This post is in response to Vlad Zamfir’s recent posts on blockchain governance which describe what he believes are likely outcomes and which of those outcomes he intends to support. If you haven’t already read them I suggest starting there first. In this post I will explain why I advocate for autonomous blockchain goverance.
After reading Vlad’s most recent posts on blockchain governance it felt necessary to express my opinion that the most important factor in blockchain governance is autonomy. Unlike Vlad I do not believe that the vision of autonomous blockchain governance implies maximal immutability. In my opinion, autonomous blockchains do not need to be immutable, they do not even need to remain neutral to moral or ethical concerns. They just need to be sufficiently decentralized as to prevent tampering or disabling of their operation by external forces. However, it is both likely and desirable that a mostly immutable, mostly value-neutral public blockchain network exists.
Autonomy makes decentralized blockchain networks powerful political tools. They provide a means to coordinate economic, social, and political activity by enforcing protocol rules irrespective of the will of powerful adversaries. As with any other technological innovation, this ability can be wielded by those with good as well as evil intentions. However, we cannot expect any form of blockchain governance to be effective in preventing evil doers from leveraging blockchain technology — to think otherwise would be akin to thinking it is feasible to prevent criminal organizations from encrypting their communications.
There may be a subset of activities that are both broadly perceived as evil and tractably censorable. There may also be irregular state changes that are both broadly appealing and considered harmless. Autonomous blockchain governance does not preclude an organization from preparing and proposing hard forks to make these changes, or node operators from automating their fork choices based on signals from respected institutions. If there is broad consensus, hard forks can be adopted quickly and frequently. However, if there is not broad consensus, then continued pursuit of contentious policies will fracture the ecosystem.
If a chain attempts to adopt a policy without broad appeal, such as censorship of gambling activity, users who wish to gamble will move to a chain that has no policy against gambling. The policy does very little to effectively stem gambling activity. Users who don’t care about gambling but benefit from other interactions with gamblers may follow. By consistently implementing only policies with broad appeal a chain can attract and retain the most users.
However, in practice there may actually be very few proposals that are so clearly uncontroversial that broad consensus is possible. Even issues that appear on the surface to be harmless, might be controversial due to the required processes necessary to implement them with reasonable security and fairness. It may be broadly appealing to be able to recover funds that have been locked in a contract by mistake, but can the process for unlocking funds be handled in a way that is accessible to everyone who has locked funds? Does the normalization of these types of changes allow changes that do not meet the broadly appealing criteria to slip through unnoticed? Similarly, It may be broadly appealing to stem the use of blockchains for the dissemination of disturbingly violent imagery, but if there is a process for removing these images how can one validate that only those images were censored? As we rely more and more on these external governance processes we begin to reintegrate trust into a system that has been designed specifically to minimize this sort of relationship.
Broadly appealing policies outside of functionality upgrades seem exceedingly rare, and so it may be more efficient to simply adhere to a norm of non-intervention than to rigorously debate every instance of proposed intervention. Instead, controversial values-driven policies can be implemented at higher layers in the stack.
In this vision, the dominant chain becomes a secure, stable, and (hopefully) cost-effective base layer for a vast ecosystem of web3.0 applications and higher layer protocols. Because these applications and protocols cater to more narrow and less diverse subsets of the ecosystem they are able to implement policies that might be considered controversial without fracturing the base-layer. If an application or protocol wants to enforce KYC and AML provisions in order to issue security tokens they can create a contract that enforces those provisions and restricts the transfer of securitized digital assets to users inside of that community. If a community wants to implement a digital currency that supports fund recovery processes they can create a token that has a built-in mechanism to recover funds under specific conditions. If a community wants to implement an arbitration or moderation process for removing undesirable content, it can be done within the context of that application without introducing systemic concerns to the base-layer.
Autonomous blockchain governance forces existing institutions to adapt their laws and practices to support the user experiences and freedoms that are broadly accepted as legitimate by the autonomous blockchain community. Autonomous blockchains protect the freedoms of individuals by creating tools to safeguard user privacy (self-sovereign identity, pseudonymous accounts, and transaction privacy). Autonomous currencies enable individuals to circumvent top-down macroeconomic policies and allow them to opt-in to the economic systems that they determine to be most legitimate. Autonomous organizations enable groups of individuals to collaborate on a consistent and level playing field irrespective of their current location or nationality. By promoting blockchain autonomy you are promoting the emergence of a global value system that supersedes the authority of nation states.
If instead we choose to forfeit autonomy and cede blockchain governance to capture by an external regulatory body then we should not expect outcomes that are significantly different from the status quo.