Frequent thinker, occasional writer, constant smart-arse

Category: government

A decentralised future

Ethereum, a newcomer this year on the Bitcoin scene caught my eye this weekend. What I like about it is that it’s talking about the future block-chain enabled world that has been introduced by Bitcoin, the true innovation of Bitcoin. If you know nothing about Bitcoin or want to get a update on the latest state of the industry,  I highly recommend you read the white paper.

But the reason I am posting about this is because it talks about one of my other favourite new concepts for the future world: liquid democracy. And it combines it together, under the topic of Decentralised Autonomous Corporations (DAC’s), which I often hear in Bitcoin literature but I’ve only come to appreciate today how they would practically work.

In short, mind blown. Liquid democracy and DAC’s represent two of the most groundbreaking advances in the fields of governance in the last decade.

Let me give you a scenario of how these three inventions: Blockchain, liquid democracy, and DAC’s would work.

Imagine an organisation such as a government district representing you or the local supermarket store. Now continue this thought experiment and that you and 999 other people are ‘stakeholders’: as a citizen that can elect a representative or you are a member of the organisation that can elect a board of directors, like how non-profits and as for-profits do as shareholders.

Every one of these stakeholders has a “key” and under the principles of DAC’s, if any one of the 551  of the 1000 stakeholders make a vote, it creates a binding decision on the organisation. That itself isn’t the remarkable thing: what’s mind-blowing is that it’s done automatically through “secure multiparty computation”, allowing real time decisions to be processed by computers reflecting the will of the stakeholders.

Now combine that with the concepts under liquid democracy, where these stakeholders can directly vote on any issue — but can also delegate their vote to someone. This concept is called “delegative democracy” and is like a hybrid of the concepts of direct democracy (where citizens get a direct vote) and representative democracy (where citizens elect a representative) — hence the apt term liquid as the direct vote can be delegated to a representative and reverted back to the actual voter in a very fluid way.

And finally, let’s tie this to the blockchain that Bitcoin has introduced to the world: a way to validate decisions.

So let’s say one day, you get an email from your community saying you need to vote on whether to allow a new super market in the area. Or a vote to determine if the super market should sell alcohol. Currently, these decisions are made by shareholders and citizens by their representatives such as management who are appointed by the elected board of directors or elected representatives.

But under the above scenario, you get a direct vote on the matter — along with your 999 other stakeholders. However,  assuming you don’t want to vote, you can allocate your vote to someone else which generalise’s the concept of a board of directors.

Mind blown

If the above doesn’t rattle your brain with its possibilities from how Fortune 500’s operate to the federal government could transform the way they operate from dictatorships disguised as fake democracy where elections simply give the perception of democracy, then it’s because you need to better understand the concepts.

That the (Bitcoin-invented) Block chain is a like decentralised receipt book of transactions that can prove decisions without the need for lawyers, liquid democracy is a new way to make decisions that evolves our current concepts behind direct and representative democracy, and the principles behind DAC’s means we cut the need for people making decisions on our behalf as cryptography has invented a way to determine a group of people (who are pre-authorised) to make decisions in real time.

The significance of Bitcoin is not that it invented this future, but it inspired it as it’s a the first version of  DAC in existence today. Where an entire financial system is controlled by the people, not a government or bank. Humans are replaced by computer algorithms and therefore enabling a decentralisation of power to the very people who are meant to have that power: you and me.

Fixing government with the Internet


— Declaration of Independence by Thomas Jefferson

One of the most interesting innovations in the evolution of democracy, is the concept of representative democracy: whereby a few are elected to make decisions on behalf of the population. The lower house of the Westminster System typically has representatives from electorates which are  groups of people clustered in geographies that form a critical mass, whereas the upper house represents a different class: in England, a plutocracy but in America, it was revised to give each of the states an equal vote (though, in is still a plutocracy with just a more accountable way of election).

Overall, I think this is a good model to keep. But with the growth of the party system around the world (which has become the way government is done, a critical function that ironically not defined in most constitutions), it has become broken: using America as the case in point, the Republican control of the lower house during Obama’s first term (and Democrat control of the Senate) had politics get in the way and risked the future of the country at a time when unity was needed the most. As Jefferson said, when a government becomes destructive of the ends, it’s the right of the people to alter or abolish it. The party system is failing our democracy.

The Pirates

A lot has changed in the last 10 years, let alone 100 and 1000 years when a lot of our democratic tradition has been written. In particular, the Internet has become a new force in our society that has transformed every industry that comes in its way. It will only be a matter of time when the government gets its own shake up and that time may becoming. Gregory Ferenstein wrote an interesting post recently on innovations thanks to the Internet, with the most interesting one below:

Pirate Party

They’re less fun than a boat full of drunken sailors, but more influential in Germany than many third parties are in the United States. After winning 15 parliamentary seats in Germany, the Pirate Party has developed an intriguing crowdsourced platform of decision-making known as “liquid feedback.” The trust-based voting system permits members to leave decision-making to those they know are more knowledgeable, while preserving the inclusiveness of direct democracy. The Pirate Party is currently expanding its ranks throughout the globe.

The liquid feedback platform may be the most powerful way to fix the current system of government. Imagine that we all have equal votes, but you trusted my views on the economy more than your own views — you could allocate your vote to me, where I could make it for you. Now let’s say I came to trust an economist on matters of policy, so I would allocate my vote, which includes yours, to that economist when she makes decisions (so in effect, her votes also counts on your and my vote). And so on: what we have here is representative democracy in it’s most beautiful form. It’s only now with the Internet can we allow a system like this to exist.

This is a system that could be built into the current governance of our society. And even better, it it doesn’t need to be written into the constitution, for it to have an impact: it could be done in parallel. A shadow government could emerge where people could nominate their votes to people who end up becoming super delegates on issues. The influence these delegates could be so powerful that it could trigger a vote of confidence on our elected leaders, not to mention additional accountability on their decisions as they are compared to a benchmark by the populace. Maybe even our elected representatives in the legislature could take inspiration for their decisions not by the party they are a part of, but by what the super delegates vote.

And perhaps, this could be the way we fix our democracy. Not by changing the system laid out by the constitution of great democracies in the world like America and Australia, but by changing the way our representatives organise their votes. No more liberal, labor, democrat and republican — but a liquid party, where the people who we elect into government under this banner promise to follow the direction of the population through the votes of the super delegates. Delegates determined by the liquid democracy platform that we all have access to anytime we want to vote on an issue.