Thread by @TaylorPearsonMe

1/ The main advantage of blockchain-based smart contracts is the ability to do business across legal jurisdictions

@nickszabo4 called it "Cutting the Gordian Knot of Jurisdictions" - fon.hum.uva.nl/rob/Courses/In…

2/ In a sense, you can look at the internet aggregators as facilitating this in particular industries.

I'm fine hiring someone on Upwork that I don't know b/c I have some ability to rely on Upwork's "judiciary system" to resolve disputes

3/ Ditto on Amazon - I'll buy stuff from a vendor that I don't know anything about because I know that Amazon has standards and I have some recourse (and because reviews are pretty effective as a reputational tool)

4/However, there are certain areas where they don't work, most obviously financial services.

5/ @billbarhydt and @Abra's new stock trading solution on Bitcoin is an obvious example of this - anyone can get micro-exposure to U.S. equities. -

(Good write up from @fintechfrank - theblockcrypto.com/2019/02/06/abr…)

6/ Historically, the transaction costs (mostly in the form of regulatory compliance I think?) made this prohibitively expensive.

If it costs thousands of dollars or high net worths to qualify, then anyone below those levels didn't have access

7/ The internet revealed there was a long tail of latent demand for niche products and services (e.g. laundry detergent for people w/ allergies) that weren't profitable to distribute when you have to pay for shelf space.

The internet had zero marginal cost to shelf space.

8/ In the same way, I suspect there is a lot of latent demand for financial services which just hasn't been able to profitable served yet but can be using blockchain-based smart contracts.

9/ @Uniswap potentially seems like another example of this on Ethereum.

10/ The Uniswap smart contract does not care what jurisdiction you are in - anyone that can access the network can supply liquidity or trade.

11/ Of course, these are not trustless, but they are trust-minimized in some ways and at least have a different set of tradeoffs than the current system.

11/ With Abra they are a centralized entity that must comply with their regulatory jurisdiction (which they seem to be doing) and you are trusting their ability to maintain the peg.

12/ With Uniswap, you are trusting the security guarantees of the Ethereum blockchain

13/ There is some regulatory component as well if your jurisdiction deemed Uniswap illegal (though I'm not clear how this could/would be enforced?)

14/ Would love any criticism or feedback of why I'm wrong about any of this or what I'm missing.