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Comment by runbathtime | Hacker News Reader

The reason why I believe mining isn't being labeled as money transmission is because the miners never take custody of any bitcoin, they collect/handle transactions themselves, but these transactions are p2p, the bitcoin do not go into the hands or control of a money transmitter.

Where the author is correct is that the miners are the chosen ones for writing to the central ledger of bitcoin, but writing to a ledger including transactions, is not the definition of money transmission- the miner would have to take custody - which they do not.

Now where money transmission I believe is running rampant is any smart contract built on ethereum, like uniswap, that is taking custody of any token and holding that token- all of them are violating money transmission laws.

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Nobody human or corporation has custody of tokens deposited to Uniswap. It has no admin keys, just an autonomous script running on chain.

I guess you could try to go after the guy who wrote Uniswap's code but that has First Amendment issues according to US vs. Bernstein:

> the Ninth Circuit Court of Appeals ruled that software source code was speech protected by the First Amendment and that the government's regulations preventing its publication were unconstitutional.

https://en.wikipedia.org/wiki/Bernstein_v._United_States

Did Uniswap3 write itself? Are there humans that wrote the code and deployed it? Why is Uniswap3 protected with copyright law and who does that protect? Why is there a company called Uniswap? Why were they funded? Does the protocol receive tokens (sole control) and can it send them? How would you define custody?

I addressed the question of going after the dev above, after the first paragraph.

My point on custody is that no human has the ability to do anything other than trade on uniswap as a regular user. You can trade one token for the other (in a given pair contract), and you can provide both tokens as liquidity and collect fees on the trades. The contract handles the rest according to its code, which is run by every Ethereum full node.

I would say that the protocol code is conducting money transmission and leave the argument that some humans wrote it aside.

In the docs, Uniswap says they don't currently take a protocol fee, but might add it in the future. This fee would not go to liquidity providers, but to the smart contract itself. Who would receive the protocol fee I wonder, or would the smart contract itself keep the fees, never distributing it to any human.

I haven't even brought up the can of worms of governance tokens. The protocol seems to not need a protocol fee since they can make a fee by issuing themselves governance tokens that have some privileges with the protocol and have a price. It is interesting that you say the code is immutable, but the governance tokens claim to give its holder voting rights to make changes to the protocol code like changing fees. It is a major problem that investors of Uniswap the company received the uni governance token in proportion to the funding of the company which they tell us has nothing to do with the decentralized uniswap protocol. You can't have your cake and eat it too.

Changing a number is not the same as changing code.

I haven't really kept up with V3 but earlier versions had no tokens or governance and were very successful. They're at least an existence proof that defi protocols can be completely autonomous.

How is changing a number not changing the code?

The autonomous claim that you have made more than once, whether true or not, does not change the fact that the smart contract is doing money transmission.

So what if it does? Are you going to put a smart contract in jail? I'm saying there's no human doing money transmission.

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