Introduction

The blockchain regulation matrix is meant to make you think about how the different layers of the blockchain would affect you as a consumer and as a citizen. Regardless of the country you are a citizen in, this matrix can be applied as a framework to regulating the blockchain.

Scope and Purpose

The scope of each layer is as comprehensive and exhaustive as possible. There should be no stone unturned or transaction unknown, so to speak. The purpose is to get to the bottom of each of the concerns below as thoroughly as possible and to either highlight existing tech that fulfills all of them or the tech needed to fulfil them.

Each layer of the matrix is examined on both its centralized and decentralized side, and every cell answers the same five questions:

a) Government Concerns

What does a government need from this layer to protect and tax its citizens? For example, at the Electricity layer: the concentration of electricity supplied to a blockchain from within certain countries or regions.

b) Consumer Risks

What can go wrong for the consumer at this layer? For example: geopolitical disruptions cutting off electricity access, or an exchange commingling customer assets.

c) Cons to over-regulation

What is lost if this layer is regulated too hard? Typically: stifled innovation, migration of builders to permissive jurisdictions, and reduced financial inclusion.

d) Cons to lack of regulation

What is lost if the layer is left alone? Typically: no consumer recourse, concentration of power, and systemic risks growing unchecked.

e) Does technology exist that meets all of the consumer and government risks?

The payoff question: if technology or precedent already fulfills these obligations, it becomes the template for principle-based legislation. See the matrix for each layer's current answers.