How ‘Public’ are Global Public Blockchains?
From ‘public’ as open, to blockchain pro bono publico.
Within the blockchain space, it’s common to describe blockchains (or blockchain, singular, to make it easy on the eyes) with lots and lots of adjectives —
- public permissionless blockchain
- global public blockchain
- censorship-resistant blockchain
- open-source public blockchain
- decentralized & distributed blockchain
- trustless blockchain
- …
Of these, the term public is the most misunderstood, under-appreciated, and arguably most valuable quality of blockchain.
To see the enormous political and economic power bound up in blockchain’s public qualities and postures, let’s examine (1) why public matters, (2) how public sensibilities are expressed colloquially by different blockchain communities, (3) how establishment actors and crypto natives often neglect and downplay blockchain’s inherently public qualities, (4) how and why global blockchain communities need to safeguard and expand their conceptions of the public.
1. Public Matters
If you follow policy debates at the intersection of blockchain, law, and governance, you know there have always been incongruities within and between how (A) blockchain communities represent public blockchains; (B) multinational public-private actors like, say, FB represent public blockchains; and (C) how state actors characterize public blockchains.
So to avoid feeding into inaccurate, insecure, and unhelpful state (public) v. crypto (private) binaries, let’s open our ethploration with (B) — how multinational public-private actors like FB position themselves vis-à-vis their peers, state actors, blockchain communities, and the public.
First, let’s unzip the seemingly odd descriptions of FB as a multinational public-private actor and/or Libra as a public blockchain.
How is FB even remotely public? It depends on one’s point of view.
1.1 Private Issuer → Public Money
From the perspective of French and German finance ministries (above), FB is a quintessential private actor — a U.S.-based multinational bent on aggressive global expansion.
Like its BigTech predecessors Microsoft, Google, and so on, FB is seen as a private firm that exploits jurisdictional arbitrage and its network effects (3B+ MAUs) to create and then dominate new markets, not only vis-a-vis other nominally-private market players, but also, increasingly, vis-a-vis public market makers and actors.
From the perspective of European public authorities, FB’s expansion into what are seen as traditional public money markets and domains must be stopped to preserve the integrity of public moneys, public markets, and to preserve the public’s faith in these moneys, markets, and institutions.
On the other hand, FB has a large number of public aces up its own sleeves.
FB is a publicly-traded corporation (with all the supposed public spotlight effects and public accountability levers that implies). It has operationalized attacks against its dominant market position by signaling openness to various public-private frameworks and standards for understanding its different product lines — whether the policy debates hinge on FB as some sort of a public utility, public square (also here), public forum, public infrastructure, … or any combination of these.
Critically important, FB is one of the world’s most powerful engines of narrative control. The most powerful narrative in its vast armory pertains to the public’s perception of itself.
Thus, when actors like FB frame their networks as “permissioned (to start)” we must acknowledge their enormous power to shape perceptions regarding the perpetual transition to some idealized version of a public network (even if that vision is never specifically defined, or ever realized).
Whether networks like Libra or bluesky ever mature into fully decentralized public commons is secondary to their ability to convince the public they are on the public’s side, en route — together — to the promised digital public square.
1.2 Public ⟷ Private Partnerships
With respect to Libra (now rebranded Diem, reportedly launching by the end of 2021), FB’s private-as-public (PaP) / private-public partnership (PPP) posture couldn’t be clearer:
The quid pro quo is quite simple: (A) if public regulators grant FB + partners a broad license of launch and operate their global nominally-private money network, then (B) FB + partners will serve as an “instrument of development” on behalf of Western nations, by (C) pegging their nominally-private money instrument(s) to whatever basket of nominally-public moneys and instruments are required to advance putatively-public policy objectives, (D) thereby “counterbalanc[ing] China” (with its own multitude of PaP/PPP arrangements).
Under this logic, when 3B+ members of the global FB-using public wake up one morning to find per Diems airdropped to their WhatsApp, Insta, and FB, they will be doing their part to “maintain a good balance in the world” — one for all, and all for one.
Für die Publik Kultur.
When you use your per diem to buy coffee from a FB-approved merchant, you’ll buy your coffee with a public good currency run on public good payment network, “preserving the influence [of] the Free World of the Western Nations,” one sip at a time.
1.3 Priublic Superposition
The point of starting with the FB example is to collapse simplistic and grossly inaccurate private v. public binaries, and to show how private firms can and often do assume what are seen as traditionally public prerogatives (comms infrastructure; record-keeping; administration; money issuance; so on).
Sophisticated global actors know they rarely have to choose one or another spot on some imagined private ⟶ public continuum. Instead, they enjoy much greater freedom of maneuver in their default fluid superposition along the private ⟷ public spectrum.
How global corporations style their public attributes, claims, and aspirations is valuable context for understanding how public blockchain communities view themselves on the geopolitical map, not only vis-a-vis public regulators, but also vis-a-vis different public-private-partnership cartels.
Policy trendlines underscore the urgency of this task:
2. What’s So Public About Blockchain?
As we return to blockchain, it’s important to start with the empirical observation that there are as many different uses of ‘public’ in blockchain as there are tokens and jpegs in circulation, times all the languages and scripts in the metaverse.
Thus, what follows is inductive analysis of the many ways blockchain communities express their public mentalité in Anglophone discourse. These examples should not be viewed as canonical or comprehensive, but rather as illustrative of the rich pluralism in the space.
Taken together, these examples give us some snapshots of how blockchain communities view their public networks. From there, we’ll zoom out to ask how public these frameworks really are, can be, and perhaps should be.
2.1 Bitcoin as Public Fiat Money
Here are random samples from bitcoinia:
The examples show how terms like censorship-resistance, decentralization, permissionlessness often serve as proxies for distinctly public vibes, even without overtly using the word public or any of its analogues. One may not know what all or any of these “other adjectives” mean, but taken together, they sound and feel public-spirited.
Many bitcoiners often make fiat-like pronouncements that bitcoin is a public good and/or public infrastructure. Within the community, ritualized incantation of mantras like the ones above reinforces the community’s belief in the security of the network: e pluribus bitcoin. Very often, this is done contrastively, to juxtapose bitcoin as the authentically public blockchain in relation to other self-proclaimed public networks:
Mashed together, these various attributes (public, censorship-resistant, open …) are typically framed as serving a specific core function or essence of the blockchain. In the case of bitcoin, all of these superpowers combine to allegedly make BTC “the soundest [public] money to date” and the BTC network “the best [public] monetary system for the 21st century.”
2.2 Bitcoin as Majoritarian/Public Mandate
Other bitlievers are utterly ambivalent wrt bitcoin’s public-ness altogether. For some diehard btc maximalists, hyperbitcoinization is inevitable because … bitlief. It does not matter who sees btc as public or private, so long as the majority of the public sees btc balances in their individual digital wallets.
So when states like El Salvador eventually come around to mandate (!) that every actor accept btc as legal tender, the rest is public history.
Under one hyperbitcoinization thesis, states like El Salvador and municipalities like Miami are merely the first dominos. Panama, other states, and eventually most public administrations will have no choice but to bestow public legitimacy on bitcoin.
In their purest form, hyperbitcoinization (hyper[insert-coin]ization) theses have no need for elaborate public ⟷ private taxonomies, due to the unstructured simplicity of the problem bitcoin/blockchain set out to solve and the unstructured simplicity of the solution. In the language of the bitcoin genesis block, “Chancellor on brink of second bailout for banks” is a problem, but not necessarily due to any one of these discrete reasons:
- “Chancellor [public] on brink of second bailout for banks [private].”
- “Chancellor [privately-captured-nominally-public-regulator] on brink of second bailout for banks [private-captors-of-public-regulators].”
- “Chancellor [private-public] on brink of second bailout for banks [public-private].”
- “Chancellor [corrupt actor] on brink of second bailout for banks [corrupt actors].”
- …
In other words, the problem encrypted in “Chancellor on brink of second bailout for banks” can be stripped of much of its ideological baggage (not all, of course), and reduced to:
- “Chancellor [actor I don’t understand] on brink of second bailout [action I don’t understand] for banks [actors I don’t understand].”
- “Chancellor [arbitrary actor I don’t trust, because I don’t understand] on brink of second bailout [arbitrary action I don’t trust, because I don’t understand] for banks [arbitrary actors I don’t trust, because I don’t understand].”
- where lack of understanding and mistrust are direct results of these actors’ use of private crypto networks to coordinate their actions, depriving the public of any meaningful opportunity to understand, let alone verify, the actions taken in the public’s name ⟶
- problem: private crypto (hidden) networks
- solution: public p2p networks
Or, moving away from linear problem → solution traps:
- fantasy: max/no trust network
- reality: good/ok trust networks
- compromis: higher/min trust networks
Even when bitvangelists expressly reject public-private binaries, continuums, and taxonomies, and instead press empty claims like bitcoin is “non-political money” (because … physics … or whatever), there is still an implicit appeal to public legitimacy bound up in the hyperbitcoinization mission.
As far-fetched as the argument seems, it needs to be stretched to its logical conclusion because of the sheer power of bitlief:
When the majority of the world eventually joins this hyperbitcoin network, bitlievers will constitute a global socio-economic majority (the global body public). Non-bitlieving members of the public minority retain a choice to remain outside of the network, but for obvious reasons, it becomes socio-economically costly for them to do so.
2.3 Bitcoin as Public Network Infra
Thus far, we’ve seen several ways by which bitcoiners claim the bitcoin network is public. Now let’s peek under the hood to see how blockchains are actually public and why their design requires they get progressively more public, or perish.
The bitcoin network must be public because (a) transactions must be publicly announced and (b) once accepted and mined in a block, must become part of the public ledger (the blockchain), to solve the double-spend problem.
Here, public means accessibility (anyone, anywhere can announce transactions so long as they are connected to the network) and transparency (anyone, anywhere can verify if an announced transaction is trying to double-spend bitcoin by checking the public ledger by connecting to the … public network).
Please note, under this functional approach, the bitcoin network was public-aka-open (transparent & accessible) to other network participants even when it had a small number of transacting participants and miner nodes. The network was arguably as public at 100 nodes as it was at 1000 nodes, and so on. On the other hand, there is an undeniable qualitative difference in the degree of publicness between a 100-node public blockchain and a 10000+ node chain; between a transacting public of 1M versus 1B people. These interplays between public and open (and less → more public) are vitally important, and we’ll return to them shortly.
For now, it’s important to recall another critical security condition in bitcoin’s design. As a public blockchain scales, so does the sophistication and capacity of would-be attackers. Consequently, thwarting a powerful would-be-attacker at scale requires incentivizing the largest number of network participants (eg, the transacting public) to support the network because the network safeguards the public’s transactions.
Meaningfully sustainable security is premised on number go up. But the relevant number is not price, but an ever-increasing number of participants ready to invest in the security of their network.
3. Ethereum as Ultra Public Blockchain
Recall how bitcoin’s design requires incentivizing the largest number of network participants (eg, the transacting public) to support the network because the network safeguards the public’s transactions.
A key assumption in bitcoin’s game theory is that the growth in value of transactions bundled into each block outpaces the high costs in energy plus hardware required to maintain the network. Security of the network is a function of the value of the network as a whole.
Because of its general-purpose scripting capability, Ethereum offers a much greater range of value propositions to participants. In simple terms, the public can do anything it wants to do on the Ethereum blockchain, provided they can afford the gas. Because the network is much more valuable to participants, they are incentivized to invest much more in the security of their network than the participants of a limited utility network.
For our purposes, how does Ethereum’s general-purpose design parlay into public sensibilities, outlooks, and aspirations? More concretely, does Ethereum’s status as a general-purpose blockchain render it something like public network infrastructure, public utility, public commons, public good,[1] and/or … the metaverse’s public square?
3.1 Ethereum’s Public Economics
Let’s start with bad news. Ethereum is undeniably an ultra public blockchain, but it is also an ultra-pricey blockchain.
So it makes zero sense to extol Ethereum’s many public virtues until and unless we understand (A) why the tickets to this public metaverse are so expensive, and unsustainably so, and (B) how the Ethereum community plans to keep the public square open to the global public — the overwhelming majority of which is categorically priced out of the ethperience at the moment.
The short answer to (A) is 🦇🔊 and a longer thesis is available here:
Or if you’re a visual learner:
Analytically, 🦇🔊 (eth = ultra sound money) is copy-pasta of the ‘bitcoin = digital gold’ meme. It’s premised on the assumption that the main driver of Ethereum network security is a steadily-increasing objective valuation of the Ethereum blockchain ledger-maintenance token (eth, with ‘e’ pronounced like the ‘e’ in #earncrypto). According to 🦇🔊, when price of eth number goes up, security of the base Ethereum protocol (L1) goes up.
That logic is fundamentally flawed.
3.2 Ethereum as ‘Public’ Closed-Circuit
Axiomatically, the value of transactions and value of the network (and hence, network security) cannot be measured solely or predominantly by reference to, say, the market price of a given blockchain-native token (see, eg, here, slides 38–39).
Today’s btc network illustrates this very clearly. A public transaction ledger that rewards select network participants with a ledger-maintenance token (eg, btc) is sorta-secure, but that security model is premised on a number of key assumptions which have already been broken. One of these assumptions is the nonexistence of other viable public transaction ledgers (eg, the reason why btc/🦇🔊 maxis are existentially compelled to attack other public transaction ledgers).
If the ledger is limited to recording mainly transactions of the ledger-maintenance token, the result is a largely autarchic closed-circuit cryptoeconomy with few incentives for the public to transact save the bitlief that future network participants will find the ledger maintenance token more valuable.
🦇🔊 proponents try to resolve this dilemma by fragmenting the Ethereum ecosystem into various layers, where the base protocol (L1) layer will serve btc-like settlement functions (retaining/expanding multiple unique value propositions because the L1 is and will be used to settle high-value non-eth-denominated transactions in addition to eth-transfers), but where multiple L2 solutions within the Ethereum ecosystem offer the transacting public low-gas / subsidized-gas transactional ethperiences.
3.3 Ethereum as De Facto Private Closed-Economy?
Please note, under this approach, L1 becomes a de facto transactional ‘closed-circuit’ — cost-limited to those who can afford the high cost of transacting on the L1. The L1 remains public in the same sense the btc network is public today. But it is certainly not public in the sense that any meaningful majority of the global transacting public can afford to transact on Ethereum’s L1.
To be clear, Ethereum’s many already-deployed L2 solutions are tackling this problem head on. But it would be a fatal error to view the fragmentation of Ethereum into L1 / L2 (serving different “classes” of ethplorers) as an immutable fait accompli, no matter how stridently 🦇🔊 proponents press this case because they think it is the best way to pump their eth bags (hint: it’s not; see “digital gold”).
The point here isn’t some social critique of the ‘optics’ of the L1/L2 approach. Yes, the L1 + L2 transacting public is headed together towards the same destination, with the L1/L2 split a necessary compromise to make sure the ship stays afloat. Yes, the whole point of L2s is to expand L1 security guarantees to a broader transacting public. Yes, the key distinguishing public feature of this ship remains that anyone can get on board, without showing a passport at the point of departure.
Instead, the critique is that ossification of the Ethereum narrative into: (A) digital-gold-like base settlement layer for high-value L1 transactions + (B) narrative that Ethereum exists for the function of “powering the cryptocurrency, ether (ETH)” feeds directly into the inaccurate and ultimately fatal depiction of blockchain networks as PINO (Public In Name Only).
Please note, networks can survive DINO (Decentralized In Name Only) attacks (see Wikipedia). But no blockchain network can survive a PINO attack where the public is mobilized to attack because network participants have failed to carry their burden of showing the public exactly how it is more profitable to join the network, rather than attack.
Standing alone, these narratives — (A) eth = 🦇🔊 (B) Ethereum’s main function is to make eth = 🦇🔊 — are extremely problematic.
Taken together and then combined with the argument that narrative/L1 protocol ossification are somehow necessary to make eth valuable shows a fundamental misunderstanding of what actually makes eth valuable: NOT artificial scarcity (#supplybait; EIP 1559; deflationary tokenomics) but rather adoption due to ever-increasing utility (multiple open, accessible [cheap → vanishing-point-free] pathways for ever-increasing public participation in the network).[2]
This will be even more relevant following Ethereum’s merge from Eth1 → Eth2 since the only way the public will be able to participate in Eth2’s L1 validation rewards is by staking pre-existing crypto resources, as opposed to more direct non-financial pathways available to earn Eth1 mining rewards today.
3.4. Ethereum as Public Economy & Public Governance
The good news is ethereans have committed to solving the #earncrypto problem (meaning: anyone can earn crypto without any start-up financial capital whatsoever). NFTs, play-to-earn, decentralized cloud storage, and various bounty programs are just the tip of the iceberg.
Ethereans and many other blockchain communities know that solving the earn crypto problem is the only way any blockchain sets itself on secure footing, long term. The solution to this problem is a sustainable circular economy, maximally resilient to exogenous pressures. Even btc-ers intuitively know this, even if they are reluctant to acknowledge it publicly since doing so would undermine the SoV “digital gold” narrative and require upending the community’s immutability norm.
The other good news is that Ethereum governance is very much public (yes, alongside backchannel crypto governance chatter, but that’s unavoidable). This means that even widely-distributed memes like eth =🦇🔊 money are, at the end of the day, just memes by which some participants within the network choose to describe the network. There is no ‘official’ Ethereum party line, leader, narrative, or ontology.
Thankfully, Ethereum’s pluralism invites, welcomes, and incorporates many countervailing views.
If someone doesn’t like the way Ethereum is described or the path Ethereum is on, Ethereans make clear the “contributor,” “pull request,” and EIP buttons are right there, inviting everyone’s input — and rewarding good faith contributions. You should try it, it’s fun.
One does not need to own eth or otherwise signal that they are some ‘formal’ stakeholder in order to make a meaningful impact on Ethereum governance.
If ‘public’ is blockchain’s superpower in an abstract sense, then public blockchain governance is blockchain’s crypto superpower: ubiquitous, dispersed, but invincible when summoned and focused. Critics may decry that blockchain governance processes are rough and structureless, but so are all other public governance processes. All blockchains and public-facing protocol communities must be prepared to defend their governance processes from PINO attacks because these attacks aren’t coming; they’re already here.
Thankfully, ongoing public governance debates over sustainable public goods funding, public censorship-resistant social media platforms, and appropriate pathways for ethtegration by existing public-sector bodies all point to a pragmatic realization that regardless of Ethereum’s broadly public posture, Ethereum must continue building new pathways for public participation. Ethereum must be maximally public, or perish.
Where other blockchain/cyberspace communities do public governance better, please share. These are not nice-to-haves; maximum public participation is an existential need. Regardless of tribe; across the metaverse.
4. Public Blockchain as Public Interest Blockchain
So far, our snapshot looks something like this:
This map helps us see the pluralism in blockchain-native descriptions of blockchain’s public essence, with some more legitimate than others. It also illustrates the limitations of the narrow contrastive ‘public’ v. ‘private’ distinction, both in blockchain and beyond (eg, how BigTech / Wall Street / public agencies describe Ethereum as a “public network” when announcing their integration plans).
Throughout our analysis, we also acknowledged the importance of cryptoeconomic frameworks for understanding public participation and expectations:
- by fetishizing and foregrounding the short-term value of their blockchain-native token (digitalgoldization), blockchain communities end up framing blockchains as de facto closed-loop cryptoeconomies without offering any meaningful incentives for newcomers to become full-fledged participants in the network (eg, #buycrypto → #sellcrypto as opposed to #earncrypto);
- without offering public participants meaningful opportunities to earn crypto without any startup financial capital (eg, do socially-useful material work → #earncrypto), the Ethereum/blockchain ecosystem invites (mis)characterization of blockchains as private predominantly financial / speculative asset-swap networks, PINO (which are trivially easy to attack and capture through existing regulatory and global governance levers);
- different classes of incumbents are incentive-aligned and highly incentivized to characterize their private networks as public blockchains / public goods / public commons and to characterize public blockchains as private networks;
- the global public is watching all of the above in a state of information overload and dire economic need.
With this in mind, let’s now take a look at how public policymakers characterize blockchain’s public qualities when advancing their particular conceptions of the public.
4.1 Public Blockchains = Private Networks for Private Money
Here’s an example, ripped from today’s headlines:
Notice the striking parallels to pronouncements by fellow policymakers across the pond:
Ok, it appears public policymakers use the very same simplistic public v. private binaries we just collapsed and problematized. “Big deal!” you might think, “obviously it’s Leviathan being Leviathan.” Maybe.
Recycling the heuristics above, what’s more interesting is the ease with which the reductive tropes of “money” and “cryptocurrency” are used to frame the terms of debate regarding global public blockchains as a private v. public debate:
- declarative/descriptive: public blockchain networks are reframed as “cryptocurrency innovation” (new, hidden, munny-things created by “shadowy super coders” minting “stable value coins” out of thin air) — “Full stop”;
- declarative/political: “I think…” “we address…” “We believe”
- political/normative: “cryptocurrency innovation” can “undermine the stability of the [implicitly, public] system”;
- contrastive: “cryptocurrency innovation” [private] exists outside the “public policy framework” (descriptive) and needs to be brought “inside the public policy framework” (normative);
- contrastive/normative: “private forms of money” v. “public forms of money;” “private forms of money” are ancient history without “long-term viability[.]”
Where might these allegedly “out-of-touch” regulators be getting the wild idea that “public blockchains” are “cryptocurrency innovations” and “private forms of money” — ? Hmmm…
Well done, fellow adversarial thinkers! We really raised the attackers’ cost-to-attack with this “non-political” and “unseizable” 🦇🔊 lawgic.
Sarcasm aside, notice what is conspicuously absent from the debate: descriptive and functional analysis of what global public blockchains really are, why they are actually useful, who uses global public blockchains today, how they are used today by ‘private’ and ‘public’ actors, what % of the global public uses blockchains, what is driving adoption, and how blockchains can be used to advance public policy goals. Critics avoid the questions above not because they don’t understand what global public blockchains are, but because they do.
The blockchain community has answered, is answering, and will continue to answer these questions. Yet to assure these answers reach their intended audience — our peers, the global public — our voices must be louder and clearer than ever before, and much louder than the shrieking ultrasound shill of crypto-financiers. If business continues as usual, the end result is today’s observed reality: a film-thin policy debate surface of public blockchain = cryptocurrencies = private forms of money, which have “a lot of cost, a lot of problems, and so forth” (Gensler, September 21, 2021).
4.2 Blockchains are public (eg, open), but not Public
Let’s dive deeper.
Here’s a criminally underwatched conversation between two crypto-hip policymakers, Peter Van Valkenburgh (Director of Research at Coin Center) and money law theorist, Rohan Grey. Both are policymakers in a very direct sense.
Coin Center is the highest-profile crypto advocacy group in the U.S., and Van Valkenburgh frequently testifies in Congress. Grey is the president of the Modern Money Network and is one of the minds behind #MintTheCoin.
The conversation is about ‘public money.’ It starts (2:58) with a search for common ground between, say, MMT advocates and crypto natives around the need for “anonymous cash-like ‘public money’” —
- Van Valkenburgh: “[listing bitcoin, followed by privacy-preserving projects like zcash and monero] these are public networks because they’re open to anybody [transparency] and anybody can run the software [accessibility] and get the benefit of a payment address to receive payments for free [utility] without intellectual property; but you’ve pushed back […] that it’s not really ‘public’ money because public money in the macroeconomic sense or MMT sense means something a little bit different.”
While the question is framed with examples of specific blockchain projects, it is interesting to see how, in the context of these projects, three arguably distinct functional layers — (1) public network; (2) payments network; (3) money network — are collapsed into one core function: public money.
- Grey: “when I use the word ‘public’ there I’m talking about it specifically in terms of institutions and structures that are designed to be ‘public’ in the sense of all-encompassing, so ‘public’ in the sense of any political community, everybody is included in that; and […] that’s a little bit different to […] ‘open’ or maybe even ‘civil society’ — entities where it isn’t designed to necessarily be exclusive, but isn’t designed to be universal and as a core part of the social construct that you not only can enter into but also can’t enter out of.”
In the context of money networks, the distinction between ‘open’ and ‘public’ is useful, although a bit slippery. It may be help describe certain blockchains with small numbers of validator nodes, small number of blockchain-native-token holders, and a small transacting body public as perhaps not being operationally public, while certainly remaining ‘open.’ On the other hand:
If we focus on Grey’s characteristics of what makes something public — universality, community, … general applicability (“all-encompassing”) — the idea of public-as-universal seems to clearly apply to cryptocurrencies. As a rule, blockchain protocols are “open to all; open to common use” (Black’s) and relate to “everybody” in “any political community” (Grey), such as a dispersed global community of people who may have no other option besides cryptocurrency to earn a living, or transact.
The law does not provide a clear distinction between a ‘public network’ versus one that is merely ‘open.’ Grey’s suggestion to look at institutions and structures that are designed to be ‘public’ moves us further along, but still begs the question: designed by whom? How? Van Valkenburgh and Grey’s citations to legal authorities provide one possible answer:
public money: “money that is integrated into the unit of account system that permeates the entire legal system, and is accountable to the public legal system” (23:30)
Paraphrasing Grey, because cryptocurrencies can’t do what “public money” does, they are “private cryptocurrencies” (24:00), running on “private networks.” Van Valkenburgh’s response is very mood: “it does complicate our work even more […] to have this third public-private distinction” (24:21).
It is complicated because the distinction is inherently indeterminate. Grey acknowledges this at another point in the conversation when he collapses private law into public law. What is the scope of a “public legal system” or the “entire legal system” — ? Grey’s suggested upper bound at the start of the talk, a “social construct that you not only can enter into but also can’t get out of” sounds like state borders, mapping onto more-or-less well-defined “[nation-state] public legal system[s].”
But how does accountability to the “public [and/or state] legal system[s]” (eg, the Chartalist idea that public money is that which states accept for payment of obligations) work in the context of “all-encompassing,” “universal,” global public blockchain communities?
4.3. Public Blockchains, Private Money, Under Law
The suggestion that we can answer what is “public money” or “public blockchain” by looking at how they permeate “the entire [global] legal system” and are “accountable to the [global] public legal system” seems like it stretches the argument too far. But in his explanation of what it means to be public, Grey makes clear he is thinking of public “social constructs” on planetary scale:
[as an example of an all-encompassing political communities that one cannot exit, Grey describes] ecological sustainability on the planet: I don’t have a right to not be intertwined with you; I don’t have the right to consider the planet as something external to me … whenever we’re talking about the planet and climate as public goods, we’re talking about something that affects everybody.
Recall, our goal here is not to define “public money” or explore whether cryptocurrencies are “public money” or if crypto can do what “public money” does (the gist of Van Valkenburgh and Grey’s discussion). Instead, we are exploring the meaning and usage of public in “global public blockchain.” It is a fundamental category error to conflate these two concepts.
We know that from a global perspective, a doctrinal approach to this question is basically impossible today. Which is why this eclectic semiotic exercise is not only useful, but unavoidable — as frustrating as it may be for everyone.
5. Global Blockchains Pro Bono Publico
Having looked at how and why different actors and institutions classify cryptocurrencies as private money, public blockchain networks as private networks, and blockchain actors as private actors, it’s clear that sometimes the conflation is benign. The blockchain community makes as many category errors in this regard as do external observers. Other times, misrepresentation is intentional.
Confusion, conflation, elision, and category mistakes have real costs, however. So does waiver: the voluntary relinquishment of known rights.
Nobody should hand waive away the public in global public blockchain by limiting its scope to supposed “technical” properties (public as in “transparency of the ledger,” or public as in accessibility, “writing state onto the ledger,” or public as open-source software). Doing so is self-defeating.
Instead, whether you’re a crypto OG, an outsider, or just crypto-curious, just ask: what would a max public blockchain look like?
The rest is public history:
- how does public blockchain embrace the primary social interests of safety, order, morals, economic interest, and non-material and political interests?
- if the global public blockchain community solves the #earncrypto problem at scale, would it be providing for the prosperity, well-being, and convenience of the public at large (since anyone can become a participant in the network)?
- or, would the global public blockchain community still be seen as giving advantage to a “limited class” of network participants ( → private)?
- is today’s public blockchain cyberspace already a public square — a vast democratic forum of the Metaverse[3] people gather, publish, and speak?
- will the global blockchain community allow critics to characterize its bona fide public commons, public interests, public infrastructure, and public aspirations as just empty buzz words and marketing hype?
Or will the real global blockchain stand up for its peers, pro bono publico?
[1] Kevin Werbach, The Blockchain and the New Architecture of Trust (MIT 2018), pp. 154 (describing “trusted shared ledger” (blockchain) as public good), 168 (drawing analogy between “government-operated property ledgers” and “public blockchain ledgers” based on transparency).
[2] Consider a thought experiment where future ethereans coordinate to approve a 5:1 eth split to fund an airdrop fountain which results in a 20x increase in the number of network participants (100M → 2B). How would this impact the value of eth relative to today? The point is that narrative ossification imposes an unreasonably high burden of proof on future proponents of these changes, at a time when blockchain communities needs to retain maximum freedom of maneuver.
[3] Packingham v. North Carolina, 137 S. Ct. 1730 (2017).
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