Understanding Crypto 13: Prof. William Magnuson: Blockchain and Democracy

Welcome to another episode from our limited edition crypto series. The previous guests we have spoken to about crypto generally have experience in economics, finance, or technology. In this episode, we have a look at crypto through a legal lens with Professor William Magnuson, an Associate Professor of Law at Texas A&M University School of Law. He is also the author of Blockchain Democracy, which provides readers with a guide into the world of blockchain and Bitcoin, and highlights the reasons for their growing popularity. In our conversation, we delve into everything law and order within the crypto world as Professor Magnuson explains the causes of crime, the jurisdiction of crypto, the impact of decentralized cryptocurrency on the legal system, and how to overcome the legal challenges surrounding crypto. We also talk about the underlying ideology of crypto, the origins of cypherpunks, the people who are being negatively affected by, mechanisms to enforce regulations, and much more. Tune in to learn more about crypto and blockchain through the lens of the law with Professor Magnuson! Key Points From This Episode: A brief overview of the political philosophies of Thomas Hobbes and John Locke. [0:02:48] Find out which of the two political philosophies is closer to reality. [0:04:55] What it means for political or economic systems to be decentralized. [0:05:26] An overview of the advantages and disadvantages of a decentralized system. [0:07:36] Causes of a decentralized system to become centralized. [0:09:54] Where power in an initially decentralized system tends to centralize. [0:11:38] The systems that democracies use to maintain a desired level of decentralization. [0:12:33] How close the underlying political philosophy of Bitcoin falls to the philosophies of Locke and Hobbes. [0:13:34] We learn about the origins of cypherpunks and the associated ideology. [0:14:55] Whether the current state of our world resembles the dystopian future that the cypherpunks imagined. [0:16:41] Why digital cash was so important to cypherpunks and why early attempts failed. [0:17:36] The relationship between anonymity and crime is explained. [0:20:16] What role crime has played in the development and proliferation of cryptocurrencies. [0:22:48] Why comparing cryptocurrency to cash as a similar mechanism for crime is incorrect. [0:25:53] Professor Magnuson explains how social norms affect criminal behaviour. [0:27:48] He outlines the norms seen empirically within the blockchain communities. [0:30:12] Challenges in applying existing laws and regulations to cryptocurrencies. [0:33:04] Where cryptocurrencies fall under current regulatory and legal interpretations. [0:37:44] Whether cryptocurrencies are a regulation problem or a law problem. [0:39:43] How to enforce regulations and laws for cryptocurrencies. [0:40:44] He tells us if public blockchains jeopardize the existing legal system and democracy. [0:43:17] The costs of lightly regulated or unregulated markets in terms of capital allocation. [0:47:11] Who is bearing the cost of unregulated markets. [0:51:09] Hear what he thinks blockchain's greatest accomplishments are so far. [0:51:36] We end the show by hearing whether professor Magnuson thinks it is a revolutionary technology. [0:53:07]