Analysis on the Supervision of Blockchain

First, the center and the center

After the blockchain industry has grown and developed, regulation has become a big problem.

Because the biggest feature of the blockchain is decentralization. Regarding what is decentralization, there is currently no uniform definition in the industry, even if it is defined from a technical perspective. In order to understand what is going to the center, we may wish to define what is called "center".

What is the center? My personal understanding of this is:

If there are individuals and organizations that can play a decisive role in the development of things, then this person and organization is the center.

For example, the leaders and bosses of traditional companies have a decisive role in the development of the company, so this is a centralized organization.

On the contrary, if no one or organization can determine the development of things, then we can say that it is a decentralized organization.

For example, for Bitcoin, at least no organization now dares to say: I control Bitcoin. Bitcoin must be done according to my ideas. If I don’t do what I want, I will destroy Bitcoin, or me. Just how about Bitcoin.

But here is only one feature of the blockchain: there is no clear leadership. In my opinion, the decentralization of blockchain has the following three characteristics in regulation:

1, no clear leadership 2, can not close 3, it is difficult to modify

The “no clear leadership” just mentioned is the first feature. This feature determines that once something goes wrong, it is difficult to find a specific person in charge, which makes the supervision difficult.

At the same time the second feature: can not be closed. Some people describe a blockchain as a credit machine that cannot be shut down once it is started. That is to say, like Bitcoin, once it is started, no one can clearly decide how it develops, it is not closed by itself because It is based on a P2P network. As long as there is a person running at the full node, the project will continue to exist, and it is basically impossible to completely shut down all the nodes in the world.

The third feature is: it is difficult to modify. The development of Bitcoin is based on consensus. It is very difficult to modify the rules. It can only be modified when most people accept it, and it must be done in a way that is costly and risky.

It is these characteristics that make the blockchain project different from the traditional centralized project, which has caused certain difficulties for the supervision of the government and the industry.

However, these problems are not unsolvable. Sometimes they just need to change their minds. The following are some thoughts on my future regulatory thinking.

Second, the supervision of POW, POS, DPOS projects

1. For the project of the POW consensus mechanism

Taking Bitcoin as an example, for a project using the POW consensus mechanism, because it has strong decentralization properties, no specific person in charge, cannot be closed, and is difficult to modify, it may not be restricted from the supply side of the currency. , we can limit from the use side, the demand side.

In other words, we may not be able to prevent the release of Bitcoin, but we can start from the use side. For example, for taxation, we can require all merchants that accept bitcoin payments to report the receipts and payments of Bitcoin as scheduled, or simply by the central bank's digital software, automatically count and automatically pay taxes; for example, from customer information From the perspective of business, in terms of commercial security, the system is generally required to know the information of buyers and sellers. Although Bitcoin itself is based on public-private key pairs, when you buy services, such as when you buy clothes, you It is purchased on the Taobao website. You have your personal data on Taobao and your express information, so the information can be verified.

To put it simply, it's a change of mind. Although we can't regulate Bitcoin, we can regulate people and businesses that use Bitcoin .

2. For the project of the POS consensus mechanism

The POS consensus mechanism has many advantages. It is environmentally friendly, efficient, with fast transfer time, low commission, etc., and it is closest to the current equity model in traditional finance. The public understands that there is no pressure; traditional equity is essentially one. POS, so the traditional regulations for the financial sector can be directly applied.

Of course, there are also different places. For example, the object of equity is stocks, the object of POS is the pass, and there is a big difference between stocks and certificates. The rights behind them are completely different. This is in the subsequent pass-through economy. To discuss. Another difference is that the holders behind are different. In China, for example, most of the holders of A shares are Chinese, and Token holders are all over the world.

3. For the project of the DPOS consensus mechanism

Compared to POW and POS, DPOS may be the most centralized and the least difficult to supervise.

For example, the “Regulations on the Management of Blockchain Information Services” promulgated by the previous countries, the “Regulations” aim to clarify the responsibility for information security management of blockchain information service providers, standardize and promote the healthy development of blockchain technology and related services, and avoidance zones. The blockchain information service security risk provides an effective legal basis for the provision, use and management of blockchain information services.

After the introduction of this regulation, the relevant blockchain companies and practitioners took the initiative to file the case, the most documented are the nodes participating in the DPOS operation, why are they most active? Because they are individual entities, without any decentralized characteristics of "protection", they are always under the supervision of the state, so they can only act in accordance with national regulations.

The supervision of the DPOS system can draw on the partner system in the Company Law. For example, the 21 nodes of EOS are equivalent to 21 partners. Some projects may be divided into resident nodes and mobile nodes, so they can be separated. General partners and general partners in the analogy partner system.

Third, the supervision of the pass-through economy

The pass-through economy is a very important area of ​​the blockchain. The pass-through economy itself is not difficult to regulate, because many of the pass-through economies are traditional projects with a Token .

However, the difficulty is that the pass is not the same as the pass. Some pass certificates are financial attributes, such as equity, options, claims, etc. However, some pass certificates correspond to points and use rights; The essence of the card is a commodity; some are even a combination of multiple rights.

In this case, the real difficulty lies in the splitting of the rights corresponding to the pass and then the standardized management .

All the rights and interests corresponding to the pass of the pass are split. If they belong to the financial property, they will be regulated according to the financial. If the goods belong to the goods, they will be supervised according to the sales of the goods. If they belong to the points, they will be managed according to the Internet points.

For example, I have always emphasized that it is not all of the certificates that need to be listed. It is not normal for all the certificates to go public. You think, if the original is just a form of points, you are still only points in the pass, but what about the points?

If it is just a right to use, similar to the function of a commodity, then it does not need to be listed, because once the listing price will fluctuate, it has a financial attribute, and the financial attribute will consume the attribute. In this case, you should sell the certificate as a commodity rather than as a financial product.

If the certificate really corresponds to a financial attribute, then the financial attributes behind it need to be standardized. For example, if the corresponding equity is equity, then there must be voting rights, dividend rights, etc., which must be recognized by the national regulatory authorities and subject to the supervision of laws and regulations, rather than the mood of the project.

At the same time, the certificate is very flexible, in addition to the right to use the right to use, equity, it can also have several rights at the same time.

On the one hand, the flexibility of the certificate is reflected. Many future innovations will occur in the intersection of these rights and interests; on the other hand, the certificate at this time needs to have a clear regulatory mechanism, especially the need for standardization, not with the project side. The mind is set.

Here I propose a regulatory approach called “regulation is strict”. That is to say, if a pass has both attributes, then the pass needs to fully accept the supervision of the two attributes. If there is a conflict, it will be executed according to the strict supervision.

For example, if a pass has both the right to use and the equity attribute, then the pass needs to be subject to both the right to use and the equity; if there is a conflict between the right to use and the equity, because the equity is generally Corresponding supervision is much stricter, so this pass should be subject to more stringent “equity attribute” supervision;

If the problem of supervision is solved, the responsibility can be clearly divided, and then the fundamental problem of "what is the general certificate" will be solved, and such a pass-through economy will have a possibility of a major outbreak.

Fourth, dilute the concept of legal person, strengthen personal concept

The blockchain project also has some obvious features, such as its direct globalization, for example, its registration may be in a small and unregulated small country, and its operation is all online, and it Investors and passport holders are all over the world.

There are two special circumstances at this time: one is the disappearance of the company's main body; the other is the dispersion of the investor's national boundaries.

To be more direct, there is no legal entity, the company's tax can not be levied; investors are too scattered, personal income tax collection is also difficult; and when there are crimes that need to be pursued, there is no way to catch up.

The best way to do this is to dilute the concept of legal person and slowly transfer the supervision from the legal entity to the individual subject . Whether it is taxation or supervision, responsibility or anything, it must be from a personal point of view. Because the next era is an era of personal rise, the rise of the certificate is a substitute for the company system. This is a big historical trend, and our supervision can only be as good as possible.

For that kind of multinational project, you can follow the principle of “ who is responsible for financing, who is profitable and pays taxes” . In other words, although a blockchain project has a global scope of operations, it must be someone responsible. The big principle is who will be responsible for financing. And no matter how global the project is, there must be a place of registration. It must be in a country to abide by the laws of the country, so that if there is a legal dispute later, there is a law to follow. The investor who participates in the project, the part that benefits from the investment, is directly withheld by the exchange or the wallet when the seller sells the tax. The tax is classified according to the nationality of the investor , because although the investment has no national border, the investment People have national boundaries . Of course, this part may require the cooperation of multiple institutions such as exchanges, wallets, and merchants.

In the final analysis, no matter how decentralized, the project is ultimately a real person involved, production is produced by a real person, the transaction is made by a real person, and the benefits are given to one by one. Realistic people.

No matter how chained, how to decentralize, and ultimately have a relationship with real life, it is necessary to land. Since the concept of legal person has slowly begun to blur, then it should begin to take individuals as the main body, since If the supervision of the territories is difficult, then slowly switch to the personal principle, so that the regulatory ideas will be much clearer.

Blockchain is not an extraterritorial land, just as the Internet is not a place of extrajudiciality. In fact, in the blockchain supervision, you can also learn from the road that the Internet has traveled in the past. When the Internet was not developed, it was also a variety of things and information. However, with the rapid development of the Internet, the "E-commerce Law" was subsequently formulated. Nowadays, Internet information, commerce, and finance are all still under order.

5. In addition to supervision, the government can do a few things.

Supervision is only one aspect. The government's functions may face greater changes in the future. Of course, these are the future. In addition to supervision, the previous government can also do the following things. On the one hand, it facilitates the development of the blockchain industry, and on the other hand, it facilitates the government to conduct better supervision.

First, the government can implement a digital identity system.

Regardless of whether the digital identity system exists in the form of a blockchain, digital identity is necessary, and this digital identity needs to be able to interface with the current blockchain system.

The digital identity system promoted by the government has higher credibility on the one hand, and more convenient connection of major blockchain projects with real life; on the other hand, it facilitates the government to carry out identity management, government administration, taxation, public The conduct of services and other services.

Second, the government can issue legal digital currency.

At present, the stable currency in the digital currency field still has relatively large defects. Although there are many types of stable currency, and the market share of USDT is not low, the USDT is not open and transparent and does not accept audits, so that the public cannot fully trust it. The market share of other stable currencies is not high enough, and the USD is the anchoring standard, which also caused some difficulties for the RMB to enter the market.

The digital currency in which the country issues legal currency should be a future trend. Although it may not be completely distributed in the form of a blockchain, the most important characteristic that this digital currency should have is programmable.

The implementation of digital legal currency can improve the efficiency of currency operation and reduce the cost of currency issuance; on the other hand, it can open up the most important step in the connection between blockchain and reality; more importantly, it can effectively manage financial risks such as capital outflow and money laundering. And it also helps the renminbi to become international.

These two are the necessary infrastructure for the development of the blockchain, and these things can only be done by the government to a large extent, so that on the one hand, the blockchain can be rapidly developed and integrated with real life, on the other hand, The follow-up supervision of the government has laid a good institutional foundation.

Summary

1. The blockchain is not a savage beast. It is just a technical tool, just like the Internet of the year. 2. Bitcoin is not a savage beast, it can increase national wealth and benefit all people; 3. Pass is not a savage beast, it is digital An equity carrier that allows value to flow freely.

a. Dilute the concept of legal person, strengthen the concept of individual; b. Desalination of the concept of territoriality, strengthen the concept of personal; c. Mainly on the chain, supplemented by chain supervision.