Divi, a Future Proof Cryptocurrency
By Geoff McCabe, Co-Founder of The Divi Project
The world of cryptocurrency is very new, and fraught with uncertainty. The biggest challenge that cryptos now face are future regulations that government entities such as the SEC are assumed to be planning.
There are three big problems that must be overcome. Any cryptocurrency that ignores these issues risks being made illegal or irrelevant within a short time. These are the issues of anonymous transactions, securities laws, and tax collection. While we support the efforts to keep cryptos out of the hands of regulators, we also are realistic in understanding that at the end of the day, governments have the power to regulate. Therefore, The Divi Project has solved all three problems, insuring our place in the future roster of top digital currencies.
1. Anonymous Transactions
Governments are interested in taking away our privacy to send digital currencies, in the name of “Combating terrorism financing and money laundering.” http://dailycaller.com/2017/08/19/congress-considering-validating-bitcoin To solve this problem, Divi will have an on/off switch for the anonymizing feature of DIVI. Turning this off would leave it much in the same way as Bitcoin is now, in that transactions, with considerable effort, would be somewhat trackable. This switch would be built into our Governance system, and so the Divi network’s masternode holders will be able to vote to activate it, should governments begin to take action against cryptos that are unable or unwilling to comply.
2. The Howey Test and Securities Laws
Government entities around the world that regulate securities, are beginning to take action against cryptocurrencies and ICOs that they consider to be securities. We have designed Divi to be sure that it will pass the “Howey Test” that the U.S. government uses. The following explains the reasons why:
- Names as an Asset Class — Divi’s system has a type of DNS, Domain Naming System, to register a name or brand that’s connected with an individual wallet address. These can be sold within the Divi ecosystem, and are expected to have significant value as the number of users grows. This helps to pass the Howey test because Divi has an underlying “asset class”
- Profit Generation for Users — DIVI holders earn income, in the form of more minted DIVI coins, by placing them within our masternode system or in staking wallets. Therefore, DIVI passes rule #4 of the Howey Test, which states “Any profit comes from the efforts of a promoter or third party”
- Governance — DIVI has a built in governance system, whereby the masternode holders vote on leadership and various aspects of DIVI’s key metrics and functions, controlling the profit-generating process. Since our cryptocurrency is controlled by its users, not the founders, it cannot be considered to be a security.
- Blockchain Profits — The governance treasury is controlled by a non-profit Divi Foundation, and the price of DIVI doesn’t represent the value of this foundation or the company(s) that are hired to maintain and upgrade it.
- Marketplace — DIVI holders have a second way to earn more Divi. They also use our token to pay for listing their goods and services within our Marketplace, and they earn their profit in DIVI through their own work and expense, not a third party. [Marketplace]
While DIVI holders don’t need to ever trade/exchange our tokens in order to profit by their ownership, we expect that DIVI will be listed on cryptocurrency exchanges, and it’s well known that getting listed onto these exchanges can add considerable value. Many experts expect that the Governments will soon start to pressure or force crypto exchanges to de-list those that are found to be securities. Divi should not have that problem.
The Divi Project supports all efforts to keep governments from taxing cryptocurrencies, which will severely hamper innovation and growth in these world-changing technologies. Should it become necessary, our smart wallet has functions that can be converted to the collection and payment of taxes by merchants who use DIVI. Specifically, our “Auto Split” function can automatically split off a percentage of any transfer coming into a wallet address, geo-tagged by location to set the percentage, and set it inside a separate “pocket” or even automatically send it to another wallet address (such as a state or government’s wallet address.) This will save Divi users a lot of time and expense complying with tax regulations that may appear in the future.
With these innovations, we believe that Divi is at this time the only cryptocurrency that has built in ways to comply with whatever roadblocks government organizations put up to prevent mainstream adoption.
For more information, visit: www.diviproject.org