Every Friday, Law Decoded provides an analysis of the week’s critical political, regulatory, and legal stories.
The concept of monopoly will rule in today’s decoded law. Basically, blockchain technology is about distributing inputs and outputs of information in a secure manner. In its very young life cycle it has been shown that technology based on this very simple principle has unlimited applications.
Decentralization is a secondary principle, and in this way blockchain technology by nature seems to be opposed to monopolies. The big challenge of the Bitcoin White Paper was to find a way to move value between the parties without getting lost in this proverbial valley between two Byzantine generals OR the trap of a third party. That doesn’t mean that every company working on blockchain is morally founded to reject the possibility of monopolizing its market. However, the technology holds promise for addressing a wide range of concentrated performance, particularly in a digitizing world.
This week there was a cartel conflict between major tech advocates and the government. While these encounters were hostile, they are unlikely to do any significant damage to anyone’s bottom line. There have also been some new ramifications for the abuse of monopolized money power, a system that is unlikely to change very soon either. The good thing about a monopoly is that once you have it, it is very difficult for others to take it away from you. But these are power groups that seem pretty obvious as places you want to decentralize.
Kollen Post, Policy Editor, @the_postman_
Governments bring major technologies to cartel practices
The CEOs of the four American tech drivers – Apple, Amazon, Google and Facebook – virtually appeared before Congress on Wednesday to raise charges of monopoly.
The release of the second quarter earnings reports on Thursday shows the increase in sales for each company, except that Google has done nothing to win the sympathy of these companies. This despite the efforts of the CEOs during the hearings to represent their companies and individual biographies when the American dream came true.
The past half decade has destroyed the public image of technology in the United States. Increasing dystopian disclosures of data collection practices and brutal campaigns to suppress competition have led to a widespread backlash against Silicon Valley. The role of social media in the 2016 elections and subsequent waves of disinformation (including COVID-19) also ended every honeymoon period that companies like Facebook and Twitter enjoyed.
Meanwhile, China, whose digital payment providers are widely praised in front of those currently used in the United States, appears to be taking action against these providers based on similar antitrust principles. For China, however, this could at least partially pave the way for the widespread introduction of a digital yuan.
Many of these technology giants are so deeply rooted that they may be too big to fail. There is no denying that they provide services that have changed the way we live. As Mark Zuckerberg emphasized last night during the Facebook investor call, this shift to telework would not have been possible if the COVID-19 pandemic had taken place two decades ago, and many more people would die. However, recent events should make many people wonder whether these huge companies are the best we can do and whether we could be better served by looking for decentralized alternatives.
… and maybe the central bank monopolies are the following?
Even in the United States, The Federal Reserve printer continues to operate, overcoming the country’s total money pressure in the first two centuries of its existence within a month. The dollar appears to be on the ropes for the first time during this pandemic.
Quantitative easing, the formal term for the Fed’s use of inflation as a source of funding at the expense of all existing dollars, is the recurring villain in Bitcoin’s stories. The idea is that this must ultimately lead to a monetary breakdown.
With exceptional spending in the United States in recent months, the dollar has stubbornly resisted these stories, but according to recent analysis, this is changing. At the beginning of the pandemic, global financial institutions and governments hurried to get themselves dollars, which increased demand and value despite new entrants. But this week, as Congress considers another major stimulus bill, the dollar fell to its lowest level since May 2018.
We are not experiencing a collapse of the monetary system, but certainly a tension that, if it continues, will question whether the Fed really knows what it is doing. At the same time, the head of the country’s most important banking regulator is calling on blockchain-based challengers to the Fed’s central role in payments.
The world’s five largest reserve currencies now want to be digitized
With China and the US dominating the headlines focusing on potential central bank digital currencies (CDBC) and various banks in the European Union starting their own tests, the remaining two of the world’s five largest currencies are important steps you have taken that point to the same interest in digitization.
The Bank of Japan announced that it has appointed its chief economist to a team that is researching the digital yen. Meanwhile, The Bank of England turned to Accenture to update UK payment system technology without explicitly referring to a CBDC. However, Accenture is instrumental in developing CBDCs worldwide, including the digital dollar.
The dollar, the euro, the yen, the pound sterling and, from 2016, the yuan form the basis for the special drawing rights of the International Monetary Fund and the backbone of the world’s reserves. None of the five still does business with a CBDC. but it is clear that everyone is concerned about being left out. CBDC technology is not yet a standard, but at least research into this technology has become necessary for those who want to maintain their prestige.
The American Enterprise Institute’s Cryptocurrency Expert VisitorJim Harper talked about digital dollars and new payment systems.
Coin center, leading in lobbying and research for decentralized networks, updated its educational resources.
Kelman Law, explains the basics of paying taxes on both cryptocurrency income and capital gains from trading in the U.S.