Devs make technical decisions in order to minimize their exposure to possible liability; they will choose a solution that involves assuming less liability over one that involves more, all else being equal. They will often cite their concerns that something might be illegal under some existing legal syst…
100% disagree. The law is wrong in some cases and needs to be overturned. If I didn’t believe this why would I write a 4 part blog series about this very topic. You can read up about it here:
A developer could create an escrow that mitigates third party custodian liability and makes a financial product safe for consumers. Such a product might even offer more guarantees and protections than what the existing financial system offers. Yet this doesn’t mean that regulators will not see some aspect of its operation as being “illegal.” Does this make developers irresponsible for encouraging their users to break the law?
No, here’s why; direct payments are a protected first amendment right. My ability to participate in new financial services is my constitutional right. Intervention from regulators places my constitutional rights in jeopardy. My constitutional rights always take greater precedence than the need for regulators to protect consumers from what they feel are “dangerous new financial products.” The system is broken and some of us feel that regulatory capture is an everyday reality in our legal system.
Just because the insurance lobby thinks that peer to peer insurance is against the law does not make it against the law. But surprisingly this IS the system we live in today. Laws are enforced in a way that seem completely arbitrary and biased towards the views of large corporations. This does not mean that:
- We don’t innovate
- We don’t create new financial services that remove third party custodians
- We don’t give people more freedom over their money
If you do not believe in regulatory capture, or if you disagree that there is an incredible bias for the government to favor corporate interest then let me ask you a few questions:
- What happened to my 7th amendment right to a civil trial when I sign up for new cell phone service?
- Why am I always forced by every single cell phone carrier to sign away my right to a trial and agree to a forced arbitration agreement?
- Why is the #metoo movement so upset that employers are never held publicly accountable for their poor behavior because of forced arbitration agreements?
- When is it ok for an employer to hide behind a forced arbitration agreement to shield sexual predators and escape public scrutiny for a failure to make workplaces safe for everyone?
The system is broken. This doesn’t mean that we try and break the law, but it does mean that if we try to create truly decentralized financial products we will be persecuted for “breaking the law” even thou we did nothing wrong.