The Blockchain Meaning and Definitions Paradox
Enjoy 2025
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The Blockchain Meaning and Definitions Paradox
Good morning. Per a decree from Larry David, the statute of limitations to wish someone a 'Happy New Year' ended this weekend. Anyone who gets caught using that greeting from today on will be punished by having to turn on their group chat notifications...with high volume. But let us be the first to wish you a happy National Take Down the Christmas Tree Day, though you really should have done it a week ago."
From Morning Brew's daily newsletter by Neal Freyman, Dave Lozo, and Holly Van Leuven, January 6, 2025.
This year I think we will see a lot of deregulation in the industry, this will bring tons of learning, tons of winners, and hopefully just a few losers. But in the end, the closely related blockchain with government and society builds a paradox itself. Being the first subs of the year, I wanted to be mindful of blockchain's meaning and its paradox.
Blockchain technology has emerged as a powerful tool with the potential to reshape our socio-political and economic structures. However, as the industry keeps growing, and its applications and implications, we encounter a paradox in how blockchain is defined and understood.
How is the “Programmable Money” narrative going?
One of the main promises of blockchain, smart contracts, and Web 3 narrative overall is the ability to "program money meaningfully". This capability is seen as a means to redistribute power and enable experimentation with novel socio-political structures. The decentralized nature of blockchain systems allows the creation of new governance models that could challenge traditional centralized authorities.
The Paradox of Definitions
Decentralization vs. Centralization: While blockchain is often praised for its decentralized nature, the reality is more complex. The technology can be implemented in both public and private networks, with varying degrees of centralization. This contradiction challenges the notion of blockchain as an inherently decentralizing force.
Governance Dilemmas: Blockchain governance models present conflicting ideals. Many users favor "crypto-native" approaches with on-chain governance, yet simultaneously believe that a wide variety of stakeholders should have decision-making power. This tension highlights the difficulty in reconciling decentralized ideals with practical governance needs.
Trust Paradox: Blockchain is a "trustless" technology, yet it relies on distributed trust among network participants. This is game theory at its best.
Sovereignty and Citizenship: Blockchain technology has the potential to challenge traditional notions of state sovereignty and citizenship. Challenging the role of nation-states and the nature of identity in a blockchain-enabled world.
Looking through a list of recent news that might drive the initial conversations in the industry, we can get a clear picture of the paradox.
Digital Identity and Privacy
A recent announcement from the UK government reveals plans to finalize a crypto regulatory framework by early this year. This development has significant implications for digital identity and privacy. The benefits for the UK users are:
Increased protection when using cryptocurrencies or blockchain-based services
Potentially easier and more secure ways to prove your identity online without sharing excessive personal information
Greater control over your data in digital transactions
Some numbers of crypto's influence on U.S. elections.
The 2024 U.S. election cycle saw an unprecedented level of involvement from the cryptocurrency industry in political financing. Crypto companies contributed a third of all direct corporate contributions to super PACs, with $119 million allocated to both House and Senate candidates. This massive influx of crypto money into politics demonstrates the industry's growing influence and its potential to shape regulatory outcomes.
Some numbers
Ripple's CEO, Brad Garlinghouse, revealed that his company has already contributed $25 million towards an industry super PAC for the 2026 midterm elections.
The crypto industry's support led to an 85% win rate for the candidates they backed, including 29 Republicans and 33 Democrats.
In Ohio, a crypto-funded super PAC spent $40 million on positive ads for Republican Bernie Moreno, helping him defeat incumbent Democratic Sen. Sherrod Brown, a known crypto critic.
The election of Donald Trump for a second announces a deregulation of crypto assets and blockchain technology. This change could lead to:
European Union's Comprehensive Approach
In contrast to the U.S., the European Union has taken a more structured approach to crypto regulation:
The EU introduced the world's first comprehensive cryptocurrency regulations in May 2023, known as the Markets in Crypto-Assets Regulation (MiCA).
From January 2026, all service providers will need to obtain the names of senders and beneficiaries for any amount transferred.
The European Blockchain Sandbox (EBS) was launched in February 2023 to support innovative blockchain projects and foster cross-border regulatory dialogue.
Asian Regulatory Landscape
Asia presents a diverse regulatory environment for cryptocurrencies:
Japan recognizes crypto as legal property and allows citizens to own or invest in it, while recently toughening rules on sharing customer information between exchanges.
South Korea passed the Virtual Asset Users Protection Act in 2023, strengthening protections for users and increasing transparency requirements.
China maintains one of the strictest stances, with bans on exchanges, trading, and crypto mining.
The paradox lies in the attempt to regulate a technology designed to be decentralized and resistant to traditional forms of control, while also addressing legitimate concerns about consumer protection, financial stability, and the potential for market manipulation.
I think this point is clear about the ethical and social paradox we are facing.