Blockchain – and the world – explanation – POLITICO

The rate of change and innovation in the blockchain space can be disorienting. New cryptocurrencies, new types of assetseven completely new organizational ideas like DAO constantly appearing all over the world – and constantly burning.

This is a culture that is not only calm about change and destruction, but also obsessed with them.

This is one part of what we cover in this newsletter. The other part is the legislators in Washington DC and Brussels, the people who have to worry about this and who are constantly frustrating blockchain businesses with the much slower pace of the government.

Innovators in the crypto world want more clarity in regulating things like what digital assets count as securities. big topic at the DC Blockchain Summit last week. They want quick answers, or they want the old institutions to just get out of their way.

The two cultures may seem almost completely incompatible – the pretenders and the old guard; future and past.

But for people on both sides of the divide, there is a useful theory to keep in mind. The theory says that this tension is not just normal, but a virtue – they must move at different speeds, and this is a sign that the large system as a whole is working.

The theory is a stratification of rates, an idea by Stuart Brand, a writer and thinker best known as the publisher of the Whole Earth Catalog, who devoted most of his life to thinking about how big and complex systems thrive or not.

The brand is passionate about cryptocurrencies, but his theory is not about the blockchain as such – he explored it in book and again in paper published several years ago. He proposes that sustainable civilizations change through the interaction of six different layers, each moving at its own pace, from the most dynamic and fleeting layer (which he calls “Fashion/Art”) to the slowest and most stable (Nature).

It is reasonable to see that Bitcoin lives mainly in the upper layers. Brand’s schemes are somewhere between fashion and the next fastest level, ‘commercial’, while the regulators live two levels down, in the slower realm of ‘management’.

Brand argues that change happens quickly at higher levels, but most of the power and strength of the system resides in the slower lower layers. “In a stable society, each level is allowed to work at its own pace,” he writes, “safely supported by slower levels below and reinforced by busier levels above.”

It can be seen that all six levels are of great importance for crypto-speaking. There is art/fashion (think of the NFT mania), commerce, and then infrastructure, which in this case includes both telecommunications networks and the entire financial system, which blockchain may or may not seriously disrupt.

Beneath them lives Governance and then Culture and finally Nature, which may seem immune to these lighter human concerns, but is affected by the blockchain’s appetite for energy and may eventually react with some disruptions of its own.

So, all our readers, no matter what stratum they live in, must learn to enjoy life with each other. Despite the dizzying pace of blockchain news, it will be a long and somewhat slower journey.

Fortunately, Brand himself has no shortage of ideas on how to solve the big dilemmas that blockchain poses to various levels. Last month he offered this panacea on twitter:

It seems that with the right mental structure, complex civilizational changes can be managed with 280 characters or less.

One of the main arguments of crypto promoters is that the energy consumption required for mining is actually help fight against climate changeencouraging the industry to add additional renewable capacity.

In New York State, it’s time to talk about money.

Early this morning, the New York State Legislature passed two-year moratorium on new proof-of-work cryptocurrency mining powered by fossil fuel power plants, becoming the first state in the country to impose formal restrictions on the use of cryptocurrency energy. This is a blow to the nascent crypto lobby, which has spent serious sums of money fighting the bill, and a big win for environmentalists who are lobbying for the spread of technology that they believe has little social benefit to justify their lust for electricity.

They share this sentiment with someone who will be an important player in the coming battles against cryptocurrencies: Rostin Behnamchairman of the Commodity Futures Trading Commission, who said POLITICO Sustainability Summit last month that there was “a clear mismatch between the use and generation required to mine these coins and the economic returns that we are seeing from the digital assets themselves.”

Cryptoworld, of course, disagrees: in a statement after the adoption of the moratorium Kristin Smith, executive director of the major crypto policy group Blockchain Association, said it would have “a chilling effect on crypto mining in the state and threaten to send hundreds of well-paying jobs to neighboring states.” The claim is not unfounded: cryptocurrency mining has revived jobs in the energy sector from Montanain Kentucky. The moratorium in New York will not require the closure of any factories, but their growth ostensibly represents a precise technological upgrade of post-industrial, unlucky cities. protected Governor of New York, native of Buffalo. Kathy Hochul.

Which causes another tension that the moratorium is causing: the growing divide between parties in cryptopolitics. Kentucky is far from banning new crypto mining tax incentives and energy credits miners; Wyoming accepted many crypto-friendly rules to promote the industry.

Treat growing partisan rift as unrelated to crypto as suchbut the energy that feeds it, this split makes a lot of sense.

But it’s never easy when it comes to new technologies and all the economic and social problems that come with them: some Democratic lawmakers are promoting the technology as providing valuable services to minority communities traditionally unbankedand even his own Democratic Senator from New York. Kirsten Gillibrand appeared on POLITICO panel in March promote the bill expected next weekclarification of the legal and regulatory framework in the field of crypto-currency – together with the senator of the state of Wyoming. Cynthia Lummis. – Derek Robertson

Who said that Congress can’t do anything? A bipartisan privacy bill is finally on the horizon, and POLITICO’s Rebecca Kern there is a report:

Congress has tried unsuccessfully for decades to pass legislation to protect the privacy of Americans’ data. A bipartisan bill released today by key congressional leaders suggests lawmakers are finally close to making that happen.

If it becomes law, the “American Privacy and Data Protection Act,” as the bill is called, will provide a national standard for what data companies can collect from individuals and how they can use it.

The bill, published Friday, includes for the first time an agreement between Republicans and Democrats on two areas that blocked previous efforts: whether federal privacy law can take precedence over state laws and whether people should have the right to sue companies that illegally share with your information. data or use it in ways prohibited by law.

POLITICO Global Insider Newsletter is all about technology today, while Ryan Heath and Mark Scott provided a global perspective on everything from privacy policy to smartphone manufacturing and sales to China’s box office. As European regulation of technology progresses, America may well follow suit tomorrow – the US can take decisive action on this policy now, but only in response to a much more active digital framework created by the EU. Read their preview of President Biden’s upcoming transatlantic privacy shield executive order and check out the rest below. newsletter here:

Expect specific details on “necessary and proportionate” restrictions on how US national security agencies can access both European and US data… it’s easier to accept this principle than it is to systematize the practice of restricting data collection by intelligence services.

The end result will not be the victory many privacy campaigners want, but it will be an acknowledgment that Edward Snowden exposed the data-collection abuses that many of these agencies still suffer from.

Crucially, this outcome will create the specific language needed by the EU to defend its defense in court. As Scott writes, “It will be harder for Europe’s highest court to determine that the new pact goes against the fundamental right of the 27-nation bloc to privacy,” setting another example of the ongoing European precedent for how US regulators handle our own. emerging, world-changing technologies. – Derek Robertson

Stay in touch with the entire team: Ben Schrekinger ([email protected]); Derek Robertson[email protected]); Konstantin Kakaes (ur.[email protected]); and Heidi Vogt ([email protected]).

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Ben Schrekinger writes for POLITICO on technology, finance and politics; he is a cryptocurrency investor.