One big feature of crypto technology is that it is democratised. Decisions need to be made in any organisation but in a decentralised one there is no one person or body “in charge” so consensus is required to evolve and improve things for all participants. Some cryptocurrencies do this in different ways so in this post we’ll have a quick look at a few examples and then I’ll extrapolate to speculate on how these concepts might be applied to the mainstream if they were to replace our somewhat broken political system.
Case 1 : The Workers Decide (Proof of Work)
Bitcoin and many of the first cryptocurrencies to emerge use a protocol called Proof of Work, but without going into too much technical detail let me summarise. Bitcoin and others handle decisions by counting votes in new blocks that are mined. In this way it is the successful Miners of new blocks who are submitting the votes. If we were to apply this concept to the mainstream it would be like going to submit your tax return each year and submitting your vote through your tax return and your vote would be proportional to how much work you’ve done that year. However in reality it would possibly look a lot like turning over decision making power to worker unions (mining pools) and a lot of non-workers could fall through the cracks of such a system if it went mainstream.
Case 2 : The Landowners Decide (Masternodes)
DASH is the most well-known crypto that has implemented Masternodes but many new cryptos are also adopting them. The basic idea here is that if you have a certain amount of a crypto coin you effectively attach it to a node supporting the network to qualify it as a special Masternode. This usually gets you a mining reward but it also entitles you to a vote on proposals submitted by the network. I equate this to being a bit like having to own a house (or some other expensive asset) to be able to vote. Again this sounds a bit familiar.
Case 3 : The Money Decides (Delegated Proof of Stake)
Anyone familiar with STEEM or BitShares will have an idea of how voting can work in a DPOS system though there are some subtle differences between these two instances. Basically you vote with your wealth and for every coin you have you pledge it toward a Witness and/or a Committee which makes decisions on behalf of everyone. This is basically a form of Representative Democracy rather than a Direct Democracy and is actually not that different to how the world currently works. One additional feature of these DPOS systems is that you can appoint a Proxy who can vote on your behalf and this is potentially a very important and overlooked feature. Use of proxies can effectively introduce a new middle layer to the political process of people who are informed about issues and have influence as potential Vote Brokers which might help close the gap between the average Joe and the elected representatives.
Ok, so maybe the crypto world isn’t really setting us on fire with its innovation in governance models. But what if we took the best of them all and extrapolated a little bit, could we find something that works better than all of the above?
So far I’ve only really talked about the actual blockchains and their native coins, but we know that it is possible to issue tokens on top of these blockchains that can represent anything we like…..so why couldn’t we issue a token on these blockchains to represent a vote?
One of the recent projects that has been launched is called CIVIC (an ERC20 token on Ethereum), which is going to be used for identity verification and protection. We are potentially not that far away from being able to solve the challenge of ensuring 1 vote for 1 person. Imagine registering to vote at your local post office and after having your ID checked you can (together) create a secure voter token that can be used on a national blockchain. This token could then be used to record your vote to elect a representative or proxy in a similar way to the DPOS system or it could be used to vote directly on issues similar to how the Masternodes work.
Is it possible that we now have the technology in our hands that could truly enable us to self-govern in a way that is inexpensive, fast, secure and fully democratic?
It is no wonder the political class is worried about controlling blockchain technology……because they are in danger of being made redundant.
NOTE – If you missed Part 1 of my Crypto ideas about Economics you can read it here :-
https://steemit.com/money/@buggedout/could-crypto-ideas-go-mainstream-part-1-economics
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Interesting read @buggedout. Following you now.
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Terrific post Buggedout - highly informative with a few bright ideas thrown in for good measure. Thanks for explaining CIVIC too. SK as CN.
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Glad you liked it. I wish I knew more about CIVIC but if they don't solve the identity management challenge someone else will :)
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One big feature of crypto technology is that it is democratised.
Looking at bitcoin core through all 2-year blocksize drama I see desicion making by self-appointed oligarchy calling themselves "consensus". And the crowd blindly following this illusion of authority. Not much of a democracy.
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I agree that Bitcoin has some big issues when it comes to governance. The mining is very centralised already and really has the bulk of the voting power concentrated in the hands of about a dozen groups. Bitcoin Core technically has no power at all, but a lot of users support (follow) them and so the mining groups have been wary of creating too much division.
But we will see what happens when the SegWit2x fork is due to happen in November. I suspect the Bitcoin Core will be discovered to be the emperor with no clothes in the end as it is the miners will hold the real power.
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I forecast segwit2 fork would be close to non-event.
Because it is clearly not the thing market seeks right now.
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Heya @buggedout, Great post!
Thanks for upvote, i'm happy to be following you now
Cheers! 🤘😎
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Cheers @thedamus and thanks for checking out my blog!
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kinda bizarre for me to think that in the end, how much we have invested is how we are voting here.
yet should there be a limit, to the power any one person can have? and is there such a limit in place? do we want such a limit? the time may come when someone learns to game the system the best. should they then be allowed ultimate voting power?
i say that is exactly what our governments are like now and we had best prepare to mitigate such a inevitability.
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Any system that has flaws is eventually going to be gamed by those for self-interest at the expense of the overall system. It is why systems need to be constantly reformed and evolved - because no system is flawless.
You are absolutely correct that this is the problem with our current governments and bankers. Our systems are being heavily gamed by those in power now and our systems have not been significantly reformed or evolved in a long time. It still amazes me that in most countries we are using an archaic paper based electoral system that is hundreds of years old, when the rest of the business world and broader society is using the latest computer and communication technologies.
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Great post Buggedout. Resteemed.
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Thanks. I really appreciate the resteem :)
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Democracy isn't self governance. It's mob rule.
Not having rulers at all is self governance, and crypto is how we get there :)
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I realise you're coming from an Anarcho-Capitalist viewpoint, but can you explain it?
On the one hand you seem anti-democracy, but the other pro-crypto even though crypto uses democracy in its (consensus driven) governance models. How does self-governance work without some form of democracy? Can you give an example of a crypto that uses (or could use) a model that doesn't rely on some form of democracy? I'm not having a go at you, just trying to understand the AnCap view.
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All good, mate. Those who understand it are already ancaps ;)
I don't have a problem with democracy as a decision making mechanism.
If the local Baptist church decides, democratically, to hold their services at 11, or to ordain a female minister, or to up the tithe to 11% and make it mandatory and audited, I wish them the best.
It's when they decide that every household in a 10km radius is in 'their parish', and expands both voting, and the mandatory tithe collection to include Hindus, Sikhs, atheists and non practicing Baptists, that's something I have a problem with.
Maybe 75% of the catchment area is Baptist, so votes for the Baptist church to be the religious organisation ministering to that parish, over the Shinto Temple or the mosque.
None of this makes the Hindu families Baptist, or indicates that they consent to attend or tithe to the Baptist church.
Church membership should be voluntary, and not an accident of geographical happenstance.
Same with government :)
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Democracy is only ever going to be as good as those who are involved in it. If the majority want to vote for petty, ignorant and/or self-serving means then it is going to happen (even in crypto-land). In our societies people rely on the constitution to protect them from abuses of the majority....as much good as that seems to be doing!
For instance, if the Masternodes of DASH decided that they were going to increase the block reward for themselves then it could happen to the detriment of the DASH Users and Miners who aren't Masternodes. The only recourse for the Users and Miners would be to sell and exit the system. I guess in your Baptist church example you would move to a new locale to avoid the tithe, but I don't see a lot of difference between these two examples from a conceptual or ideological perspective.
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If Dash was the only currency permitted to South Australians; litecoin the only one for NT and doge had the monopoly in WA, then I'd have as much an issue with crypto's as I do with states.
You should be able to end relationships you don't want, without having to leave somebody else's imaginary parish.
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really cool post @buggedout that has been a big gripe I have had sense all the electrical votes. the block-chain could make what the paper trail used to be to voting and by using this token you could make it all fair and less minipulated. That is unless crypto is made illegal like in china.
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Even China can't stop the blockchain. Somewhere in the world there will be a country willing to give this a try, and the free thinkers and innovators of the world will flock to it.
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I love the idea of how it would be very difficult to fund wars with bitcoin I really want to get into crypto more and start buying with bit coin. Steemit rocks!!!
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A little bit off topic, but I have no knowledge, really, how it all works.
Is it possible that the government created these block chain technologies? (they have the resources) - bitcoin for example - and if so, they could just as easy switch the whole thing off?
I.e. the entire thing is nothing more than red herring to keep the cleverest occupied doing nothing (but they think they are, if you see what I mean)
Imagine if 'they' designed it all, with a kill switch, only to replace it with something already ready to go.
I really don't have a clue, but I do know the millions of man hours of very clever people have been occupied developing this.
Intentional distraction from something?
a good way to keep the brightest doing something of no relevance. - better than incarceration...Lots of government persecute the brightest in society, because they are a threat.
Rather than persecution, how about distraction..?
I don't know - But I do know the banks aren't giving anything up, and find it hard to believe these leviathans weren't privy to all this knowledge, way, way before any bitcoin emerged...just sayin'
Government/banks are evil - but far, far, from stupid....
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Blockchain is decentralised tech, so it will be as hard to switch off as it would be to switch off the internet.
The code is also (in many instances) open source, so we can see exactly what it does and the best cryptos go through a peer review process which is like an accreditation.
I have heard the theory that the CIA invented Bitcoin as some sort of Black Op and I'm not saying it isn't true, but it would be a pretty dumb thing for the CIA to invent because the genie is out of the bottle now and they can't put it back in or control it.
That said, I have no doubt the powers that be will want to crash the crypto market at some stage and it's possible we are being herded for a big cull (wealth transfer) so hold onto your hat :)
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ok cheers - still don't understand it though lol
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I have always been an optimist, and yes I think we may have the technology at last. I had a life insurance salesman call around yesterday, and we went way off topic in to a lengthy discussion of the global financial system and the blockchain. Word is spreading... ! I keep telling people that the crypto thing is far from over. People look at the Bitcoin story as if it is something they have already 'missed out' on. Far from it, I say!
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I agree things are just getting started. We have a few more bumps in the road ahead but I'm becoming an optimist again after years of just being cynical about the future.
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Ha ha, no doubt. For years I was a kind of weird mixture of optimist and pessimist, in that I thought that things were going to get worse before they got better. I'm kinda hoping that I was right, and now things are going to be getting steadily better after having got as bad as they are going to. I see the arrival of the blockchain a little bit like when Gandalf arrives at Helm's Deep - the 'war' is far from over, but the tide is turning. :-)
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Right back at ya :)
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Really good post here @buggedout - I think you'd like my Steemit series which looks at the hottest topics of the week in the world of Cryptocurrencies. Throughout @alexmavor and I provided a honest and unbiased opinions I'll be sharing the third episode in the next hour or so. Would love to hear your thoughts on it!
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The pb for me imo is that most token are though more as speculative assets, rather as utility token, or even as currency.
And this trend lead to all models of governance based on blockchain to turn into a money scheme, as dpos could be used as you say to have democracy on blockchain, but as all token end up being speculated on, and most people being in it because they think they can sell it at higher price, it can not really be used in this manner with true utility value on tokens, other than speculative assets, as it seem to be the only reason for 90% of people to own a token.
And i dont really good maner so far to reverse back this trend of speculative craze, which prevent use of token as currency, or unit of value, or utility value, as it can always be transfered to someone else and speculated uppon, which is still the major reason why people are attracted to crypto assets.
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The speculative craze causes volatility but it doesn't prevent a crypto from having utility.
STEEM is a perfect example. It is funtioning as an effective Social Media platform regardless of the volatility in the STEEM price.
I agree a lot of people are investing in crypto purely for profit reasons but not everyone is. Regardless of the intentions they are injecting capital into a technology innovation which needs it. Speculation only really becomes a problem when people panic and prices crash.
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Steem doesnt use the token as a currency, and its not very volatile, the sbd is indexed on the dollar for that purpose, and if it could go x10 and /10 from a day to the next, that someone could make a transfer of 50 and then 1h after it worth 500 or 5,that would not be a specially good feature.
And the upvote are more allocation of reward pool rather than transfer of unit of value, so steem is not used mainly as a currency, and there is the sbd for that purpose to have a potentially stable value in $ to make prizes or transfer that has to be aligned on a static value.
Even bitshare has some kind of index on the dollar.
They are not really injecting capital, there is no company behind, the coin are locked in their possessiob, and the dollars dont go to developpers. Its has only very loose relation with shares inna company, beyond the abtraction that people see it as.
Even with ICO the comparison is very loose, but buying btc on an exchange is not injecting capital in bitcoin company.
The price of the token in ico or coins for bitcoin is not indexed in any manner whatsoever to any company's capital value.
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With ICO there is definitely an injection of capital that in most (not all) cases is used to fund development of the product. It is different from an IPO or a capital raising on the stock exchange, but not by a lot. ICOs are where a lot of the speculative excesses are for crypto, but it's far better to have too much capital being invested into innovation here than too little.
For coins that have already launched, the benefit of a rising coin price is less direct. Let me try an example, a guy like Dan Larimer invests time, money and energy into building a new crypto technology. If the crypto price rises he is able to cash some of his asset out that he can then use to invest in a new venture - this is progress. If the crypto tanks or is stagnant then his capital is tied up and he is not rewarded for his effort, thus less likey to invest in a new venture.
Or you could look at the witnesses here on steem. Someone is considering investing in some new hardware and expertise to set up a witness. This improves the value of the network and is an indirect injection of capital into the crypto ecosystem. If the coin price goes up then more people will invest in setting up witnesses and the network gets stronger.
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Buy in now before it does go mainstream!!
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slowly and steadily it is already going mainstream
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This post received a 20% vote by @mrsquiggle courtesy of @scooter77 from the Minnow Support Project ( @minnowsupport ). Join us in Discord.
Upvoting this comment will help support @minnowsupport.
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@buggedout got you a $7.74 @minnowbooster upgoat, nice! (Image: pixabay.com)
Want a boost? Click here to read more!
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This post has received a 12.00 % upvote from @lovejuice thanks to: @buggedout. They have officially sprayed their dank amps all over your post rewards. GOOD TIMES! Vote for Aggroed!
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This post has received a 28.57 % upvote from
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This post has received a 24.65 % upvote from @bellyrub thanks to: @buggedout.
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This post has received a 25.00 % upvote from @nettybot thanks to: @buggedout.
Send 0.100 SBD to @nettybot with a post link in the memo field to bid on the next vote.
Oh, and be sure to vote for my owner, @netuoso, as Steem Witness
Have a great day!
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This post has received a 14.08 % upvote from @buildawhale thanks to: @buggedout.
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This post has received a 98.52 % upvote from @boomerang thanks to: @buggedout
@boomerang distributes 100% of the SBD and up to 80% of the Curation Rewards to STEEM POWER Delegators. If you want to bid for votes or want to delegate SP please read the @boomerang whitepaper.
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This post has received a 50.00 % upvote from @upgoater thanks to: @buggedout. Please vote @swelker101 for witness
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This post has received a 13.13 % upvote from @booster thanks to: @buggedout.
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Thanks, I appreciate your kind words. Hopefully a few resteems will help get it out there :)
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