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Proposal: Legal (Sept)

Discussion in 'Pre + Budget Proposal Discussions' started by Ryan Taylor, Aug 30, 2016.

  1. FungibilityMan

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    Thats not a half bad idea.... seems to me yes/no votes create alot of confusion about general direction of Dash and simplifies it too much, IMO.

    :D
     
  2. GrandMasterDash

    GrandMasterDash Well-known Member
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    ... and collusion among MNO's is still going to be a concern, just like mining.
     
  3. David

    David Well-known Member
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    True, the masternodes can decide to change the system. But why would they vote to take power away from themselves? Sybil attacks are avoided by requiring ownership of 1000 DASH per vote...even a person like Otoh with $4.5 million in DASH only has about 10% of the total votes.

    The number of maximum votes is not hardcoded; it's simply TOTAL DASH IN EXISTENCE / 1000. The 1000 DASH per MN number is hardcoded and arbitrary, but not the maximum number of votes. Remember, the DASH DAO is being modeled after what has already been proven to work in the real world (corporations with shareholder votes, in which one share = one vote). Why reinvent the wheel? Further, shouldn't voting power be proportional to money at stake? If I have $1,000,000 invested in DASH, shouldn't I have proportionally more votes than somebody with $15,000 invested?

    About a year ago, Elbereth said that Evan had 270 nodes. He's been very generous in using his own funds for various things (such as paying 1176 of his own DASH to Core Team last December when the budgets didn't finalize, and also covering about half the costs of his early conference trips that were not fully covered by the budget system). The person with the most votes is Otoh, who has reduced his nodes from 450 to about 400 in the last year. He also abstains from voting on most proposals in order to keep from having undue influence.
     
  4. demo

    demo Well-known Member

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    Please read carrefully what I have said. I am not talking about the number of maximum votes in dash. I am talking about the number of maximum votes a unique person or organization should be allowed to have!

    The number of maximum votes is of course TOTAL DASH IN EXISTENCE / 1000 (1000 is also a hardcoded number, but lets discuss this later). But the maximum votes a unique person or organization should be allowed to have is currently set to the number of maximum votes, and this is hardcoded.

    Proposals pass when 10% is reached (10% is also a hardcoded number, but lets discuss this later). Is it correct for a unique person (or centralized organization) to be allowed to have 10% of the votes thus be able to pass whatever proposal he wishes? Especially if he cast his votes the last minute this is very probable.....

    What if the United States decides to buy 51% of dash votes. They have the money to buy whatever they want, they print dollars the way you printed dash, for free. Are you going to allow this? You will sell dash if decentralization is NOT one of your core values, but you will not allow this to happen if decentralizaion is one of your core values. So let those who believe in decentralization, and those who dont care about it, to vote about the maximum votes someone should be allowed to have, and let them vote using numbers.
     
    #34 demo, Sep 2, 2016
    Last edited: Sep 2, 2016
  5. David

    David Well-known Member
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    The 1000 Dash (and the 10% threshold) are both hardcoded arbitrary numbers, I agree.

    Technically 10% net votes is simply the minimum threshold to pass, which works fine if the budget isn't full. If the budget is full, then the actual threshold is NET VOTES OF LEAST SUPPORTED PASSING PROPOSAL + 1. Right now, by voting at the last possible second before budget finalization, a person with 10% of the vote could give himself exactly 50 DASH. To vote himself a payment of 275 DASH would require just over 13% of net votes (666 votes). Seizing the entire budget would require 45% of the votes (1792).

    Hypothetically, let's say we have a person with 1792 votes, which is at least 1,792,000 DASH. He could, at most, steal 7,450 DASH in one month which would increase his DASH holdings by 0.4%. It would also probably crash the value of DASH, so if you're economically motivated, it's a loss.

    If a state actor or other entity attempted to by 51% of the DASH in existence, the value of DASH would soar so high that we could all cash out as very rich individuals. We could then launch an exact duplicate of the DASH network, a fork, and continue about our business without any government ownership of our coins...unless they wanted to buy up that entire supply as well. Then it's rinse, repeat.

    In any event, how would you limit the number of votes a person can cast? The only way to do that would be to require registration by social security number, which nobody would do. No other method would work...VPNs get around IP restrictions, email addresses are easy to Sybil...

    It's the same problem Ethereum had when it came to their crowdsale. They very much wanted to keep any one person from buying "too much" ether, but couldn't figure out a way to do that.
     
  6. demo

    demo Well-known Member

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    Of course there is a method that works. You can organize cryptoparty assemblies, where people appear physicaly and give their digital credentials without revealing their identity or give any social security number.

    You can organize an assembly (once every 2 years for example), where all masternode owners should appear physically and ask their number of votes, as long as they can prove to the others how many masternodes they own. Those masternode owners do not need to present any social security number, and in case the meeting is a closed door meeting, they can also be disguised. The physical presence is what matters, so masternode owners only need to give a nickname of their choice to be accosiated with the number of votes they claim.
     
    #36 demo, Sep 2, 2016
    Last edited: Sep 2, 2016
  7. GrandMasterDash

    GrandMasterDash Well-known Member
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    That's good to hear, thank you. Unfortunately, we can't guarantee future stakeholders will have such morals. To be fair, we could ever guarantee that.. but I do wonder if a sliding scale between votes and profits might be a better option in the long run.
     
  8. David

    David Well-known Member
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    I don't think you're going to get many masternode owners to agree to such a system (I'm certainly not traveling somewhere with my private keys to receive "permission" to vote!). Still worse, however, is the fact that a government or a competing organization could simply kill/arrest/kidnap/steal from anybody who showed up!

    This is very true--you can't count on the altruism of people for something this important. On the other hand, short of making everybody submit social security numbers or present themselves in one physical location to welcome violence against themselves, I don't see how you can implement such a system.

    In time, as the price of DASH increases, some of these large holders will sell (or spend) their DASH and the problem should decrease. In the long run, I think our bigger problem is low voter participation. Even our least controversial, longest running proposal (Core Team payments) has only received votes from under half of all masternode owners!

    Of all the proposals submitted this month, the most "popular" has been voted on by only 28% of the network. How do we solve that? Mandatory voting has a lot of risks, because when people have to do something, they just go in and start voting "yes" to everything (or "no" to everything) in order to get the chore over with...
     
  9. demo

    demo Well-known Member

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    You will not travel with your private keys!

    You will travel with a public key of your choice, printed in QR code. In the assembly, you put this printed public key into a physical ballot box. Everyone who attends the assembly do the same. Then the printed public keys are counted and expected to be equal to the number of people that attend the meeting. Everyone leaves the assembly having the list of all public keys. Those keys are considered now as a proof of individuality, that can be used for now on in the internet in order to prove that you are a real person. Many similar assemblies can be organized in several towns, as long as those assemblies are absolutely concurrent, and a web of trust among those assemblies is established. Having this proof of individuality in your hands, you can now claim in the internet your masternode votes, by signing the public keys of the masternodes with the private key of the printed public key you put into the physical ballot box.

    So there is no fear for someone to steal you in the assembly. If you are afraid that someone may kill/arrest/kidnap you in the assembly, then you can give the printed public key that is about to be put in the ballot box to a lawyer, and send him to attend the assembly on your behalf! :p
     
    #39 demo, Sep 2, 2016
    Last edited: Sep 2, 2016
  10. David

    David Well-known Member
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    Then why couldn't I hire 100 lawyers (or better yet, just 100 regular actors) to go present my public keys in my stead?
     
  11. demo

    demo Well-known Member

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    Because it will make your life difficult, it could be costly, and the more lawyers you hire, and the more cheap they are, the more dangerous is for your secret (of cheating in the assembly by hiring 100 lawyers or actors) to be revealed.

    Additionaly,

    You may also search about proof of identification without revealing your social security number. This can be used for example in order to prove that you own a social security number of a country, without revealing the exact number. This is called zero knowledge proof indetification, and some states (not the US of course) may support this proof for their citizents.

    For example a state may give timestamps of signed documents that their citizents ask, without revealing the name of the citizent. Those states may give time stamped blind signatures to their citizents. If this feature is supported by the state, then if I ask you to give me a timestamp at random time, several times, and you manage to fullfill my request everytime and exactly at the time I asked you, and as quick as possible, then this means that you own a social security number of that state. This is enough of course if you are a single person wanting to prove that you belong to the state. if you are two persons, then you both have to prove that the one's zero knowledge social security number is different to the other's. So a more complicated protocol is needed, and the state must support it.
     
    #41 demo, Sep 2, 2016
    Last edited: Sep 2, 2016
  12. GrandMasterDash

    GrandMasterDash Well-known Member
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    Thinking about what I said, we don't need to prove individuality, we only need people to declare how many MNs they own. People that declare many MNs would receive a larger than normal reward and posses less voting power per node.... while people declaring small numbers of MNs would receive a smaller reward than normal but posses more voting power per node.... and thus it doesn't matter if people lie, they would simply choose what type of democracy they want by deciding between voting power or profits.
     
  13. Ryan Taylor

    Ryan Taylor Well-known Member
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    Laws will apply to the individuals where they live, not where the server operating the masternode is located. My earnings in any other country are taxable in the United States. Also, exchanges located in the US are not going to move themselves to a friendlier locale in order to accept Dash. If we expect people and companies that intend to operate within the law to accept Dash or invest in Dash, we simply need to provide them with guidance about how to operate within the law. For example, if Coinbase were sent a PrivateSend transaction, should it return it? Or is it fine to accept this type of incoming transaction as long as they have no knowledge that it is from an illegal source? Or does that mean the transaction limit is just lower than a regular transaction (e.g., below $1,000 per day per user is a legal money transmitter limit)? I don't know and neither do they.

    We could ask every potential business partner in the US to go hire a lawyer to answer these questions many times over, or we could fund it ourselves once and make it that much easier for potential partners to work with us. The idea is that this is more efficient, and overcomes a barrier that many potential partners would be unwilling to fund independently.
     
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  14. demo

    demo Well-known Member

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    Yes of course, and the same may happen to people who are outside US. Their earnings in US may be taxable in their countries. Does anybody outside US pays VAT in their country when offering their services for the dash budget? Cryptocoins is a way to avoid tax and VAT, this is well known, and this is the main motivation for using cryptocoins. People around the world are risking when dealing with cryptocoins by ignoring the VAT tax. The US dashers should also take some risks, by not informing US state that they have earnings outside US (some non-US states may not tax earnings outside their territory, in that case you are half illegal and a solution may be to leave US citizenship and become a citizent of that state). Are you trying to make dash US-centric?


    You should focus on worldwide businesses that sell products and services and are willing to make exchanges directly in cryptocoins with their customers. You should focus on real people offering services and products eachother, and are willing to exchange cryptocoins for these. Offering services and products directly in cryptocoins without passing through a state's coin or a state's legislation, it is a way to avoid VAT and taxation. This is not legal of course, but this is the power of dash and the rest cryptocoins, that you can avoid laws, tax and VAT. If dash is tottaly recognised by all laws internationally, then it will be taxed, and then why not using dollars or euros or yuan instead of dash? By asking dash to conform totally to the law, you destroy any motivation of using dash.

    You have to explain this to the businesses, that by offering services and products directly in cryptocoins, this is a way to avoid VAT and tax issued by the states. And this is the real power of cryptocoins. Because this makes their products and services cheaper to the customers. If dash conforms only to the US law, and at the same time you ignore the laws of the non-US states (like VAT is), then you are using dash as a medium in order to conquer those rest states by destroying their economical "ecosystem".

    Let you all be dash nation patriots. If you separate between people who want to conform to US laws and people who want to conform to the non-US states laws (that often contradict to the US) , then dash is doomed. Laws contradict eachother among states (VAT is one very good case of it) and if you try to conform to all international and local laws, this will tear dash apart. If you try to conform only to the US laws, this will tear dashers apart.

    This is my "legal" advice. No need to pay 1500 dash to a lawyer to tell you the same thing! If you liked my advice, just give your tip to the universal dividend foundation.
     
    #44 demo, Sep 3, 2016
    Last edited: Sep 3, 2016
  15. demo

    demo Well-known Member

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    Why the forum is asking me a captcha in order to edit the above post?
    When the captcha is confirmed, the html page crashes.
    And most important, this happens ONLY with the above post, not with this one.

    Does anyone knows why this is happening? Is it because of the url links I provided in my message?
     
    #45 demo, Sep 3, 2016
    Last edited: Sep 3, 2016
  16. demo

    demo Well-known Member

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    Regarding the lack of VAT in the US, let me inform you also about the new arriving so called "Amazon" Tax.

    VAT starts invading US, so if you are living in one of these 28 US states, beware! Probably you are illegal when you are offering goods or services (defined in the dash budget system) without giving the appropriate VAT(or "Amazon") tax, similar to what he is almost everyone else living in the rest of the world (were VAT is compulsory for both goods and services).

    This is my "legal" advice. No need to pay 1500 dash to a lawyer to tell you the same thing! If you liked my advice, just give your tip to the universal dividend foundation.
     
    #46 demo, Sep 3, 2016
    Last edited: Sep 3, 2016
  17. demo

    demo Well-known Member

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    So what is the solution to all these? DONT MESS WITH LAWS AND LAWYERS. Encourage businesses you want them to support dash, to create gift cards. Then set a dash affiliated business of buying and selling those gift cards, then encourage people to buy the gift cards by paying in dash. Similar to what bitcoin is doing with amazon.

    This is my "legal" advice. No need to pay 1500 dash to a lawyer to tell you the same thing! If you liked my advice, just give your tip to the universal dividend foundation.
     
    #47 demo, Sep 3, 2016
    Last edited: Sep 3, 2016
  18. Ryan Taylor

    Ryan Taylor Well-known Member
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    I'm not sure they have a choice any more than they have a choice about the existence of any software they may find undesirable running on the internet. Like with Bitcoin, they may not like it, but they recognize they cannot stop it. So they do the next best thing, which is try to regulate the businesses that interact with it. By assisting them with this regulation, we make it easier for businesses to integrate with us.
     
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  19. Ryan Taylor

    Ryan Taylor Well-known Member
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    The "off the cuff" answer from the law firm is that a heavily unfavorable opinion is unlikely. For example, similar to the tor network, it's likely that (because masternode mixing can be used for either legal or illegal activity), as long as the MN operator is unaware of any illegal activity taking place through his masternode, the owner would not be liable for that activity. However, if an acquaintance came to you and said "Hey, I'm selling drugs on this darkweb website and want to mix my coins, but I want to ensure I use nodes I trust don't belong to the government. What masternode is yours?" And you then give them your IP address... I suspect now you are exposing yourself to criminal liability. The guidance is likely to be in that vein.

    As @David pointed out, the main value of these legal opinions is to demonstrate that operators and business partners have done their due diligence with a reputable firm and did our best to comply with the law. That would protect all of us should the IRS or LE choose to interpret the laws more stringently in the future, helping to mitigate risks.
     
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  20. Ryan Taylor

    Ryan Taylor Well-known Member
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    Interesting idea... however, I'd like to point out that even if a holder were to not sell any Dash, since masternode owners only receive 45% of the rewards, their share of the network slowly declines over time (as 55% is going to "someone else" like miners or contractors to the network). While someone who held on to their rewards would see their absolute number of masternodes increase, their share of the network would continue to decrease. This is by design, by the way. It is impossible to increase your share of the network without constantly buying more masternodes than the block rewards can produce.
     
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  21. Ryan Taylor

    Ryan Taylor Well-known Member
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    Absolutely not. I think we explained well our reasoning for starting with the US market, but that doesn't mean we feel other markets are not equally important. It is just that the US market offers the most to gain from a legal opinion standpoint, and we have to prioritize and start somewhere.
     
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  22. Ryan Taylor

    Ryan Taylor Well-known Member
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    @moocowmoo I was having the same issue. And it only seems to be that post... It wouldn't allow me to quote it either and was crashing.
     
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  23. demo

    demo Well-known Member

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    I already told you, searching the laws around US is trolling. The laws contradict eachother among US states (for example have a look at the Amazon Tax.)
    What are you going to do in the case one law says you go north, and another says you go south? You cannot serve concurrently two laws that contradict eachother! If you mess with this, the dash community may tear apart. You have better leave US, and go have your seat to an offshore, to a country that has straight forward laws. So this is the first question you have to ask your lawyers. What is the country that best fits to the dash needs?

    Having a safe harbour, you can then approach US or any other market. Either directly if this is legal according to the laws (note that laws differ in the federal and in the local level, so legality is relative). Or if there is a law mess, then you can approach any market indirectly by convincing merchants to offer gift cards which the final consumer can buy in dash in the internet e.t.c.
     
    #53 demo, Sep 4, 2016
    Last edited: Sep 6, 2016