park with a “Fast Pass.”

You get your “Fast Pass” (in this case, your KYC) at the door and then, when you enter the amusement park, you can go on any ride (DeFi protocol) you want, without having to show any proof of ID or eligibility. That’s permissionless.

However, Disney (in this case, the ledger) is tracking the badge, so they always know where you were and who you transacted with. In the Web3 version, however, they can’t shut it down, but what they can do is monitor where you were, how much you made, with whom you interacted and where the money came from/went to.

If, when you exit the park, they say “well, you sent money to the mullahs of Iran,” then your access to the park can be limited or banned in that jurisdiction. Obviously, you can move to another physical-based jurisdiction, but that’s a whole level of hassle and another decision.

One way or another, it will get sorted out and the US will either maintain its global dominance in finance…or it will surrender it to the cloud.