Bitcoin Governance: Neither A Democracy Nor A Dictatorship

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In loom of the upcoming Bitcoin #HashWars, there’s been a lot of talk about the “failings” of Bitcoin, Nakamoto Consensus, and Bitcoin’s social governance. Below I will explain why I think that everything that is happening is, in fact, part of the original design — and I will do so using examples from nature and history.

Long ago, mighty empires such as the Romans, Turks, and Mongolian Hordes owed much of their financial, social, and military strength to the wisdom of wolves.

How so?

In the Roman foundation myth, it was a she-wolf that nursed and sheltered the twins Romulus and Remus after they were abandoned in the wild by order of King Amulius of Alba Longa. She cared for the infants at her den, a cave known as the Lupercal, until they were discovered by a shepherd, Faustulus. Romulus would later become the founder and first king of Rome. The image of the she-wolf suckling the twins has been a symbol of Rome since ancient times and is one of the most recognizable icons of ancient mythology.

From the Mongolian side:

In the Secret History of the Mongols, the Mongol peoples are said to have descended from the mating of a doe (gua maral) and a wolf (boerte chino). In modern Mongolia, the wolf is still seen as a good luck symbol, especially for males. In Mongolian folk medicine, eating the intestines of a wolf is said to alleviate chronic indigestion, while sprinkling food with powdered wolf rectum is said to cure hemorrhoids. Mongol mythology explains the wolf’s occasional habit of surplus killing by pointing to their traditional creation story. It states that when God explained to the wolf what it should and should not eat, he told it that it may eat one sheep out of 1,000. The wolf however misunderstood and thought God said kill 1,000 sheep and eat one.

But why does this matter in the world of Bitcoin?

Bitcoin is inspired by nature, just like past empires were. From Small World Network design to the non-reliance of any one leader.

Competition vs Collaboration: Two Sides of the Same Coin

Bitcoin’s self-governance system is sound – through competition, paradoxically, all parties learn how to cooperate and collaborate (as you see now in the self-organisation of pools and miners for the Bitcoin-BCH #HashWars):

The strength of individuals is the strength of factions. The strength of factions provides strength to the individual.

“For the strength of the pack is the wolf, and the strength of the wolf is the pack.” ~Rudyard Kipling’s The Jungle Book

Over time, people misunderstood the governing structure of wolf packs, much like people misunderstood Bitcoin over the first decade (perhaps Satoshi is responsible for that, having disappeared for a while).

When the average person thinks of wolf packs, they may think of vicious, alpha-driven hierarchical groups. Unfortunately, this isn’t the whole truth.

Although the notions of “alpha wolf” and “alpha dog” seem thoroughly ingrained in our language, the idea of the alpha comes from Rudolph Schenkel, an animal behaviorist who, in 1947, published the then-groundbreaking paper “Expressions Studies on Wolves.” During the 1930s and 1940s, Schenkel studied captive wolves in Switzerland’s Zoo Basel, attempting to identify a “sociology of the wolf.”

A key problem with Schenkel’s wolf studies is that, while they represented the first close study of wolves, they didn’t involve any study of wolves in the wild. Schenkel studied two packs of wolves living in captivity, but his studies remained the primary resource on wolf behavior for decades. Later researchers, would perform their own studies on captive wolves, and published similar findings on dominance-subordinant and leader-follower relationships within captive wolf packs. And the notion of the “alpha wolf” was reinforced, in large part, by wildlife biologist L. David Mech’s 1970 book The Wolf: The Ecology and Behavior of an Endangered Species.

Wolves (and other animals, including humans), display social dominance, he notes; it just isn’t always easy to boil dominant behavior down to simple explanations. Dominant behavior and dominance relationships can be highly situational, and can vary greatly from individual to individual even within the same species. It’s not the entire concept of wolves displaying social dominance that was dispelled, just the simple hierarchical pack structure. [source]

Wolf packs are neither democracies nor dictatorships. It is only during hunts that hierarchies provide a purpose (coordinated action) but, outside of that, the hierarchy breaks apart. Some would say their form of governance is more meritocratic, which has also been echoed in the Bitcoin world.

So, as you can see, half-truths often make their way into the Wild, even if not entirely accurate (if you’re used to social media, you’ll know this to be self-evident). In my opinion, this is what happened to Bitcoin.

Sure, one could argue that our world is filled with many species other than wolves. However, in the United States, wolves proved so pivotal to the ecosystem, it changed rivers. This is why I use wolves as an analogy in terms of what Bitcoin is doing to the world – it is changing the flow of [financial] rivers. It is harmonizing our global financial ecosystem.

And with this shift in money itself – money being one of the key factors of how civilisations have evolved and/or operated – we may see an answer to the question, “if democracy has its flaws, what comes next?” Bitcoin will push that new governance solution forward, and it may not be democratic.

Faiā is a consultancy that helps build communities, improve productivity, and integrate emerging technologies such as Bitcoin. They are the first in Asia-Pacific to provide BitcoinSV-exclusive integration services, and are strong advocates for Community-Centred Design. Learn more here.

Faiā

The official company blog for Faiā.

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