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Some in the blockchain industry are predicting the end of law, regulation, and even government due to the decentralization features and benefits of blockchain technology.
An anarcho-capitalist world is envisioned by those who see that cryptography can seal property and economic transactions between humans without the need of trusted third parties.
But, this can’t be further from the truth with regards to law.
There have always been natural forces and elements; such as gravity, light, the continents, the oceans, and the atmosphere; that have been decentralized and trust minimized, but that never reduced nor eliminated the need for law and government between humans.
In this post we contrast the status of people and Ethereum Classic (ETC) with regards to these topics.
Human action must be governed by rules, this cannot be delegated to blockchains. Genes have embedded rules that define the organism, and the organism has embedded rules that generate the culture of groups and societies.
Culture is defined by beliefs and religion, and religion always contains the natural moral and ethical laws that are to be followed by humans.
As tribes turned into city states, and city states into nations, we developed complex systems with constitutions, legislative bodies, laws, and law enforcement.
Whether human action is conducted on trust minimized platforms or not, that each man or woman is doing what is right or wrong, what is legal or ilegal, or what is disputable or not, is entirely a different thing.
Similarly, whether a person has control of a private key and sends a transaction to Ethereum Classic has nothing to do with law.
ETC is governed by an unbreakable protocol that starts with a set of principles by its designers, then those principles are defined in the protocol rules, which constitute a logical system of actions and reactions that reinforce each other and are completely consistent.
Protocol rules give rise to the phenotype of Ethereum Classic, which is the ledger, the accounts, the structure and standards of smart contacts, and the EVM, which in itself is a sort of physical container and implementer of the rules.
Cryptography is like the strong bones, thick skin, fangs, and claws of the system, which are its defense mechanism that makes it practically impossible to break into its components.
Proof of Work is the signaling system that keeps the whole network together, but at the same time ensures that all components may connect and disconnect autonomously and without any restrictions.
ETC’s monetary policy seals the whole platform by providing incentives that, the more they are followed, the stronger they get, therefore the more unbreakable the system becomes.
Nevertheless, although ETC is completely objective and separated from the law, the intersection between the blockchain and human action will always need to be mediated by law.
Monetary supply: ETC is digital gold, but whether it may be used to cancel debts depends on legal tender laws in all nations.
Paying taxes: Trading and investment in ETC, ERC-20 tokens, and NFTs may happen inside the decentralized network, but tax laws are as inevitable as death!
Hacking accounts or private keys: Thousands of people and businesses have been hacked, or their keys have been stolen, or they left them somewhere exposed. The only way to recover crypto assets in such cases is through criminal law and law enforcement.
Custody: An enormous portion of ETC and other coins are held in custody by third parties such as exchanges and custodians. This all depends on securities and banking laws.
Property registries: As NFTs become real estate, land, vehicles, boats, containers, works of art, airplanes, and other assets of the physical world, ETC will be the property registry of these objects. However, to be recognized as such, and whether those objects are rightfully owned, is an exclusive prerogative of the law. ETC only guarantees the trust minimized physical possession and control.
Inheritance: As crypto asset owners, which will include all the types of assets listed in the previous point, will want to do their estate planning, inheritance and trust laws will actually govern and determine how smart contracts will be set up, not the other way around.
In Ethereum Classic, as long as transactions and smart contracts are sent according to protocol rules, they will always be executed.
Whatever is the legal situation outside of the blockchain is a totally separate thing.
This is the incredibly valuable guarantee that ETC brings to the world, a completely neutral and programmable monetary system that functions just as the timeless natural forces and elements that humanity has been successfully using for millions of years.
And, people will always be governed by law, regardless of decentralized or trust minimized platforms.
Thank you for reading this article!
To learn more about ETC please go to: https://ethereumclassic.org