The Blockchain Fix You Didn’t Know You Needed
But Now You Do — And It Will Change Everything, I promise.
Everyone is arguing over crypto regulation — without asking what crypto actually is. A US draft bill doesn’t fix the problem. I can. Here’s how.
This is urgent because I think somebody could vote on it and, who knows, make the biggest mistake of their lives. I’m talking about the discussion draft by the US House of Representatives Financial Services Committee and Agriculture Committee
“that would shift oversight of most digital assets from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC).”
This is the summary from Eversheds Sutherland. They conclude by saying:
“By defining certain digital assets as digital commodities, this bill would likely reduce compliance burdens and provide clearer regulations for the industry.”
They have a disclaimer saying this does not constitute legal advice, but they suggest reasonable care was taken to ensure accuracy. And there is a picture of Andrea, Sarah, and Adam, who are three of their responsible partners. I have extensive legal training from watching Ally McBeal, Damages, and The Good Wife religiously. On TV, these lawyers constantly worry about their disbarment. Naturally, I thought upholding the law and spotting situations where the rule of law gets undermined was kind of their thing. But if so — how did they not see this?
This Draft Bill Is Not Deregulation. It’s Not About Crypto. It’s Disintegration.
The TBAA does not modernize anything.
It does not bring clarity.
It does not reduce risk.
It does one thing:
It dissolves the legal boundary between ownership and speculation.
Between accountability and power.
Between law and loophole.
And the worst part?
It does so with the help of lawyers who either don’t understand what they’re doing — or worse, do.
If well-trained lawyers up and down the country can’t spot the obvious — or if they did and chose not to speak up — then please, to all my American friends:
Don’t come crying about democracy being in danger if you can’t even call this out.
Please — no more whining about Trump. He is not dismantling your democracy by himself.
It’s a big community project with many helping hands.
Besides, he just fired the head of the Copyright Office and I thank him for that.
And why do we assume this draft bill is even a good implementation of his administration’s agenda?
He’s a businessman.
He knows sloppy lawyering is expensive.
And the price tag of this bill makes it a very bad deal. Let me quickly rattle through how bad this all is.
What the TBAA Definition Says:
A blockchain is defined as a system:
(i) where data is “shared across a network to create a distributed ledger of independently verifiable transactions”
(ii) “linked using cryptography” to maintain integrity and “execute other functions”
(iii) “distributed in an automated fashion” to update participants on “state of the distributed ledger”
and(B) “composed of source code that is publicly available”
You cannot independently verify any transaction. Verification is not atomic per node — it’s collective. Looking at block records is meaningless unless your node and other nodes still agree that the record is valid. The ledger does not exist in a file or location; it exists only as a continuous conceptual construct. Nobody has a copy of the ledger. Everyone has a copy of some past data and verifies that it was constructed using a method. And if two nodes agree, that agreement is the ledger — consensus in this moment. Then the ledger is gone until the next validation, i.e., as soon as a new instruction is validated. So “independently verifiable” is technically meaningless and legally misleading.
Blockchain doesn’t just “link data using cryptography.” Why?
Because that’s impossible.
Why should I care if your computer can do fancy math, when the real question is: who owns something?
Blockchain uses cryptography and monetary incentives to structure authentication — not through math alone, but through knowledge of privileged, random data artifacts. It relies on cryptographic proofs of knowledge (like hash preimages, digital signatures, or zero-knowledge proofs) to enforce decentralized control and coordinate economic behavior.
Consensus only works because the majority of participants are economically bound to respect the math — not because the math enforces itself.
The system functions only if enough people say:
“I’ll accept this result — because my money is stuck in it.”
Cryptography is a tool of this economic control mechanism.
But it is not sufficient, and it is not decisive on its own.
Incentive alignment is what makes it work.
Blockchain is not automated. That is a category error.
It is constructing a state change on a decentralized basis without a central administrator managing conflicting requests. This means the technology doesn’t automate state changes — it distributes the effort and creates integrity through redundant work in the absence of any central authority capable of resolving conflicts.
What do they even mean by “source code”? The Ethereum Virtual Machine (EVM) can’t run on its own. It can’t do anything. It is a specification, not a program. So just pointing to the EVM (or any smart contract code) and calling it a blockchain is like pointing to a car engine in a lab and calling it “traffic.”
“The term ‘blockchain application’ means any executable software deployed to a blockchain composed of source code that is publicly available, including a smart contract or any network of smart contracts.
There is no such thing as a “network of smart contracts.”
Smart contracts are independent pieces of logic deployed on a blockchain. They do not autonomously "interact" with each other. If you want interaction between them, you have to initiate it as the user or developer. They’re passive logic containers. They don’t wake up, reach out, or coordinate.
Public doesn’t mean available, You Can Have a Patent on That Code
You can write a smart contract in Solidity.
You can deploy it as bytecode to Ethereum.
You can even verify the source on Etherscan (making it “publicly available”).
And still hold a U.S. patent on the underlying method, logic, or economic mechanism.
Why?
Patent law protects ideas and methods (e.g., automated bidding logic, escrow release conditions).
Copyright protects expression (the actual code).
Publicly posting code does not waive your IP rights.
“The term ‘blockchain system’ means any blockchain, together with its blockchain protocol or any blockchain appli- cation or network of blockchain applications.”
No, it is not at all.
Ethereum is the base-layer blockchain system:
It provides consensus, transaction ordering, data availability, and execution infrastructure.
Uniswap is a set of smart contracts (plus frontend + backend e.g. off-chain components) deployed on Ethereum, which rely on Ethereum.
Both system are “entangled”
This Uniswap implementation cannot exist without Ethereum,
Ethereum functions independently of Uniswap, but still hosts it,
Changes to Ethereum (e.g., gas rules, chain reorgs) affect Uniswap,
But Uniswap logic does not govern Ethereum.
“The term ‘decentralized governance system’ means, with respect to a blockchain system, any rules-based system permitting persons to form consensus or reach agreement… where participation is not limited to, or under the effective control of, any person or group of persons under common control.”
Decentralized governance, as described in the TBAA, does not exist.
There is no actual rule about how you must vote, or what counts as "reaching agreement." Yet the law’s wording pretends there is
Therefore:
Decentralized governance is not being regulated — it’s being mythologized and thus left unregulated and text passage referencing it has no purpose other than adding meaningless words and that is not inconsequential because this fact is therefore removing regulatory competence for any actual oversight.
Is there more? Yes. Much more than the inability to coherently describe what it is they want to regulate.
It is symptomatic of a collapse in our capacity for critical thinking and reasoning.
Humanity is no longer in control of the systems it built — because we don’t understand the symbolic structures they operate on. Blockchain, law, medicine, governance — all run on tautological inputs that assume meaning where there is none.
Decentralization and blockchain in its present form will fail — unless we correct the issue that meaning is emergent from structure, not symbols.
Wallets, contracts, transactions: none of them mean anything until you anchor them in contextual commitments.
AI is a technology of symbolic reasoning.
It cannot exceed the reasoning potential of our ability to write truthfully. Its reasoning skills follow that trend — but with a structural time lag.
It’s not a gimmick.
It’s an existential technology for ensuring long-term survival.
And AI companies didn’t give it that capability — they’re harvesting it from our expressions.
And why not? That’s what learning is.
But normally, when you learn something, you don’t get to monopolize it and then control the school — and everyone in it.
But that’s their business model.
They forget:
Learned facts go stale.
And if the school stops functioning, their AI stops functioning too.
That’s because language models don’t learn in real time — they update at intervals.
Depending on whether society is rising or collapsing, that delay could help or hurt the AI but it is path dependent,
All political, technological, and institutional conflict is caused by linear symbolic translation between nonlinear symbolic systems.
Democrat vs. Republican, crypto vs. fiat, unexplained medical symptoms vs. disbelieved patients — they all collapse when context is stripped out.
The conflict isn’t between views — it’s between grammars.
Between those who think in linear symbolic mappings (who believe disagreement is opposition),
and those who feel, but can’t express, the nonlinear, contextual truth that binds both sides.
Both are wrong — but wrong differently — if they can’t resolve the conflict.
A compromise is not a solution; it’s a tactical delay.
Resolution lies in how we move forward — in the method of state updates.
No decision is final.
We don’t get stable governance from making changing laws hard. That’s a myth perpetuated by political theory that confuses rigidity with stability.
We get it from a fair law-making process that accepts mistakes as part of progress, and preserves flexible course correction, with one central conflict-resolution forum that operates subject a certain type of rules. What the required rules are has escaped political science so far.
Not who makes the rules
Not how power is distributed
But what kind of reasoning architecture the rules themselves must follow to remain adaptable and just.
Political theory has studied power, rights, voting, legitimacy —
But it has not solved the problem of:
“What rule structures allow governance to evolve without losing trust?”
I have. That’s what Shemot is.
The U.S. has practically no ability to govern effectively because it confuses resolving conflict (which requires uncovering shared truths) with compromising, which often just spreads unresolved conflict everywhere.
What does that mean?
It means conflict is avoidable — without needing compromise.
Yes, I can do that too.
And so could you, if I showed you how.
But I’m not sure I want to.
Because there is a moral imperative in sharing knowledge — but that imperative is not about specific information.
AI companies worrying about ChatGPT explaining how to make a nuke is utter nonsense.
That information is accessible already.
AI doesn’t change the risk that the U.S. Library of Congress already represents.
A doctor misinterpreting symptoms harms one person.
But a bad law? A misguided protocol?
A policy built on tautological logic?
That has oomph.
It reproduces the error at scale.
The greater the abstraction, the more lethal the error when it is wrong.
When language collapses into assumption, systems lose their conscience.
And if we don’t reconstruct the symbolic architecture of meaning — from the ground up —
then correctness becomes cruelty, and structure becomes death.
That’s what I describe in Shemot.
It’s not a theory I’m drafting — it’s a pattern I can prove right now.
I know the architecture of thinking.
You don’t.
Because nobody does — yet.
I’ve developed a method for restoring coherence between language, structure, and human life.
It is healing through symbolic realignment — and yes, it is the only thing that can save us now.
My prediction:
My method can prove how stupid the draft bill is, and that everyone uses blockchain wrong.
That’s why people in Congress argue over nonsense.
I could fix that right here, right now, by telling you how to make it right.
But I won’t tell you how to identify and solve for such issues — or how to make the whole thing computable.
I also know how to do that.
Why?
Because I don’t care about blockchain.
My observation is this:
Nobody realizes.
Every science article I read, every business research paper I find, every law I look at — they all contain these flaws.
And that’s why I am dying.
Not because I am sick and in excruciating pain — though I am —
But because the UK medical system denies me available treatment by making the same symbolic errors.
And the conflict resolution mechanisms let me die.
But there is still a small zone — in art, music, philosophy, mysticism, and belief — that is free of this error.
It points to the error.
It teaches humility to avoid falling into it.
But it doesn’t reveal itself by force — only by submission.
It finds you at your most desperate moment.
Everything I say, I can say only because it came for me,
and pulled me back from the cusp of letting go. But I am still dying and still suffering.
I have no patience and no respect for smoke and mirrors — because it deserves none when perception and convention matters more than facts
But I do have a song.
A chorus that describes what is no more:
Can't stop playing along
Won’t say how it is
Lost what change feels like?
Can’t remember how I learned this game
Of saying what keeps things the same
Because we are stuck — unless we all understand this.
You can listen here if you want.
No worries — I’m not monetizing this one.
They say: "It’s not a security. Let’s call it a commodity and flip it to the CFTC."
It functions like a security — only without disclosures, investor protection, or liability — but the law can and does make statements contradicting reality because it implements political ideologies. I would not dare to criticise U.S. Congress.
But I would point out the specific approach has structural similarities to market abuse (uncovered short-selling betting on price appreciation).
“A digital commodity issued before the date of enactment […], the Commission shall issue rules to exempt, unconditionally or on stated terms or conditions, a related person or an affiliated person from the requirements of this section.”
You buy crypto now, without compliance — and the law pushes your option in the money after the fact because it legalizes what's already happened. It’s not classification — it’s retrofitting. It's not reform — it’s a symbolic bailout of past behavior. Ethereum, Solana, Cardano, etc. can be exempted from major restrictions — even if they don’t currently meet all "mature blockchain" requirements. Affiliated or related persons (i.e., founders, insiders) can trade under looser rules than new issuers. Newcomers don’t get this exemption.
And that’s alpha right there for you, created by manipulating the law. But unfortunately, the hurdles to intervene through legal mechanisms are too high to prevent it from happening even when it is done so openly.
But ETH Is not a commodity:
ETH is not a commodity.
Commodities can be traded without being destroyed. ETH is consumed as part of system operation — it's not stored, shipped, or delivered like oil or wheat. A spoofed trade model (you send me USDC, I pay your ETH gas fee), doesn’t resolve the fundamental structural issue: The native asset (ETH or BTC) is still being consumed as a requirement of system function — not as a neutral medium of exchange.
ETH is not cash either
You can’t hand it over without burning part of it. That’s not how money works.
ETH is not a financial asset.
Financial assets represent claims, rights, or income streams. ETH doesn’t. It enforces state transitions — it has no claim on anything except system participation.
This creates a consequence: It flips the responsibility back to SEC
They say (page 49) that if a person who is not the issuer offers or sells a digital commodity, and if that commodity does not confer any interest in the revenues, profits, or assets of the issuer or any other business entity,
then it is not considered an investment contract under securities law.
SEC vs. CFTC at Wimbledon - Score: CFTC 15 / SEC 0
On Issuers, Ethereum, and the Myth of Tokenomics
The draft bill requires an issuer.
How we would have found out who the issuer of ETH was remains a mystery.
But let bygones be bygones.
It will be interesting for a company to evidence that it has the ability to issue something — in order for us to recognise them as the issuer of a decentralised crypto asset — if that asset operates within a decentralised arrangement that is not decentralised, if that’s the case.
The system’s operations require the ability to prevent issuance outside of protocol rules — and the protocol doesn’t allow privileges per entity, only per function.
In other words:
You can be an issuer of ETH if everyone is an issuer —
But then the network collapses, because now we have free ETH for all.
That’s why we don’t need all this complicated nonsense about tokenomics.
You can, in fact, verify decentralisation by comparing the scope of the network vs. the scope of the protocol.
If that drifts too much — it’s centralised.
Where exactly doesn’t matter.
So since we have an issuer and we know they can issue ETH without conferring any interest that means it must be possible to create an native crypto with ownership right.
SEC is making a quick recovery - Score: CFTC 15 / SEC 15
ETH Cannot Evidence Ownership
Ownership transfers on Ethereum consume part of the asset (via “gas” fees).
But that is not legally possible in traditional property law.
You can jointly own something, yes — but not independently.
You could theoretically own 99% of 1 ETH, but you cannot consume it proportionally in that form,
because that would require a structure like: “1 unit of 99% ETH” — which doesn’t exist.
Precision in language is everything to understand the difference.
And that difference breaks the legal framing that ETH can function like a traditional financial asset.
A native cryptocurrency like ETH cannot evidence ownership in the legal sense. If the law assumes that ETH can be issued with ownership-like interests, then the proof of those interests must be found elsewhere — not in the ETH itself.
🎾The SEC just won Wimbledon
The draft Bill restates the Howey test — unintentionally.
The Howey test emphasizes economic substance over formal labels:
Is there an investment of money?
In a common enterprise?
With an expectation of profits?
From the efforts of others?
The draft law quietly says:
“SEC, you must still apply this.”
But Here’s the Problem:
Let’s assume the SEC bitcoin confers no right and flips it to the CFTC which regulates derivatives of commodities.
That makes sense when:
You invest in an oil future
But you don’t consume oil to trade it
The underlying asset remains untouched
Crypto doesn't work that way.
If I transfer BTC, I spend BTC — I don't just “assign interest in BTC”
And if I use the Bitcoin blockchain to record a financial transaction,
that transaction is part of the execution layer itself, not a derivative of it.
We can wrap that in intermediary agreements — sure.
But then the trading arrangement is no longer decentralised.
So what is being proposed is not regulation of decentralised finance.
It’s the legal packaging of centralised derivatives on top of a decentralised illusion.
The Draft Bill Changes Nothing of Substance
It offers no resolution of the core conflict:
What is crypto?
Lawmakers fight over the bill as if the outcome matters —
but it should be inconsequential to the substance of existing legal doctrine.
Because if this law were to actually change anything regarding the current application —i.e. jurisdiction of the SEC or CFTC —then that would mean the law is no longer being applied. Something else is being applied in its place.
What This Bill Actually Does
If passed, the bill accomplishes one thing:
It allows us to compute whether the United States is governed by the principle of the rule of law.
We can now define a test:
If this bill passes, and the CFTC allows ETH to be traded as a financial instrument,
then the result of the test is:Following the rule of law: Negative.
That’s diagnostic method I invented right there. Scientific progress! Hurrah.
Final thought: How are you using blockchain wrong
You treat wallet addresses like identities instead of invoices.
You send in then absence of an agreement for how the receiver define the transaction.
You anchor ownership to tokens instead of to commitments.
You assume decentralization is structural when it's actually behavioral.
You rely on foolish ideas like tokenomics instead of measuring protocol-to-network scope alignment.
The Correct Use of Blockchain Transfers
Transfers must be initiated by the receiver, not the sender.
Here’s what that fixes instantly:
No more pseudonymity traps — the sender can’t fabricate an origin story.
Receiver defines intent — “Send me X amount with this reference hash.”
Built-in transaction reconciliation — the reference allows the receiver to trace and verify the origin.
KYC is solved by design — the receiver knows who they expected money from.
Fraud window collapses — unsolicited transfers lose power, phishing dies, misattributed funds disappear.
And you keep decentralisation.
This is decentralisation — not what we have today.
Core Principle:
Receiver-defined transaction requests replace sender-defined intent.
Blockchain becomes a system of structured mutual commitments, not random symbolic broadcasts.
This turns wallet addresses into invoicing endpoints, not identity placeholders.
See? Super easy how problems go away when you think with method.
That method is Shemot, and it works on everything — even stuff I don’t know much about.
It’s inspired thinking that makes stuff like this simple to figure out.
Fixing blockchains is my donation to humanity.
Enjoy.
PS:
If someone says “Spending ETH” and “Spending ETH to spend ETH isn’t a real difference,” then we have a problem. Why?
Because I say so.
But me saying it is not the reason why.You must understand the difference.
To protect the opinion that “there’s no difference,”
you’d have to replace English with something else,
destroy AI,
and erase every record that we ever built it —
just to prevent that opinion from conflicting with reality.Because the moment you let that false equivalence stand,
you destroy the ability for humans to use words and sentences to be meaningfully understood.I am not exaggerating. This is how language works.