All revolutions have their tenets, and the crypto/blockchain rebellion is no different. It is an article of faith among crypto-adherents that decentralization will solve many problems of society, including the problem of governance.
Vili Lehdonvirta – an Oxford University sociologist, book author, and former software developer – disagrees.
“The underlying technology is going to change and it is already changing,” he told Cointelegraph last week. “It has become less like blockchain technology, less like the original idea of an untrusted system,” especially after the Ethereum merger, where “company-like” “staking” entities would be needed to “maintain the integrity of the chain,” in his view.
Indeed, crypto networks can generally move in the direction of centralized digital platforms, “which are held by a group of people who you should trust, but also hope to hold them to account if they are found to be untrustworthy.”
Lidonverta new book, Cloud Empires, published by MIT Press, is in part a meditation on the annihilation of ideology and/or good intentions. Its topics are the mega digital platforms of the 21st century such as Amazon, Uber, eBay and others.
Many follow a similar life cycle: the charismatic founders who set out to change the world, steer their companies on a dizzying growth path, but then hit a hard wall of reality. They survived this collision, but not always for the better.
Subtitled “How Digital Platforms Bypass the State and How We Can Take Back Control,” the book contains an enlightening chapter on Satoshi Nakamoto and the blockchain technology he pioneered: its origins, adoption, transformation, and the ultimate realization that digital networks secured by crypto cannot completely replace “untrustworthy” human authorities. With regard to matters of judgment.
There’s Amazon founder Jeff Bezos, “once hailed as a champion of creating the perfect business environment for countless independent merchants,” but eventually turns into a digital monopolist, turning on merchants who, in effect, “extracts exorbitant fees and steals lucrative lines of business.” who are they.”
Uber co-founder Travis Kalanick also initially emerged as a “fierce advocate of free-market solutions,” but was later seen setting prices and regulating the number of cars on the streets. There’s Pierre Omidyar, creator of the “world’s first online reputation system,” who realizes in time that a “bad actor” alone will not deter criminals. His venture, eBay, has evolved into a “central authority that formally regulates its market.”
A social system without institutions
As for Satoshi, founder of the elusive pseudonym and known to the world primarily through a nine-page white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” published in 2008. People rely on powerful and opaque financial institutions to manage their finances,” wrote Ledonverta, Professor of Economic Sociology and Digital Social Research at the Oxford Internet Institute at Oxford University.
He placed Nakamoto in a series of libertarians in the digital age, beginning with John Barlow, the libertarian “who dreamed of a virtual society in which order emerged independent of the power of regional states”. Here, Nakamoto is seen through the lens of a political scientist. Lehdonvirta writes:
Nakamoto was not interested in making institutions more democratic. Instead, he wanted to revive Barlow’s dream of a digital social system that didn’t need such institutions in the first place—no bureaucrats, no politicians who inevitably betray the trust of their voters, no fraudulent elections by corporations, no corporate masters. Nakamoto still believes that such a social order can be created using technology – in particular, using encryption technology.”
Satoshi was not the first to seek “political emancipation” through cryptography. A subculture of “cypherpunks” and “crypto-anarchists” has been pushing this dogma for decades, “but after years of work, they still haven’t succeeded in building viable payment platforms.”
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However, Satoshi seems to have succeeded where the others failed – at first, anyway. What did he do differently? The short answer: It rotated registrars.
This revelation may seem depressing, especially given that crypto miners have been vilified in recent years as potential monopolists and environmental sinners. But, as Lehdonvirta puts it, Bitcoin miners are really just network administrators, that is, “registrars.” Their function, as originally envisioned, was:
“To view recently issued payment instructions, verify that they are valid, and collect them in a record known as a block – an official record of transactions that can be used to determine who owns what in the system. Of course, the administrator would not have to verify transactions manually: all the work will be done automatically. by peer-to-peer “banking software” running on their computers.
After about 10 minutes, “the next randomly assigned administrator will take over the task, check back the previous set of records, and append their block to it, forming a chain of blocks.”
Judges rotate every day
What makes the Bitcoin origin story different – sort of force round, arguably – is the author’s ability to place Satoshi in a historical context. Nakamoto was grappling with the classic rule dilemma – “who guards the guardians” – a dilemma that goes back to the ancient Greeks.
The city of Athens has been grappling with this problem for 2,600 years at the time of the legislator Solon. Lehdonvirta writes, “Instead of trying to make government officials more trustworthy, it [Solon] He took a different approach: he wanted to downplay the importance of credibility.”
Solon even had a machine to do this – a piece of ancient Greek technology called the “kleroterion,” or “allocation machine,” was a massive slab of stone with carved slots or arrays filled with bronze plaques engraved with the names of Athena’s citizens. These were randomly selected each day by bouncing white and black balls:
“Using the kleroterion, random people were chosen to serve as government officials in ancient Athens. Judges are appointed in this way annually. The judges were re-chosen every morning.”
Cloud Empires Ledger auditors compare Nakamoto with kleroterion:
“Responsibility for checking balances can be spread randomly among users, somewhat similar to the way posts of administrators were randomly distributed among citizens in ancient Athens. Where the Athenians used the kleroterion method to rotate administrators every twenty-four hours, the Nakamoto scheme used an algorithm to rotate Charge every ten minutes or so…”
The justification in both cases was to avoid the corruption that inevitably comes with the concentration of power:
“Just as in ancient Athens, this constant circulation of responsibility meant that the administration would be very difficult to corrupt. […] As long as the majority of peers remain honest, the platform can keep organized records without any single trusted authority. Belief in good intentions has been replaced by technological certainty. The trust issue appears to have been resolved.”
People remain in charge – they still are
Unfortunately, if it were that simple. As it often happens in Cloud Empires, innovation, goodwill, and transcendence only travel so far before they collide with human nature. Here the defining event was The DAO Hack of 2016, “a catastrophe for the DAO and its investors but also for the entire Ethereum platform,” in which an unknown attacker drained 3.6 million Ethers (ETH) from the DAO Project, the world’s first independent decentralized organization.
The hack was reversed by a hard fork of the Ethereum network. The network essentially pressed the reset button, throwing out recent transactions for the ledger and a resume where things were right before the attack. Vitalik Buterin, co-founder of Ethereum and the network’s core developers, held a poll before taking such a drastic step backing their recommendations, but opponents still argued that this amounted to a retroactive rule change.
Lidonvirta concludes, “The crisis revealed how the peer-to-peer blockchain system was never really “untrusted.” The network may have applied its rules with automated neutrality, but people were still responsible for setting and adjusting the rules. In this case, people decided to amend the rules to confiscate a person’s property and return it to its previous owners. […] The money put into the system was ultimately entrusted to the care of the people, not the crypto. The trust problem remained unresolved.”
According to Lidonverta, the DAO hack again raised “an ancient political science problem that also troubled the ancient Athenians: the authorities protect us, but who will protect us from the authorities? How can we hold authority to account?”
resist tyranny
In an interview with Cointelegraph last week, Lehdonvirta was asked: Given the myriad disappointments that have been recorded in the Cloud EmpiresDo you see reasons to be optimistic about digital platforms? Is there anything that makes you optimistic?
“People realize: ‘I don’t live in the libertarian utopia that Barlow and other dreamers of Silicon Valley promised me. Lidonverta answered. People have realized that and are starting to back off.
He provides examples in his book. Andrew Gazdeki, a businessman, teams up with other companies when trillion-dollar Apple threatens to shut down his company. “And they are actually earning themselves the right to continue doing business. And that’s not the only example. We had Etsy sellers in April of this year — 30,000 Etsy sellers strike” when that market raised transaction fees for its independent sellers by 30%. “People don’t take it,” Lidonverta told Cointelegraph.
As for the cryptocurrency space specifically, the “really interesting thing” is that there are now “a lot of people imagining different ways of organizing society, different ways of regulating the economy,” he said.
“The underlying blockchain technology may turn out to be neither as useful nor as revolutionary as originally thought, but they are still trying to devise new ways of organizing society,” such as through Decentralized Autonomous Organizations (DAOs), for example. “I mean, does that make it any less valuable? I think people could somehow go further if they didn’t limit themselves to this kind of blockchain dogma.”
asked about clerotron And ancient Greece – where did it all come from? As a “fellow” at Oxford University’s Jesus College, Lidonverta regularly eats with colleagues from many disciplines, including historians and classics, he explained. One of the lunch partners was an expert on ancient Greece and was also “very curious about Bitcoin.”
“I don’t remember exactly how kleroterion came about. I found it in my reading somewhere. But the connection between Bitcoin and ancient Greece arose mainly because I had dinner in college with experts from ancient Greece.”
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As the crypto space evolves, he’s seeing other hybrids involved, including sociologists like himself. “I think what’s really interesting is that a lot of crypto people are getting more and more interested in social and political science.” They realize that many systems and projects fail not because there is something wrong with the technology per se but because of a failure of governance. He told Cointelegraph:
Humanity has been developing systems of government for thousands of years. We’ve discovered some things that work and some things that don’t. So why not build on it the same way when we develop software. ”
Programmers don’t build everything from scratch, from scratch, after all. They use well known libraries and components to build software. “Why not the same with the referee?”
Altogether, the Finnish-born sociologist seems to believe that the intellectual frenzy unleashed by Satoshi Nakamoto, 13, may still evolve into something new and useful in an organizational and judgmental sense, even if the technology itself isn’t quite up to par. High expectations.
Originally published at San Jose News Bulletin
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