Today in "Cryptocurrency enthusiasts reinvent the modern economy, poorly" we have the DAO, which is a science fiction mutual fund.
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Replying to @patio11
Brief background: a group created an ethereum script which purports to instantiate a self-governing corporation which invests in projects.
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Replying to @patio11
This hits people's sci-fi buttons pretty hard: a corporation whose Articles of Organization are actually executable! How revolutionary!
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Replying to @patio11
Now comes the problem: part of the attraction of the idea (to proponents) is that computer code doesn't know anything about regulation.
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Replying to @patio11
If one models all regulation as pure deadweight costs, that is a sensible idea, but some regulation is actually pretty useful. You want it.
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Replying to @patio11
For example, take mutual funds. A mutual fund is a special class of corporation which invests in other corporations. They're regulated.
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Replying to @patio11
Regulation decreases the amount of things someone designing a mutual fund is allowed to do, for the benefit of owners. A random example:
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Replying to @patio11
You cannot, in general, design a mutual fund whose sole investment is designed to be an investment in yourself, for any purposes whatsoever.
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Many people in history have chafed under that restriction. Chafed! Frequently because it prevents them from swindling their investors.
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Replying to @patio11
Jacob Krall 🐴 🚋 🚋 🚋 💨 Retweeted Patrick McKenzie
Jacob Krall 🐴 🚋 🚋 🚋 💨 added,
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