IOHK | WHY WE ARE BUILDING CARDANO | 06/28/2017    Ultimately, as protocol designers, we cannot support all needs. Our hope is that the flexibility that Daedalus will provide combined with stateful smart contracts running on CCL will satisfy those left out by our design decisions. We also hope that better standards can emerge to encourage all cryptocurrencies to enjoy better interoperability and security. 4. Regulation The False Dichotomy As mercurial and arcane as regulation can often be, one can metaphorically infer an elegant narrative loop of the corrupt and their prosecutors seeking justice. Regulations are the toolkit of the lawbringer. But like all tools, they might be crude, old or simply misused. Cryptocurrencies have not changed the human condition or the narrative loop. There will always be scams, bad actors and terrible outcomes despite the best of intentions. While cryptocurrencies can remove human judgement, they cannot remove human behavior. A cryptocurrency designer has to take a position on what toolkit he will offer the regulator to correct bad events. The unique challenge cryptocurrencies face is that they are a product of regulatory and monetary failure . 28 Culturally, many in cryptocurrencies consider government action to be corrupt, inept or ineffective. Therefore, they have little respect, patience or desire to endorse a special backdoor for a regulator or lawman to right wrongs. This act would be anathema to the entire purpose of cryptocurrencies. On the other hand, counting exchange failures and historic events, more than 10 percent of Bitcoin has been lost or stolen since the protocol started on January 3rd, 2009. As of June 30th, 2017, the value lost or stolen comes to a little over $4 billion. And this figure does not account for Bitcoin and other tokens lost to scams and poorly formed ICOs. 28 In fact Satoshi embedded in the Bitcoin Genesis Block the following headline taken from The Times: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks WHY WE ARE BUILDING CARDANO  Creative Commons Attribution 4.0 International License Page 35 of 44