Vitalik: Radical Decentralization – The Road to Freedom

Wealthy societies around the world have a growing crisis of confidence in the authorities. A stagnant economy, rising inequality and political corruption, and an elite monopoly on technology for profit have fueled a populist backlash. We all know and suffer from these grievances. However, we also fear that the right and left will repeat the same tricks (withdrawing from technology, markets, and international cooperation), which will not only help but destroy much of what we hold dear in contemporary society. Over the past five years, both of us have worked our way through part of the alternative: seeking ways to use markets and technology to completely decentralize powers of all kinds, moving us from relying on power to relying on formal rules. In the following, we discuss how these projects relate to and complement each other.

One of us is focused on technological solutions to the increasingly centralized control established by the digital economy and the powerhouses of the financial world. The emergence of Bitcoin, and other cryptocurrencies in particular, was a direct response to what the traditional financial system could do, and the article “The Chancellor of the Exchequer is about to implement a second round of bank bailouts,” published by The Times on January 3, 2009, was permanently inscribed in the on the Bitcoin genesis block. Having said that, the potential applications of the decentralized technology underpinning cryptocurrencies extend far beyond the financial realm. From massive hacks like Equifax to recent concerns over social media privacy breaches, the news is full of the failure of centralized systems to keep people’s privacy. These events are increasing interest and innovation in user-centric, “self-sovereign” identity management systems; decentralized blockchain technology, while expensive, is not cheap due to its highly reliable data storage and computing power. Often used in this type of design.

The other focuses on designing the rules of the game for the political economy of mainstream society, aimed at breaking down and reducing the need for centralization—what he calls “radical markets.” The traditional private property system tends to create and perpetuate the inequality of power, monopolizing resources in the hands of a few people, rather than making the best use of them. A truer, completely free market would create greater competition and equality through more auctions through a public property system. A one-person-one-vote democracy tends to oppress minority groups who turn to the judicial system or international institutions for protection, tantamount to subverting democracy. A more creative form of democracy would restore the legitimacy of government by empowering minority groups to protect their most important interests. “Quadratic Voting (QV)” is a leading candidate, where citizens can use a (possibly artificial) currency to buy votes for important issues at a cost of the square of the votes.

Our projects were largely developed separately, and each had doubts about the near-term status of the other’s projects. Despite its enormous potential, cryptocurrencies show a dangerous tendency to bubble; and exactly which of their most meaningful use cases remain to be studied. Radical new social institutions, whether technologically, economically, or politically, and whether top-down or bottom-up, are best pursued incrementally, allowing for opportunities for experimentation and social learning, and less potential for undermining existing Risks to the social structure to avoid backfire.

However, we also see great potential for collaboration and complementarity between the two projects. Because Ethereum and other cryptocurrencies rely on formal and transparent rules, there is no (deliberately) no referee or other authority to take on the role of adjudicating disputes. When the protective coat of judicial discretion is actually driven by people is stripped away, the shortcomings of the standard property rights system and voting rules are quickly revealed. Therefore, blockchain projects in particular need better rules to help maintain the decentralization of economic power; there is also a strong need for governance rules to free the community from reliance on large bureaucracies that cannot be afforded. An aggressive marketplace that works successfully on a blockchain can best achieve its goal of being free from reliance on discretion. Finally, the crypto community’s shared philosophical beliefs and unusual openness to innovation make it an ideal venue for radical market ideas to be experimented with at relatively limited, broader societal costs.

As a result, we see a lot of opportunities for collaboration and are actively promoting connections between our respective communities. Even if neither community can achieve the full social ambitions, our collaboration can still have important societal impact in many specific areas, including the use of blockchain to improve the security of data markets, and in blockchain-based social networks Aggregate opinions through quadratic voting (QV). In addition to the specific ideas we’re working on, a range of other related collaborations appear to be possible, such as electronic “postage” to stop spam, and high-quality financial planning for more people with limited resources.

Among the areas where collaboration is possible, one example in particular illustrates the challenge of leveraging QV to address the multitude of governance issues faced by blockchain-based communities. When it comes time to change a potentially controversial protocol, everyone tries to use voting to gauge community opinion. But so far, this method is either too easy to be manipulated by vest accounts (fake accounts) or malicious votes by non-community members, or it is too biased to reflect the views of a small number of big holders, so it has been criticized. QV is a moderate alternative by taking into account the differences in the power of participants with different views and interests in the community. As the cost of buying large numbers of votes quickly becomes unattainable (1,000,000 points will cost 1,000,000 points), the ability of a small elite to sway the outcome of the vote is limited.

However, QV also poses important technical and conceptual challenges to the existing crypto community. In particular, QV relies heavily on verifiable, independent human identities, as one community member can dramatically increase its effective influence by disguising themselves as multiple. The crypto community’s frequent use of anonymity and pseudonyms contradicts QV’s need for a clearly defined identity, and naturally creates the imbalance in the wealth and power landscape that the community hopes to avoid. After all, a system that regulates only capital and not human individual behavior may serve only wealth rather than human beings ruthlessly. In this sense, experiments with radical markets help to clarify significant technical issues outstanding within the crypto community.

More generally, as we have witnessed in some parts of the Internet and the web, excessive and naive reliance on any formalism designed to decentralize power can inadvertently have the counter-productive effect of re-establishing monopolies and oligopolies. Only by building technical systems that provide various mechanisms to check the concentration of power, and at the same time by constantly building social ideologies to look for failure modes of these mechanisms, can we hope to move forward from previous failed attempts to decentralize power. But the combination of blockchain and radical market technology can contribute to breaking down the oppression of corporations, governments, and tech giants, and building a more free, open, and cooperative world in the 21st century. We are hopeful about this!

Posted by:CoinYuppie,Reprinted with attribution to:
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