Co-founder of Ethereum, Vitalik Buterin, and co-author of ‘Radical Markets’, Glen Weyl, published a thought piece on the liberating properties of radical decentralization. The article in question spoke about how disruptive technologies like blockchain can be utilized to dismantle existing power hierarchies.
It speaks about how traditional and established authorities are facing issues of dissent and distrust by the everyday population. This dissent is also directed towards a concentration of power by the elites of the society. It is emphasized that the solution to the problem is not the retreat from technology as this undoes the progress done by it and sows the seeds of the problems it aims to solve.
They speak about how Bitcoin and other cryptocurrencies emerged as a reaction to the traditional financial system and its perceived excess. The genesis block of Bitcoin was inscribed with a Times article about the second bailout for banks during the financial crisis in 2009.
The failure of legacy centralized systems for data privacy was also emphasized. These events are driving interest behind the so-called ‘self-sovereign’ identity management systems which are centered around the user. They say that blockchain features heavily in these designs as a ‘high-assurance store of data and computation’ which is also decentralized.
The article also speaks about Glen Weyl’s Radical Markets theory, which is focused on making political and economic rules and norms that break up and reduce the need for centralized authority. He speaks about how a radical free market could create greater competition and equality through an auction of the commonly owned property, rather than monopolizing resources through a traditional private property. He said:
“Traditional private property tends to create and perpetuate inequality of power, monopolizing resources in a few hands rather than deploying them to their best uses.”
There was also talk of the voting system known as Quadratic Voting or QV, wherein voters can buy votes at the cost of the square of votes bought on relevant, important issues. This is a proposed solution, as it is emphasized that one-person-one-vote systems systematically oppress minorities, leading to the subversion of democracies due to the need for protection by judicial systems or international authorities. On QV, they said:
“A more creative democratic forms that give power to minorities to protect their own most deeply valued interests can restore the legitimacy of government.”
The tendency of cryptocurrencies to exhibit bubble behavior potentially identifies them as a radical form of a social institution. Such radicality is meant to be introduced ‘incrementally and slowly’, so as to avoid the disruption of existing social structures and avoid causing the problems they aim to solve.
The move towards rule-based structures rather than trust-based ones is something that Buterin aims to achieve through Ethereum. As he says:
“The failings of standard property and voting rules quickly manifest themselves when stripped of the protective coating of human-driven judicial discretion.”
The demand for better rules to stand in for trust in institutions and for true decentralization grows stronger, removing the need for discretionary power for “formal and transparent rules”. From its genesis, the crypto community has exhibited a ‘uniqueness to innovation’ and ‘aligned philosophical values’.
This makes it a provisional hotbed to test Radical Market ideas at ‘relatively limited broader social cost’. He also previously mentioned that it was important to discover methods to radically decentralize the power of ‘all sorts’ and shift to ‘formal rules’.
They mention certain contexts wherein their respective areas of expertise may be applied, such as using blockchains to improve the security of data and Quadratic Voting for aggregation of opinions in blockchain-based social networks. This is particularly applicable to the governance problems blockchain communities have faced due to their decentralized nature.
The problems faced are also due to their anonymous and pseudonymous culture which allows for the creation of sockpuppets, which are fake accounts, and malicious voting by non-community members on controversial protocol changes. There is also the problem of the voting being too skewed towards so-called ‘whales’.
There is also an emphasis on ensuring the verifiability of separate human identities when implementing a QV system. Due to a large amount of wealth present in crypto communities, it is important to take into consideration that the cost of buying too many votes must be prohibitively expensive to prevent disproportionate power in voting. They say:
“After all, a system that formalizes only capital and not human individuality may inexorably serve wealth rather than humanity.”
They conclude that the only way to avoid the reestablishment of monopolies and oligarchies and truly decentralize power is by making technical systems that check the concentration of such power. Simultaneously, social ideologies must be built as a lookout for the failure modes of these technical systems. They said:
“[Only then] can we hope to succeed where previous attempts at decentralizing authority have failed.”
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