Manifesto on Defense of Blockchain
Manifesto on Defense of Blockchain
To the Honorable Congress and President of the United States of America
(Addition: 10Apr19. We support the "Token Taxonomy Act of 2019," HR 2144, introduced by Congressmen Davidson and Soto. We urge that the sale or exchange of tokens for other than cash or cash equivalents (Section 9) be amended to entirely exempt taxation, until an exit into fiat on a regulated exchange. This would greatly simplify accounting, reporting and compliance. Clarify the tax implication of the various kinds of income: minting new coins, proof of stake, and passive staking.)
We, the global blockchain community, a heterogenous and global group of people from all layers of many different societies, cultures and religions hereby respectfully bring your attention to an urgent matter brought about by a revolutionary technology that may help to solve some difficult economic and political challenges. Our community includes natural and social science artisans as well as lay people who all meet around a common goal of creating a more fair and just world where wealth and decision power is more democratically distributed and where the individual is asked to actively contribute to building a better future for all.
Blockchain (Distributed Ledger Technology) is a new innovation as revolutionary as the introduction of double ledger bookkeeping approximately 500 years ago.
Distributed Ledger Technology
1. Blockchain is a network technology implementing a public ledger that allows parties to conduct transactions with each other without relying on a central trust, for example a bank or sovereign intermediary. One application of this technology is the so-called “cryptocurrencies” or “tokens.” Cryptographic tokens may transform vast areas of the economy as they enable, for example micro payments and loans, fractional property titling, efficient tax collection, more efficient supply chain logistics (e.g. food and drug safety), and many others. Moreover, some cryptographic tokens take the technology one step further and even enable self-governance on the blockchain, through electronic voting, dynamic delegation of powers and responsibilities, and electronic courts/arbitration/oracles.
Cryptocurrencies are essentially cryptographic keys, and tokens are software contracts that give guaranteed properties to those that invoke them. If we consider a “firm” to be a “nexus of contracts,” a blockchain enables its equivalent to be implemented in automata logic rather than lexical construct. These and many innovations to come are just the start of the technological revolution blockchain represents. Blockchain today is where the Internet was in the early 1990s.
New Model of Capital Raising
2. This powerful, incipient technology has risen up out of self assembled communities that fund themselves by raising capital among community members, frequently referred to as an ICO, or Initial Coin Offering. This act of self-assembly and joint effort is similar to angel venture investing, where a high risk technology is supported at an embryonic stage. This new way of raising capital, through distributed, joint effort centered on a utility token for network function and governance, has come under regulatory scrutiny as falling under the Securities Act of 1933.
We urge Congress to amend the Securities Act of 1933 to carve out a safe harbor for this new way of raising capital and implementing distributed governance. We envision a safe harbor as the creation of a new “Utility Asset Class” (UAC) which requires four properties: function; governance; multiple, independent nexus of control; and public commons. A sufficient number of holders of a UAC must utilize and put at risk the asset to enable essential functions of the platform, without which the network would cease to function; the UAC must be required for technical governance of the platform; the UAC platform must be administered by multiple, independent, non-related parties that have a coherent focus on promoting and developing it; and, the UAC must enable a platform that is an open, public commons, to which a legitimate right of access and participation can be claimed by mere possession of the UAC.
Positive Protections Through Community Cooperation
3. While Initial Coin Offerings bring great opportunities for broad innovation, technological advancement as well as societal benefits, bad actors, as in other industries, are plentiful. Blockchain communities are becoming more adept at researching and recognizing the scams and often do so well ahead of government agencies. From a community perspective, there should be no room for bad actors and criminal acts. In fact, most blockchain communities take a firm stand against such behavior and would welcome thoughtful regulation that does not impede innovation and the new funding model as described above. Fortunately, blockchain technology lends itself well to transparency and oversight.
We Welcome Fair Access and Diligence
4. The blockchain community fully agrees with the intent of the Securities Act of 1933, to prevent malicious actors bringing harm to unsophisticated investors. We applaud the intent and believe the same diligence should be exercised in the capital formation for blockchain, with robust education and coordination by the U.S. Securities and Exchange Commission (SEC) and blockchain communities. We expect the SEC to implement reasonable regulations with respect to the new Utility Asset Class. Notably, regulation should be put in place such that the less wealthy of society can benefit greatly from venture capital investing and thereby aligning the basic rights of common people with those of more traditional “sophisticated, accredited investors.” While the original intent of the SEC policy has been protection, it has had the perverse effect of gating access to the most valuable stage of investing to the wealthy and connected. This public policy encourages unequal distribution and formation of wealth.
Profound Societal Benefits; Possibility to Subvert Income and Asset Inequality
5. Blockchain is a human, technical, scientific and social adventure. We expect the benefits of blockchain technology to be profound on society, so revolutionary that it could create a more just economy and polity and solve many of the shortcomings of the current systems. The societal benefits are so great that it warrants the government and courts acting with restraint and carving out a safe harbor for this new area of technology and law.
Blockchain will allow the most humble to participate in venture investing, which now is reserved to those with money, so that the rich get richer for being rich. Blockchain will also allow a new kind of political governance, Liquid Democracy, where a community may govern itself by using blockchain to manage voting and the allocation of resources and taxation in a more fair and equitable manner. Liquid democracy may allow us to overcome the challenges of previous democratic models(e.g. rational ignorance, stranded interests), while ensuring power inheres to the hands of the people
Tax Rationalization
6. We ask the Congress to rationalize blockchain and crypto asset taxation by establishing a 0.1% Tobin Tax on all conversions, including from crypto to crypto and crypto to fiat, and to work with other countries to establish this taxing scheme as a standard worldwide, with the tax apportioned to the taxing authorities indicated by the certified KYC/AML residency of the ultimate natural person beneficiaries. With the establishment of this Tobin Tax, all other taxation, including income, property and capital appreciation should be removed. The current mechanisms of blockchain are so technical and dispersed that the current model of taxation is likely to fail in the future as quantum cryptography takes hold, and identity and location become blurred. Collection at all central and distributed exchanges is an efficient and fair way to collect taxes. The tokens themselves are capable of compliance, regulation, taxation, jurisdiction and any other number of requirements integral to their execution. Such properties are so far advanced than untrackable movement of sovereign money that problems such as money laundering, crime financing, tax evasion and a host of other ills are likely to become extremely difficult. What is lacking are global, coherent, rational, updated laws and regulations.
Tax rationalization will accelerate blockchain’s rapid adoption and penetration into the world economy, and vault the United States of America as a an epicenter and leader of innovation.
US and European Government Studies Show Blockchain Has Profound Potential
7. We call attention to “The 2018 Joint Economic Report” of the “Joint Economic Committee, Congress of the United States” to the President of the United States, Report 115-596, Chapter 9, as a thorough understanding of the implications of blockchain and its future profound benefits.
We call attention to the European Parliament Committee on Industry, Research and Energy
draft motion for a resolution, 2017/2772(RSP), and its enlightened position.
Our future is an emergent fate. Here with blockchain, we can build a fair, progressive, inclusive society by leveraging technology to deliver to our children things we have grasped at for generations.
We the people, having brought forth this technology from our own community efforts,
urge the governments of the world to respect the self-sovereign will of the people and follow their lead into the future.
Globalize this Petition
We welcome citizens from around the world taking this petition, translating it and adapting it to local laws and legislatures and managing the petition in your country or region. It is advisable to keep as closely as possible to the spirit and wording of this petition, so that legislators taking the matter up begin from one global, coherent proposal.
24 June 2018
Global Blockchain Defenders
global.blockchain.defenders@gmail.com
Signers not resident in the United States can direct their petition to the co-chairs of the Congressional Blockchain Caucus. Use the following Zip and address:
Colorado Rep. Jared Polis (Zip Code: 80302)
BOULDER OFFICE
1644 Walnut St.
Boulder, CO 80302
Telephone: 303-484-9596
Arizona Rep. David Schweikert (Zip Code: 85260)
Scottsdale Office
10603 North Hayden Rd. Ste. 108
Scottsdale, AZ 85260
Telephone: 480-946-2411
To the Honorable Congress and President of the United States of America
(Addition: 10Apr19. We support the "Token Taxonomy Act of 2019," HR 2144, introduced by Congressmen Davidson and Soto. We urge that the sale or exchange of tokens for other than cash or cash equivalents (Section 9) be amended to entirely exempt taxation, until an exit into fiat on a regulated exchange. This would greatly simplify accounting, reporting and compliance. Clarify the tax implication of the various kinds of income: minting new coins, proof of stake, and passive staking.)
We, the global blockchain community, a heterogenous and global group of people from all layers of many different societies, cultures and religions hereby respectfully bring your attention to an urgent matter brought about by a revolutionary technology that may help to solve some difficult economic and political challenges. Our community includes natural and social science artisans as well as lay people who all meet around a common goal of creating a more fair and just world where wealth and decision power is more democratically distributed and where the individual is asked to actively contribute to building a better future for all.
Blockchain (Distributed Ledger Technology) is a new innovation as revolutionary as the introduction of double ledger bookkeeping approximately 500 years ago.
Distributed Ledger Technology
1. Blockchain is a network technology implementing a public ledger that allows parties to conduct transactions with each other without relying on a central trust, for example a bank or sovereign intermediary. One application of this technology is the so-called “cryptocurrencies” or “tokens.” Cryptographic tokens may transform vast areas of the economy as they enable, for example micro payments and loans, fractional property titling, efficient tax collection, more efficient supply chain logistics (e.g. food and drug safety), and many others. Moreover, some cryptographic tokens take the technology one step further and even enable self-governance on the blockchain, through electronic voting, dynamic delegation of powers and responsibilities, and electronic courts/arbitration/oracles.
Cryptocurrencies are essentially cryptographic keys, and tokens are software contracts that give guaranteed properties to those that invoke them. If we consider a “firm” to be a “nexus of contracts,” a blockchain enables its equivalent to be implemented in automata logic rather than lexical construct. These and many innovations to come are just the start of the technological revolution blockchain represents. Blockchain today is where the Internet was in the early 1990s.
New Model of Capital Raising
2. This powerful, incipient technology has risen up out of self assembled communities that fund themselves by raising capital among community members, frequently referred to as an ICO, or Initial Coin Offering. This act of self-assembly and joint effort is similar to angel venture investing, where a high risk technology is supported at an embryonic stage. This new way of raising capital, through distributed, joint effort centered on a utility token for network function and governance, has come under regulatory scrutiny as falling under the Securities Act of 1933.
We urge Congress to amend the Securities Act of 1933 to carve out a safe harbor for this new way of raising capital and implementing distributed governance. We envision a safe harbor as the creation of a new “Utility Asset Class” (UAC) which requires four properties: function; governance; multiple, independent nexus of control; and public commons. A sufficient number of holders of a UAC must utilize and put at risk the asset to enable essential functions of the platform, without which the network would cease to function; the UAC must be required for technical governance of the platform; the UAC platform must be administered by multiple, independent, non-related parties that have a coherent focus on promoting and developing it; and, the UAC must enable a platform that is an open, public commons, to which a legitimate right of access and participation can be claimed by mere possession of the UAC.
Positive Protections Through Community Cooperation
3. While Initial Coin Offerings bring great opportunities for broad innovation, technological advancement as well as societal benefits, bad actors, as in other industries, are plentiful. Blockchain communities are becoming more adept at researching and recognizing the scams and often do so well ahead of government agencies. From a community perspective, there should be no room for bad actors and criminal acts. In fact, most blockchain communities take a firm stand against such behavior and would welcome thoughtful regulation that does not impede innovation and the new funding model as described above. Fortunately, blockchain technology lends itself well to transparency and oversight.
We Welcome Fair Access and Diligence
4. The blockchain community fully agrees with the intent of the Securities Act of 1933, to prevent malicious actors bringing harm to unsophisticated investors. We applaud the intent and believe the same diligence should be exercised in the capital formation for blockchain, with robust education and coordination by the U.S. Securities and Exchange Commission (SEC) and blockchain communities. We expect the SEC to implement reasonable regulations with respect to the new Utility Asset Class. Notably, regulation should be put in place such that the less wealthy of society can benefit greatly from venture capital investing and thereby aligning the basic rights of common people with those of more traditional “sophisticated, accredited investors.” While the original intent of the SEC policy has been protection, it has had the perverse effect of gating access to the most valuable stage of investing to the wealthy and connected. This public policy encourages unequal distribution and formation of wealth.
Profound Societal Benefits; Possibility to Subvert Income and Asset Inequality
5. Blockchain is a human, technical, scientific and social adventure. We expect the benefits of blockchain technology to be profound on society, so revolutionary that it could create a more just economy and polity and solve many of the shortcomings of the current systems. The societal benefits are so great that it warrants the government and courts acting with restraint and carving out a safe harbor for this new area of technology and law.
Blockchain will allow the most humble to participate in venture investing, which now is reserved to those with money, so that the rich get richer for being rich. Blockchain will also allow a new kind of political governance, Liquid Democracy, where a community may govern itself by using blockchain to manage voting and the allocation of resources and taxation in a more fair and equitable manner. Liquid democracy may allow us to overcome the challenges of previous democratic models(e.g. rational ignorance, stranded interests), while ensuring power inheres to the hands of the people
Tax Rationalization
6. We ask the Congress to rationalize blockchain and crypto asset taxation by establishing a 0.1% Tobin Tax on all conversions, including from crypto to crypto and crypto to fiat, and to work with other countries to establish this taxing scheme as a standard worldwide, with the tax apportioned to the taxing authorities indicated by the certified KYC/AML residency of the ultimate natural person beneficiaries. With the establishment of this Tobin Tax, all other taxation, including income, property and capital appreciation should be removed. The current mechanisms of blockchain are so technical and dispersed that the current model of taxation is likely to fail in the future as quantum cryptography takes hold, and identity and location become blurred. Collection at all central and distributed exchanges is an efficient and fair way to collect taxes. The tokens themselves are capable of compliance, regulation, taxation, jurisdiction and any other number of requirements integral to their execution. Such properties are so far advanced than untrackable movement of sovereign money that problems such as money laundering, crime financing, tax evasion and a host of other ills are likely to become extremely difficult. What is lacking are global, coherent, rational, updated laws and regulations.
Tax rationalization will accelerate blockchain’s rapid adoption and penetration into the world economy, and vault the United States of America as a an epicenter and leader of innovation.
US and European Government Studies Show Blockchain Has Profound Potential
7. We call attention to “The 2018 Joint Economic Report” of the “Joint Economic Committee, Congress of the United States” to the President of the United States, Report 115-596, Chapter 9, as a thorough understanding of the implications of blockchain and its future profound benefits.
We call attention to the European Parliament Committee on Industry, Research and Energy
draft motion for a resolution, 2017/2772(RSP), and its enlightened position.
Our future is an emergent fate. Here with blockchain, we can build a fair, progressive, inclusive society by leveraging technology to deliver to our children things we have grasped at for generations.
We the people, having brought forth this technology from our own community efforts,
urge the governments of the world to respect the self-sovereign will of the people and follow their lead into the future.
Globalize this Petition
We welcome citizens from around the world taking this petition, translating it and adapting it to local laws and legislatures and managing the petition in your country or region. It is advisable to keep as closely as possible to the spirit and wording of this petition, so that legislators taking the matter up begin from one global, coherent proposal.
24 June 2018
Global Blockchain Defenders
global.blockchain.defenders@gmail.com
Signers not resident in the United States can direct their petition to the co-chairs of the Congressional Blockchain Caucus. Use the following Zip and address:
Colorado Rep. Jared Polis (Zip Code: 80302)
BOULDER OFFICE
1644 Walnut St.
Boulder, CO 80302
Telephone: 303-484-9596
Arizona Rep. David Schweikert (Zip Code: 85260)
Scottsdale Office
10603 North Hayden Rd. Ste. 108
Scottsdale, AZ 85260
Telephone: 480-946-2411
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