Future tax regs. ADA devs to balance privacy and regulation. What does that mean?


#1

I am strong supporter of the Cardano model and the PhD power behind it. They anticipated blockchain 2.0. Kudos. Happy hodler.

I am concerned about the company stance regarding tax regulation in different jurisdictions. They said they want to balance privacy with tax requirements. What does that mean for hodlers? what is their roadmap regarding future sovereign regulations? Who are they really working for? People or corp/govt ties. I admire their work, but I would really like some detail about their endgame. I need more facts to see if this is a real long term play for financial freedom. They say it is. I believe them so far. They have done great work already.


#2

My take on this, is that they plan to work through problems as they arise with a careful and well thought out approach. I don’t think they are committed to any firm rules on this just yet. If their goal is to allow everyone to avoid taxes, they will have huge legal battles to fight, and is that the end game we want? Yes, many governments are corrupt, but if everyone stopped paying taxes, and the government(s) collapsed in a short period of time, would we be any better off? While the technology may appeal to some anarchists, I don’t think the goal of the Cardano foundation is complete anarchy. But I’m just guessing, and like yourself, I would like more information on how they plan to navigate the challenges they have ahead. I think their aim is to be able to work with governments as opposed to against them. I’d much rather see my government embrace Cardano and online voting, transparency, and detailed receipts for where our tax dollars go, then for Crypto to be constantly at war with regulators, making both systems dysfunctional.


#3

Apon some further reading, and reflecting on this question, it seems as though you are looking for an answer from a leader in the Cardano Company (IOHK is just temporarily developing the software), while the development approach of Cardano is to allow the community to work through these issues without a central authority dictating the approach taken, or what side of the debate ‘Cardano’ falls on.

From the philosophy section of their website:

"The vast diversity of cryptocurrencies also provides evidence for their social elements. Disagreements about philosophy, monetary policy, or even just between the core developers lead to fragmentation and forks. Yet unlike their cryptocurrency counterparts, fiat currencies of superpowers tend to survive political shifts and local disagreements without a currency crisis or mass exodus.

Therefore, it seems that there are elements of legacy systems that are missing from the cryptocurrency industry. We argue — and have inculcated into the Cardano roadmap – that users of a protocol need incentives to understand the social contract behind their protocol and have the freedom to propose changes in a productive way. This freedom extends to every aspect of a value exchange system, from deciding how markets should be regulated to which projects should be funded. Yet it cannot be brokered through centralized actors nor require some special credential that could be co-opted by a well funded minority.

Cardano will implement a system of overlay protocols built on top of CSL to accommodate the needs of its users."


#4

THIS IS SPECULATION:

There seems to be a philosophical bent towards privacy within the team. It is nuanced and the devs are careful with their words on this subject.

I am of the opinion that privacy must be built into the core of the system and that it be the default mode of transactions. I really dislike the approach of some privacy coins with “Click Here” features to enable the privacy settings. If there are only a few people transacting privately on a network it becomes very easy to guess their identities.

I’m looking forward to reading the papers produced by Cardano and ZEN Cash working together. Hopefully a novel solution can be found that protects pirvacy but still allows for an appropriate amount of regulation. (Whatever that is)


#5

I would think that Cardano would first find a home with friendly governments that share it’s principles…then build on from there. The superior tech of Cardano would allow for more efficient economies of the ones that adopted those principles while other gov’ts that didn’t would find themselves the North Korea of the new paradigm.


#6

If Cardano could publicly make progress or find a home with friendly governments during this market dip, that would really position them ahead of the pack when the markets start to turn. It’s apparent now that most crypto investors fear government regulation. While enthusiasts and traders love to make money with the volatility, Cardano is aiming for mainstream adoption and a stable currency with much less volatility then we see today. Having even one small government accept and legitimize ada would be huge, as it would reassure cautious investors that the currency will not drop to zero in a flash crash.


#7

That’s how i see it. They are practical about Govt’s but also ever so slightly making/coding the argument that the balance of privacy must be maintained.


#8

What I understand from the interviews I have seen form the IOHK lead developers, they are planning to allow cardano to interact with the legacy financial system, but not submit to it.

This is not possible right now due to the metadata attached to transactions in the regular banking system (think AML/KYC), that simply does not exist in the crypto space, specially in privacy focused projects. What I think they are trying to do is figuring out a way to make it possible to add that metadata to your transactions if you wanted, but they will only implement it if it’s possible to do that without compromising the privacy features of other users.


#9

I think they are more practical about government then most governments are. Transparency, privacy, and security? Cardano is aiming to do this better then any government has before.