Blockchains beyond Bitcoin: building better democratic infrastructure
With a distributed security model and transparency by-default, blockchain could be the right technology for the future of democracy.
Blockchains are just Excels with extra steps
If you’ve heard about Bitcoin, you might have heard about blockchain, the underlying technology powering the network. If you believe blockchains are really complicated, you’ve been misled. Just think of them as Excel files. Each block in the blockchain is like one sheet of the Excel. Every hour, minute, or second, depending on the chain, a few changes in the cells are agreed upon by all people keeping a copy of the Excel, and on we go to the next sheet. This process repeats infinitely, with everyone keeping a copy of the entire thing.
Now imagine that the data in this Excel is really valuable. It could be money or even votes in an election. How would you go about protecting the integrity of that document? The common approach of the last few decades has been passwords. By adding sufficient protection, you can make it pretty hack-proof. Blockchains go the opposite direction - they say to anyone who wants to see or change things in the Excel, go right ahead! However, if you’re the only one proposing your fraudulent transaction, 99% of the copies of the Excel won’t include it so you’re wasting your time.
This is how about $1 trillion worth of Bitcoin is protected. If you managed to control 51% of the machines running the Bitcoin network, you could reliably steal everyone’s money. Sounds scary, but in practice the cost of such an attack is exorbitant. Not only that, but the resources necessary in terms of computer chips, servers, and energy are extremely difficult to mobilize. So, since its launch in 2008, no one has ever managed to abuse the system.
Now, you might have heard that blockchains consume massive amounts of energy and are generally terrible for the environment. While this claim is very debatable, that isn’t the subject of this piece. There can be as many blockchains as there are organizations in the world - each with a unique mechanism to progress, often referred to as consensus mechanism, which allows individual actors to agree on blocks. Many blockchains use completely green consensus mechanisms that generate a very minor carbon footprint.
Decentralized governance and plutocracy
But we’re not here to talk about Bitcoin. In fact, we’re not here to talk about any cryptocurrency! Because currency is only one of the applications of this young technology. The one I’m most interested in is voting. Basically, by storing votes on a blockchain, you get a completely transparent system that’s accessible - and most importantly verifiable - by anyone! Imagine logging in using a government-issued ID and voting directly on the blockchain. You could see national elections play out in real-time, all around the globe, on a system that doesn’t belong to any single entity but is rather run by thousands of independent humans or organizations around the globe.
This concept of blockchain governance is already in use in Web 3. Many of the leading organizations, often referred to as DAOs (decentralized autonomous organizations), use some form of voting based on any verifiable object on a blockchain like a token or an NFT. These DAOs have decided to decentralize part of their decision-making to their community in a way to differentiate themselves from the characteristic opacity of the Web 2 giants. You might spend four hours a day on TikTok or Facebook, but that doesn’t mean you have any rights pertaining to the management of the platform. In Web 3, it is quite the opposite. The more you participate in a certain DAO, the more voting power you receive, either in the form of tokens or any other form of identifiable object on a blockchain.
There is no reason why this object couldn’t be something like this person lives in Belgium. This certificate would qualify me to vote in the Belgian elections and verify my vote on a public ledger. The impact of such technology on countries where election fraud is rife, or those who force their citizens to queue for hours on a weekday to discourage voting in certain localities, would be nothing short of transformative. But national elections aren’t the only organizations that could benefit from this sort of innovation: think about each community you’re a part of. Your favorite sports team, your company, your neighborhood, even your book club amongst friends! Imagine that good deeds and participation in these communities resulted in a greater say in their governance. Because you’ve been a faithful fan for decades and have bought the season tickets even in the darkest times, you have a greater say in the next manager of your football club. Having been at the same company for fifteen years, you receive more votes for the next general assembly of the company.
Rules that don’t change
In an increasingly plutocratic world, we need to create systems that value non-financial things. Giant multinationals around the world are making decisions affecting each of us, and we don’t get any say in it. Blockchain will not change the world, nor will it fix surveillance capitalism by itself, but blockchains are the perfect infrastructure to build more transparent and horizontal systems that take into account more than just money. Cryptocurrencies are one use case of blockchain technology, but decentralized governance is the one that can have the most profound impact on society. To understand why, let’s get into the concept of immutability.
Smart contracts have been the most significant innovation in blockchains in the last decade. They’re, at their core, basic computer programs that have triggers and consequences. For example, I might borrow 100€ from a bank, and then automatically be debited 10€ for the next 10 months. This already exists in banking, but the strength of the smart contract lies in its immutability. Once digitally signed, a smart contract can’t be changed in a way that wasn’t specified in the contract itself. No extensions, no surprise interests, and no need for lawyers or notaries to verify the execution of the agreement.
Financial smart contracts have quickly grown in popularity in the last two years, creating a sector called decentralized finance or DeFi. Today, around $100 billion are being secured by smart contracts. We can use the same principles behind them to create voting contracts as well! These voting contracts would be the democratic platform citizens use to vote and would include a clause that specifies that only the contract itself is allowed to change its own rules. This contract would serve as a sort of self-updating constitution that can only be changed by its own participants.
There is a lot of uncertainty about the future of civilization. One thing is certain though, we’re going to need robust institutions to safeguard the rights of humans. Constitutions might have grand ideas, but they’re constantly open to interpretation. Code, however, isn’t. It’s black or white. It brings a certain amount of certainty and stability, the necessary basis for humans to trust each other. Because, in the end, it isn’t about the code. It’s about creating infrastructure that allows humans to build an ambitious future together knowing they’re standing on solid, immutable foundations.
DecodeTech publishes opinions from a wide range of perspectives in hopes of promoting constructive debate about important topics.