Webinar: EtherDelta And The Regulation Of Decentralized Systems, With Andrew Bull, ESQ.

This week, I was joined on a livestream by Andrew Bull, ESQ., to discuss the SEC settlement with the founder of EtherDelta. Andrew is the CEO and Founder of Bull Blockchain Law, Philadelphia’s first crypto centric law firm. We attacked this question from both a technical and regulatory perspective, and I learned a lot.


Here were my top take-aways from the discussion:

  1. The SEC exists for consumer protection and views each case from the perspective of the end user, not the developer or entrepreneur.

  2. How you describe and promote something you create— whether it’s a token, an exchange, or something similar— will have a big impact on how it’s classified and regulated by the SEC.

  3. A developer who created the interface for interacting with a decentralized protocol, even if they didn’t create or own the protocol itself, can still be culpable if they promote that interface to consumers. For example, someone that created and hosted a website for interacting with the EtherDelta smart contracts might still be charged with running an unregistered exchange.

  4. The SEC and other regulatory bodies make themselves available! If you’re building something and there’s regulatory uncertainty, you can get in contact with them.

  5. While code is classified as speech, there are limits even to our First Amendment rights, and these have not yet been tested in the judiciary with regards to decentralized systems. A developer shouldn’t assume that they’re not culpable for code they write, publish, and promote just because they didn’t deploy it or host it themselves.

The conversation is packed with other insights— I highly recommend giving it a full listen. For more from Andrew, follow him on Twitter @andrewbull1988.

Talking Smart Contracts, Software Development, And The Future Of Crypto

This past summer, I was a guest on the QuantLayer podcast talking about software development and the broader crypto ecosystem. I really enjoyed the discussion and hope you will too!


Something I noticed when I went back and reviewed the transcript: Two of the things we opined about at the time have been partially addressed in only 2 months.

  1. The lack of recurring subscriptions for decentralized services is now being developed under EIP-1337.

  2. I complained about MetaMask’s UX, which has since gotten a major overall that makes it much better (though still far from ready for mainstream adoption).

Amazing to see how fast things move. Where will be in two years, let alone two more months? Buckle up!

The Two Views Of Crypto: Sound Money Vs. Global Computer

Each of us has a unique personality and history that influences the way we perceive the world-- our own set of lenses through which we view reality.  It turns out, those lenses can result in dramatically different conceptions of the same phenomenon.

It will Shock some of you To Learn all three versions look 100% Gold & White to Me ¯\_(ツ)_/¯

It will Shock some of you To Learn all three versions look 100% Gold & White to Me ¯\_(ツ)_/¯


In the crypto world, amongst those who believe this technology to be lasting and important, there seem to be two dominant viewpoints. In this post, we'll elucidate these two lenses, explore what each perspective gets right and wrong, and seek to unify the two if possible.

A World Computer

Many people view blockchain networks as giant, decentralized, global computers. Henceforth, we'll call people who tend toward this perspective "Computerians". (It's a dumb name, but I really don't want to type "people who have this perspective" over and over, so let's go with it).

A blockchain computer is everywhere and nowhere. Code IS run and State is Replicated across Thousands of Nodes

A blockchain computer is everywhere and nowhere. Code IS run and State is Replicated across Thousands of Nodes


Computerians tend to be developers and software people. They recognize blockchains as a new place to run their code and store their data. Compared to traditional computers, blockchain computers are wildly inefficient, expensive, and hard to program safely.

Despite this, Computerians are excited to write software for these global computers, and believe this software will change the world. Thats because they recognize a host of new capabilities these computers bestow on software, namely:

  • Digital scarcity
  • Data storage that is immutable, auditable, and censorship resistant 
  • Code that is unchangeable once deployed (i.e. the ability to provide guarantees to users about how a system will behave)

To put it succinctly, Computerians believe software is eating the world-- blockchain computers enable them to write new kinds of software and thus devour parts of the world previously thought indigestible.

Sound Money

In contrast to the Computerians, there are a group of people who view blockchain as primarily a monetary innovation. For these folks, "blockchain" is an implementation detail. We'll call them the "Fiscalites."

Is Bitcoin a Better Gold Than Gold?

Is Bitcoin a Better Gold Than Gold?


Fiscalites are more likely to have a background in economics, finance, or political science. They understand that, historically, things that become money-- like shells or precious metals-- have had certain properties, such as:

  • Durability and secure-ability
  • Measurability and divisibility
  • Forgery resistance

Looking at cryptocurrencies, Fiscalites recognize them as a revolutionary new form of sound money. Fiscalites tend to be skeptical of fiat money, that is, money issued and controlled by a government. They view centrally controlled, inflationary monetary policy as dubious.

Concisely, Fiscalites see cryptocurrencies as an ascendant new form of global money and the antidote to the questionable modern experiment of fiat currency.

Each Side's View Of The Issues

Unsurprisingly, viewing the world through these different lenses leads to different conclusions regarding various matters. Let's examine how each side perceives:

  1. The concept of cryptocurrencies
  2. Altcoins and other tokens
  3. Scaling and network upgrades


It should be self evident that to a Fiscalite, cryptocurrency is the whole ball game. The underlying blockchain technology is an afterthought. It's the sound money it enables that matters.

A Computerian views cryptocurrencies as a fundamental component of blockchain computers, but not as their singular end. A network's currency underpins the incentive structure that allows it to function in a decentralized manner, and it enables powerful use cases in the form of programmable money. While Computerians recognize the importance of these functions, the currency doesn't conclusively define the utility of the network.

Altcoins and Tokens

Fiscalites tend to be Bitcoiners. Since Fiscalites are focused on sound money, they see the network effects of Bitcoin as unstoppable. The more people who store their wealth in Bitcoin, the more its value increases, and the more likely others are to use it to store their wealth.

To a Fiscalite, unless a large number of people are willing to store their wealth in a given coin or token, it's useless. Most believe only one asset can accrue such broad social trust. An open minded Fiscalite might be interested in altcoins that improve on the money-ness of cryptocurrencies, such Zcash and Monero, but thats about as far as it goes.

Fiscalites Put Bitcoin On A Pedestal.

Fiscalites Put Bitcoin On A Pedestal.


As engineering minded folks, Computerians are more open to new projects which experiment, add features, and explore the blockchain tradeoff-space. As such, many of them are excited about Ethereum, but not exclusively so. They're multicoiners.

Computerians can envision a world where multiple blockchain networks see mainstream adoption, and where technologies like decentralized exchanges and atomic swaps allow users and software to transact seamlessly between them. Many Computerians even envision a world where a multitude of tokens and assets are implemented in code on top of these networks, each providing some narrow utility or incentive structure.

Scaling and Network Upgrades

Fiscalites don't want to change the network. Period. If the network can be changed, then theoretically it could be censored, broken, or have its monetary policy altered. This would damage its social credibility as money. For Fiscalites, intractable governance deadlock is a feature, not a bug, and suggesting a change to the network for scaling purposes is like proposing we alter the atomic composition of gold to make it easier to carry around.

Fiscalites want to scale the network on the second layer-- i.e. by leaving the base protocol untouched, but building on top of it, even if that comes with some tradeoffs. A historical analog would be government issued gold notes. They made using "gold" easier, albeit with some tradeoff towards trust. This was acceptable as long as there was an easy way to opt out of that trust by exchanging notes for physical gold.


Gold Notes Could Be Redeemed For Gold On-Demand


Computerians see scaling as an engineering problem, and one that must be urgently solved. If blockchain networks are all about creating new kinds of software, then we need lots of people to be able to use that software. These networks need to scale. As such, Computerians don't take an either-or view of scaling when it comes to layer 1 vs. layer 2. Why not both?

Naturally, this means lots of changes to the network. "Fine, let's get to 'em," says the Computerian. Even changing the monetary policy is not off the table in service of making the global computer work better.

What Each View Offers The Other

As we've seen, Computerians and Fiscalites seem to disagree on quite a lot, despite both being bullish about the overall importance of crypto. The truth is, the two views are complimentary, and each is necessary to keep the other in check.

We are the proverbial blind men, each feeling a different part of the elephant while arguing over its nature. We ought to be triangulating our viewpoints.

The Blind Men and The Elephant, Via Wild Equus

My background lends me to a more Computerian disposition. I've come to realize there is much we should learn from our Fiscalite friends.

Computerians ought to take more seriously the history of money, and tread more carefully with regards to network changes as a result. The Ethereum DAO hardfork makes a good example of where this can go awry.

To an engineer, the hardfork felt like fixing a bug-- correcting a piece of software that had not behaved according to its design. In reality, the hardfork was a breach of social trust that damaged the credibility of the Ethereum's decentralized nature. For ETH to be money, this is unnaccetpable. Hopefully, history will view it as a one time event that is forgivable due to the network's nascency.

The Ethereum community also tends to have an unbridled optimism and confidence around fixing problems through engineering. This can be energizing, but it can also border on dangerous naiveté. The push towards Proof-of-Stake, for example, strikes me as more risky than the community admits.

Finally, while Computerians may always remain multicoiners at heart, they should probably recognize that at some point, consolidation to a small handful of networks is not only inevitable, it's desirable. We almost certainly don't need a token for every decentralized app under the sun.

For their part, I think Fiscalites could stand to learn a few things from Computerians as well.

For one, Fiscalites are painfully narrow-minded when it comes to anything other than sound money. In fact, this narrow-mindedness can turn to actual hostility towards those who suggest other use cases for decentralized networks. This is foolhardy, as these other use cases do not preclude cryptocurrency being used as sound money in any way.

Smart contracts are the most obvious example. Fiscalites downplay their importance or outright write them off, as Jimmy Song does in the piece linked below. But an army of tinkerers and builders are flocking to these platforms to see what they can create with the new capabilities they've been granted. Underestimate them at your own risk, but perhaps do a bit of research on the history of personal computers, open source, or the web before you do.


Finally, Fiscalites ought to at least consider the idea that multiple crypto-networks can coexist. Perhaps they'll be proven right in the long run and Bitcoin will dominate. Even if so, pretending to know right now, with certainty, that Bitcoin is the only coin that can possibly prosper is beyond presumptuous, it's preposterous. The world is simply too complex.

Can't We All Just Get Along?

If these two vantage points are to be reconciled, we must find common ground. The essential point of contact between the two ways of thinking is decentralization. Both sides deeply value the potential for crypto-networks to disintermediate entrenched central powers.

Fiscalites are focused on state-backed central banks who tinker with the economy through top down monetary policy. Computerians are concerned by the giant internet aggregators who increasingly control the web, wielding broad power to promote or censor what is seen. Both are rightly uneasy about deepening concentrations of power in the modern world. Both recognize the immense promise and importance of dispersing it.

This vision of a bottom-up, decentralized world, enabled by crypto-networks, is one worth fighting for. Hopefully, those who share it can be persuaded-- despite their distinct perspectives-- to work together to see it realized.

Note: Build Blockchain Tech may not hold rights to the images used in this post. In such cases, images are reproduced here under the doctrine of fair use.

Do We Need A Blockchain To Be Decentralized? A Conversation With Alex Hillman.

Alex Hillman is the co-founder of IndyHall-- one of the earliest, longest running, and most respected coworking communities in the world. He's also an entrepreneur, developer, speaker, prolific writer, podcast host, and all around expert in building community. Despite having his reservations around blockchain and cryptocurrencies, Alex is a self-described fan of decentralization.

Which begs the question: do we need a blockchain to be decentralized? What does decentralization really mean anyway- and why is it important? In this webinar, Alex and I discussed exactly these questions. This was a great conversation-- Alex brought up some key questions and I enjoyed our discourse on these issues.

For more from Alex, follow him on Twitter @alexhillman and visit dangerouslyawesome.com.

Against Narrow Minded Maximalism

What is a Bitcoin Maximalist? Some insist the term is derogatory, akin to a slur. Others seem to own the term proudly. Whatever your opinion on the term itself, there is no doubt that within the blockchain/cryptocurreny world, there is a group of people who:

  1. Are singularly focused on the idea of creating "sound money" and believe Bitcoin does this in a superior way to all other cryptocurrency networks.
  2. Subsequently believe Bitcoin will dominate in the long run, and most/all other projects will die.

These are reasonable positions to hold. I am quite sympathetic to both of them. In my probabilistic view of the future of crypto, a non-negligible weight is assigned to the possibility that Bitcoin will become the dominant network by an order of magnitude or more.

There are, however, two corresponding traps that I see Bitcoin Maximalists fall into:

  1. The Either-Or Trap: Being so focused on creating sound money that one becomes actively hostile to other obviously valuable use cases.
  2. The Predestination Trap: Viewing Bitcoin's dominance as a fait accompli, and allowing no consideration for other outcomes.
Obligatory meme

Obligatory meme


Both of these stem from what can only be described as narrow-mindedness.

The Either-Or Trap

A great example of the first trap can be seen in Jimmy Song's blog post, "The Truth about Smart Contracts". In it, Song takes aim at Ethereum and argues:

"smart contracts are simply too easy to screw up, too difficult to secure, too hard to make trustless and have too many external dependencies to work for most things."

As a developer, it's hard for me to believe another technologist would downplay the incredible disruptive potential of smart contracts. Software is eating the world, and smart contracts allow us to do things with software that were previously unimaginable.

Are there issues to work through and best-practices yet to be developed? Sure. It's fair to point these issues out and Jimmy does a good job of covering some of them in his piece.

But we're talking about trust-minimized code manipulating immutable, auditable data code that can create, manage, and move a multitude of scarce digital assets. To dismiss the far reaching implications of that outright simply because the ecosystem is still in an embryonic state is preposterous. 

Jimmy is smart enough to know better, but his narrow-minded focus on cryptocurrency as sound money makes other use cases seem like a threat. If smart contracts will detract from sound money, then for maximalists, smart contracts must be bad. But the two are not in opposition. In fact, they're quite complimentary. Which would you rather have: sound money, or programmable sound money?

This same negative attitude is on display for other obviously disruptive use cases as well, such as tokenized securities.

Many maximalists, like Kevin Pham, dismiss tokenized securities as a purely sustaining technology. They're not. The ability to spin up tokenized equity and encode the ownership/distribution rules around that equity on a blockchain will likely be huge. It could change the way companies are formed and how capital is raised. It could enable a new wave of global entrepreneurship.

The point here is not to downplay the importance of sound money.  Rather, it's to recognize that we don't have to choose between sound money and other disruptive use cases. These things can coexist and compliment each other. But if Bitcoin proponents continue to ignore or attack these other applications, we may see them flourish on other networks instead. Which brings us to the second trap.

The Predestination Trap

Bitcoin may very well end up the single, dominant public blockchain, but this is not guaranteed. That should be obvious, yet some maximalists react defensively to what should be uncontroversial observations, like this one from Naval:

The best we can do is to view the future probabilistically, and even then it is unwise to assign too great a probability to any one outcome. There are simply too many variables and non-linearities to make a pronouncement; the future is fractal and these systems are too chaotic to submit to naive models.

We may end up with multiple valuable chains. Another chain might overtake Bitcoin. Chains may segment regionally or ideologically or based on functionality. Any number of outcomes are possible. It is wise to take all these possibilities seriously, to invest to capture upside from any of them, and to build and advocate for the vision of the world you'd like to see.

Productive Maximalism

Bitcoin Maximalism, whatever exactly it is, is not necessarily a bad thing. That Bitcoin has a rabid, committed fanbase is, in some ways, a very good sign for its future. Should said maximalists invest their energy in building the future in which they believe, their prophecies may be self fulfilling. It has the potential to be a very productive force.

The danger, though, lies in a narrow minded maximalism one that needlessly ignores powerful applications of blockchain technology and dismisses other projects embracing those possibilities. If too many maximalists fall for these traps, their devotion may preclude the very outcome for which they yearn.

Introducing An Experienced Developer To Ethereum Smart Contract Coding In Solidity

I had the pleasure of introducing my friend and fellow software engineer John Feras to smart contract development on the Ethereum network using Solidity. John is a senior engineer at Comcast with decades of experience; he was writing compilers when JavaScript was a twinkle in Brendan Eich's eyes! John is curious about blockchain tech, but before this session had no experience with smart contract coding.

This session should be helpful introduction for developer's of all experience levels. Thanks to John for agreeing to let me post the recording!