Dilia Lawyer at Beijing Shangquan Law Firm
In recent years, the author has devoted himself to research in the field of Internet financial crime, and has also done several related cases, the more representative ones are the 2019 Wuhan Xiao Bitcoin gambling fraud case, and the 2020 Beijing 798 Wang NFT art case. Wave after wave, wave after wave. In 2021, following the explosion of the NFT, IPFS silently caught up with the trend of making waves in the interdisciplinary fields of law, finance and the Internet.
As the musical "Chicago" puts it, 'The focus of attention today will be unattended tomorrow.' 'Is IPFS a whim of Internet engineers?' Is it the machine of capital cutting leeks? Or is it the real core technology leading the web 3.0 era? This takes time to investigate. Since the beginning of the blockchain, we have been emphasizing the concept of decentralized, and the technical core of IPFS is still decentralized, but it has more technical extensions in addition to this basic setting.
In this article, you can learn:
1. IPFS: What exactly is it? Why do we need it?
2. Filecoin: What does it do? What is the Addressing Revolution?
3. Platform thunderstorms, miners run away: how to avoid lightning?
4. Criminal compliance: Platform criminal compliance and compliance non-prosecution
First, unveil the veil of IPFS
In 2014, American geek Juan Benet founded the protocol lab protocol lab, developed and designed IPFS; in 2015, the American technology blog TechCrunch published a blockbuster report titled: Don't wait until the Internet is saved to think of IPFS. Since then, IPFS has become a force that cannot be ignored in the Internet circle and the financial circle. So what exactly is IPFS?
IPFS is called interplanetary file system, Chinese called interplanetary file system. Popularly understood, it is a peer-to-peer (p2p) hypermedia protocol, a decentralized Internet, which can make the network safer, faster, and more open. From a technical perspective, it aims to create a persistent and distributed network transfer protocol for storing and sharing files, and is a content-addressable peer-to-peer hypermedia distribution protocol. Nodes in the IPFS network will form a distributed file system, an open source project that combines existing successful systems distributed hash tables (DHTs), BitTorrent, version control system Git, Self-Certified File system ( SFS ) and blockchain file storage and content distribution network protocols.
So why do we need IPFS?
1) Incentivize users to share storage and bandwidth
At present, we are using a centralized Internet, which has the disadvantage of being costly and inefficient. Domestic Internet manufacturers will buy large-scale server clusters for us to obtain data from central service providers, but these high-cost equipment will often appear in the peak period of blockage, delay or even downtime, in the low peak period of idle, waste of resources. IPFS is an incentive mechanism to mobilize users to share storage and bandwidth to avoid high and low peak blockage or idleness. In addition, the current Internet relies on the backbone network, once the backbone network fails, there will be large-scale service interruptions and delays, and IPFS does not rely on the backbone network, even in areas where the network is not developed, IPFS will have a good performance.
2) Automatic check to eliminate redundancy
Internet storage space is often occupied by some large files, and many of these large files are duplicates. In the space of IPFS, there is no duplicate data, it will automatically check and deduplication, eliminate redundancy, the same content of the file in the system will only exist one, saving storage space, so IPFS can use bandwidth more efficiently and reduce costs.
3) Save the data permanently
The current internet can easily lead to data loss. The data we rely on depends on centralized servers (Internet giants) for storage and management, and although these companies have data backup and disaster recovery solutions, there will still be important data losses, whether artificial or accidental. According to statistics, the average life of a web page is 100 days, which means that many important data can easily disappear, and IPFS can permanently save important data.
4) Anti-censorship
The centralized Internet is susceptible to censorship, which is what we often see as "404". The current situation is that every country can arbitrarily ban certain websites and apps, such as Iran, North Korea governments ban YouTube, Google, Instagram running in their own countries, the Turkish government prohibits Wikipedia (Wikipedia) from being online in their own country, but IPFS can overcome such behavior.
Second, Filecoin came into being
As mentioned above, IPFS is the use of core technologies such as BitTorrent, Git, Hash, DHTs, SFS, etc., to establish various data such as websites, application apps, files, videos and other data on a peer-to-peer distributed network and index it efficiently. At the heart of this efficiency is its "content addressing," which Filecion came into being.
We know that looking for resources on the Internet requires an address, which may be an IP address, a domain name or a BT seed, that is, as long as there is an address, you can obtain the resource, which is called address addressing. However, in the context of the centralized network, this address addressing has two problems: on the one hand, if the address is invalid, does not exist, the BT seed is empty, the user can not obtain the data; on the other hand, in the address search, the user will make a request to the central server every time he does a search, and then wait for the central server to respond, one after another, the user can get the data, which undoubtedly increases the path and time for the user to obtain data. Small data, short distance may not reflect this path and time extension, just imagine that the transmission of data to expand to a few thousand megabytes, the transmission distance extended to The Earth to Mars, such a transmission efficiency is people can not bear the weight.
To that end, IPFS revolutionized addressing, changing address addressing to content addressing.
1) Even if the data address is "invalid", "does not exist", "BT seed is empty", it will not affect the user's access to the data. Because instead of telling the computer where to look for resources, you just tell it what resources you want, whether the http URL fails or the 404 code appears.
2) The user does not have to make a request to the central server when looking for data, but relies on the content of the data for positioning - whoever has the data, IPFS automatically links to the user, and then requests the data and gives a reward. However, this technology requires at least one user online and owning the data. Filecoin was developed in this environment, it is the storage proof chain of Web 3.0, and it is also the largest storage network in the storage track, which has reached a competition with a centralized cloud storage platform. It is itself a blockchain application built on IPFS, which also builds a decentralized storage market, incentivizing users, storing files, and obtaining revenue, specifically: Filecoin's incentive mechanism has two aspects:
1) Increase the incentive mechanism to encourage nodes (users) to store more files and share them online for a long time;
2) Proactively distribute files to ensure that there is always a sufficient amount of online backup files.
IPFS has gradually become the first storage technology solution for decentralized applications, such as Netflix, Chrome, and Firefox, which we are familiar with. It is reported that a certain degree, a certain Baba, a certain East are also building their own IPFS, which shows that IPFS storage technology is the trend of the times.
Third, it will rain, and the miners will run
Whether from the perspective of digital technology or capital investment, IPFS seems to be so beautiful and gentle, but when we see the announcement in the above figure, we reacted - changing the soup without changing the medicine, the miners ran away. The author has searched and sorted out the cases of online users being routinely, and the right should be a wake-up call.
1) Do your homework before investing
In the current domestic IPFS track, the storage technology market is already relatively open and transparent, the well-known miners have a name, of course, there are many "Li Ghost" miners, either copycat name, or say that this is a foreign company, opened a Chinese rudder. For friends who want to enter the pit for investment IPFS mining, the lawyer recommends that you consult a lawyer before investing, do a good job of due diligence, or carefully check the company's name and past history, and do not be fooled.
2) Mining is not allowed to be pyramid schemed
The author refers to a number of projects in the mining group that pull people's heads, they often do new MLM under the banner of "sharing rewards, directly pushing rewards", according to the higher the level of "promotion", the more the amount of investment, the more rewards are obtained, which is a typical MLM routine. The lawyer hereby solemnly declares: Anyone who pulls people's heads with a multi-level promotion model is a hooligan.
3) Timely stop loss and alarm
If the platform has a problem, the miner will often have a "frozen fund" situation when he wants to run, and at the same time, the miner wants to draw a salary from the bottom of the pot, make another profit, and ask the customer to invest money again for various reasons to unlock the funds invested before. The lawyer reminds you not to take chances, thinking that if you pay some more money, the money you have invested before will come back, which is a complete fool's dream. Some netizens broke the news that they had been on this kind of deception, before investing more than 2 million yuan, and then for various reasons were asked to invest money to unlock the money invested in front, and smashed into more than 1.5 million, which is a lesson from the past.
4) The road to rights protection is long
In the case of miners running away, many investors have mentioned that "it is difficult to protect rights, it is difficult to go to Qingtian", especially in the case of where the company is and the platform disappears, it is even more difficult to protect rights. Because in many cases, even if the miner and the investor sign a contract, the investor also found the main body and legal person of the company according to Tu Suoji, which is also most likely to be the "back pot man" who was pushed out to do the top thing, and this "chivalrous" may also be in the dark.
Fourth, IPFS platform criminal compliance
1) Guilty and guilty
On July 10, 2021, the Cyberspace Administration of China revised the Measures for Network Security Review to solicit comments from the public.
On September 1, 2021, China's first special law on data security, the Data Security Law of the People's Republic of China, came into effect.
On September 25, 2021, the Central Bank of China, the Cyberspace Administration of China, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the Banking and Insurance Regulatory Commission, the Securities Regulatory Commission, and the State Administration of Foreign Exchange jointly issued the Notice on Further Preventing and Handling the Risk of Speculation in Virtual Currency Transactions.
On October 13, 2021, the official website of the Central Bank of China issued the Notice of Chinese Min min bank on strengthening the management of payment acceptance terminals and related businesses (Yinfa [2021] No. 259).
Reading the policy directives issued at the national level in 2021, it is not difficult to find that the spearhead of supervision has shifted from the traditional Internet economy to the field of data science and IPFS, which undoubtedly points out the way for miners, that is, how to self-examine and how to achieve criminal compliance.
As we said in the third section of the "mining should not be pyramid schemes", in connection with the previous PTBC miner pyramid scheme case and the Sichuan IPFS case contacted by the author this time, it is not difficult to find that the public security organs will take the crime of organizing and leading pyramid schemes as the big premise of criminal logic according to the behavior mode of the miner, and then apply the small premise of the factual part implemented by the platform, so as to enter the judicial procedure of criminal offenses. Therefore, the lawyer suggests that the miner platform immediately review and examine whether its business has mLM models such as "membership fee", "pulling people's heads", "hierarchical rewards", etc., and if so, immediately shut down the illegal business and rectify it.
In addition, miners tend to have multiple levels of agents, which may be that miners themselves have no problem, and agents play the label of miners and commit illegal and criminal acts. This requires miners to do full and internal criminal compliance and build a criminal firewall, specifically: on the one hand, miners must review agents while reviewing themselves, such as understanding the qualifications, sources of funds, and legal risks of cooperation; on the other hand, do a good job of dividing powers and responsibilities, and establish a clear and professional enterprise management system, in order to effectively block legal risks when agents "ignite the fire".
Finally, in addition to the criminal risk of "organizing and leading pyramid schemes", the platform may also be suspected of "illegally absorbing public deposits" or "fund raising fraud" because the company has privately established a "capital pool". The lawyer suggests that, starting from the text of the law and the judicial interpretation, the platform is required to avoid the "illegality", "openness", "inducement" and "sociality" in the crime of illegally absorbing deposits from the public; it should also beware of the suspicion of subjectively being classified as "the purpose of illegal possession" in the crime of fund-raising fraud.
2) There is room for non-prosecution in compliance
The 14th Five-Year Plan mentions that it is necessary to give full play to the advantages of massive data and rich application scenarios, promote the deep integration of digital technology and the real economy, empower the transformation and upgrading of traditional industries, give birth to new industries, new formats and new models, and strengthen the new engine of economic development. On December 24, 2021, 17 departments and units, including the Cyberspace Administration of china, the Central Propaganda Department, the General Office of the State Council, the Supreme People's Court, and the Supreme People's Procuratorate, announced the national blockchain innovation and application pilot selection list.
At present, the state is vigorously supporting the digital economy at the legal, policy and economic levels, trying to leave a strong mark in new scientific and technological fields such as 5G, cloud computing, artificial intelligence, and smart cities. The author believes that lawyers should propose a new type of defense strategy from the application of policies and systems, so as to achieve compliance with non-prosecution.
With the scale, specialization and regularization of criminal compliance business, "compliance non-prosecution" has gradually become the last shield for enterprises to commit crimes, or "shangfang sword", that is, when the acts involved in the case are triggered by the lack of criminal compliance systems, and the enterprise also has the willingness to build a compliance system, the procuratorial organs can reach an agreement with the enterprise and make a decision not to prosecute.
From the perspective of law, "compliance without prosecution" saves judicial resources, improves judicial efficiency, and also improves the compliance and legal operation of enterprises. First, enterprises can be exempted from criminal penalties, second, the procuratorate also has the motivation to make a decision not to prosecute after the enterprise makes compliance; from the perspective of economic value and future development, the IPFS project has great development potential, in independent research and development, scientific and technological innovation, enterprises can make outstanding contributions, in solving social employment, promoting economic development, enterprises can really solve the problem.
In summary, although there are many legal risks at the legal level of IPFS, there is still room for non-prosecution in compliance. Lawyers should grasp both "law" and "policy", combine the characteristics of enterprises and current affairs policies, provide criminal compliance business for enterprises, escort enterprises in an all-round way, and of course, strive to achieve compliance and non-prosecution when necessary