The Four Pillars of a Decentralized Society

With the official unveiling of the Libertaria Initiative last week, we have a lot of amazing new technology and ideas to share. We’ll be revealing these over the coming weeks, but I want to start by introducing our overall decentralization philosophy. This is the key to understanding our objectives and also provides an insight into why our technical solutions work so well.

Libertaria is a huge project, and it’s going to produce a lot of technologies which are extremely useful on their own.

But the ultimate goal is that people who want to should be able to combine these technologies to live a fully decentralized life.

For a lot of people, that’s going to conjure up an image of adventurous individuals living independently off the grid, like a cyber Swiss Family Robinson, and that’s something Libertaria will fully support! But we’re also imagining something that’s simultaneously more mundane and much more ground-breaking: whole communities, living together in a way everyone would recognize as “normal,” except they are free from any central authorities or control.

In fact, we go further: we imagine a decentralized society based on many of these federated, self-governing communities following shared principles and core values. As long as these principles and values are agreed upon, different communities or chapters are free to follow their own charters, allowing them to adopt any political or economic approach to self-governance.

This is, of course, extremely ambitious. Libertaria is the only project trying to create the full decentralized stack in this way. And extraordinary claims need extraordinary proof, especially in a time where projects are raising millions with just a thinly sketched white paper. Luckily, at Libertaria we’re in a position to provide all this. We already have working prototypes of much of the technology needed to make this decentralization dream a reality.

We’ll be showing off different parts of Libertaria over the next few weeks. For now I just want to give a theoretical overview of the kind of society this technology is being built to support.

There are many ways to approach this problem, but here at Libertaria we’re thinking in terms of the pillars which must all be in place for a society to function. We call these pillars rather than the more traditional layers, because there isn’t a clear hierarchy. Each pillar provides a vital function, and any of them can be built on their own. But if any one of them is missing the whole edifice becomes shaky.

The Pillars

So, what do we need to form a society?

• First, we must be able to communicate with each other, share ideas and decide whether we want to cooperate.
• Next, we need to discuss terms and define the terms of our cooperation.
• We then produce what we agreed to cooperate on, in the way we agreed to do it.
• Finally, we trade and share the goods and the services we have produced, rewarding and supporting everyone who contributed.

Thus, a modern civilized society is based on four pillars:

Communication, Law, Production, and Economy

This is true whether the society is centralized or decentralized. However, to live in a truly decentralized way, all four of these pillars must be decentralized.

Let’s look in more detail at how we can decentralize these four pillars.

Decentralized Communication

Before we can do anything with someone else, we need to be able to communicate. In a decentralized society, this communication needs to be private and not travel via any centralized third-party. There are two main requirements: First, a truly decentralized internet, as it was originally conceived, without ISPs and centralized data hoarding. This will involve peer-to-peer networks like BitTorrent or Libertaria’s own Mercury network. Second, we need strong cryptography so we can trust that our communications can only be seen by the people we want. There are many well-tested options for this, including newer approaches if we’re worried about attacks even from quantum computers.

With these technologies in place, people will be free to communicate with whoever they want, however they want.

The good news is that these issues are largely solved. There are efficiencies to be gained, and mainstream adoption is still a long way off, but the technologies for decentralized communication exist and work well. Our Mercury network already supports truly decentralized chat, and the infrastructure can support almost every kind of app.

Decentralized Law

Once we can communicate freely with each other and need to reach an agreement, we need to be able to rely on common standards that we can choose to form a contract, or define new ones ourselves. We then need to ensure that this contract is enforced.

Here, the current focus in crypto is on the contracts themselves. Various protocols, most famously Ethereum, support so-called smart contracts which automate the maintenance and resolution of contracts. Unfortunately, this is really the least interesting and difficult part of a contractual agreement.

Streamlining the contract making process is certainly an impressive achievement, but what happens when things go wrong? If one party breaks their contract, in theory the cryptocurrency held in the contract can be transferred to the other party. But what if the parties disagree about whether the contract is broken, or disagree about what the contract stipulates in the first place?

The flippant answer is “Write better contracts!”

But flawlessly enshrining a contract in code is beyond the skills of most non-technical people (and most developers, judging by the huge number of bugged smart contracts). If most people are ill-equipped to use a system, that’s a problem with the system, not the users. Most current smart-contract systems will be very useful for large corporations, who have many business processes which can be automated and streamlined in this way, but they will be far less useful for regular people (and that’s even before we get to the gas fees that power the network, which boils down to a simple resource race that only large entities can win).

Ordinary people have complicated needs and will make mistakes and change their minds. Thus there will always need to be some kind of arbitration system, and this is extremely difficult to decentralize. We imagine providing people various choices here, including a choice of adjudicator, a choice of enforcer and even a choice between multiple legal systems.

These ideas may sound radical, but they are not: This is the original way our legal systems operated in the past, before the invention of centralism. Libertaria’s focus on smaller communities will make many of these old approaches viable again, only this time radically improved through the use of technology.

Libertaria is tackling this in its Themis project, which we’ll be writing more about in the coming weeks. This is another area where Libertaria’s focus on smaller communities can pay off: by experimenting with various approaches in different communities, we can see which ones work without jeopardising the whole network. We’ve identified several such communities which can benefit from small-scale implementations of these systems. We’ll be showcasing some of these over the next few months.

Decentralized Production

Centralized production and logistics has transformed our world, in many ways for the better. But many people are ill-served by this system, especially in developing countries, because they either have no choice but to work for minuscule rewards in the early links of the supply chain or they’re forced out of the system entirely.

Decentralized production is important to provide opportunities to these people and others who would like to forge out on their own. Decentralized production can circumvent unfair tariffs and generate wealth, even spontaneously, where and when it is needed, without third-party involvement.

There are two main types of production to consider here: the materials and processes used to create products and the energy used to power these processes. Both can be decentralized, and Libertaria has links with other projects in both of these areas.

Decentralized production would entail decentralized resource cycles. Resources would be used in closed cycles and are reused and recycled. The profit and management of natural resources can also be decentralized. In a few weeks, we’ll be looking at an interesting Romanian project tackling this very issue.

Together, these will allow us to move from single companies controlling huge numbers of underpaid workers to smaller decentralized systems where people can produce their own goods, grow special food and provide services at/from home. People can set up co-working spaces and co-producing firms. As well as empowering people, this will also be better for the environment, as smaller more geographically contained supply chains will encourage efficiency and reduce waste.

People will collaborate to produce whatever they’re skilled at making, but the most important products for a fully decentralized society are food, clothes and building materials.

Knowledge about how to produce these should be public domain, and low-cost tools and solutions should be available for those who want to produce these goods. But with decentralized communication in place, this is easy to achieve.

Decentralized Finance

Finally, we need to be able to trade freely without intermediaries including banks, if we so choose. The financial system is a network of contracts. The people are actors and their transactions are contracts. As you can imagine, given people’s love of money, this is the most well-explored of the four pillars!

While the technologies here are widespread and proven, much has been made of the scaling issues. Bitcoin can handle a mere 10 transactions per second, and the various cobbled together workarounds are only temporary solutions at best. Some sacrifices in speed and efficiency are necessary in exchange for decentralization, but a global transaction network needs to be able to cope with global demands. Otherwise it will only be of use to those who can afford the transaction fees, and we’re back to square one, with those with less power and resources priced out of the system.

Once again, Libertaria’s vision of practical decentralization holds the key. Libertaria’s blockchain protocol is called Hydra, and it’s designed with Libertaria’s vision of federated decentralized communities in mind. By working to support these smaller groups, Hydra provides all the members of the network with the security of a global blockchain while keeping as much of the data as possible within the individual communities themselves.

Tying it all together

So those are the four pillars. But that’s not all we need. To make these systems work completely without central authorities, we need two other important things: trustless identity and reputation and decentralized governance.

As long as these problems remain unsolved, it will be difficult to achieve true decentralization at any large scale, even with the four pillars in place. Libertaria is also working on these issues, and our technologies are designed with these problems in mind, but work is just starting in this area.

Luckily, we don’t need to scale as much as other projects, or at least not in the same way. Many of the communities we’re focusing on are small enough that they can still achieve meaningful results by simply decentralizing the four pillars. Better yet, this will put us in a position to experiment and gauge the true scale of the identity, reputation and governance problems, rather than dealing with them purely theoretically or in isolation, which seems to be the current approach of other projects. We’ve identified specific communities which might benefit from small-scale attempts to decentralize governance, reputation and identity, and we’ll be presenting these as case studies over the coming months.

What Next?

Libertaria is huge, and there’s going to be a lot to see and learn over the next few months. If you’re interested in learning more about our technologies or the practicalities or theory of decentralized living, there are lots of ways to get involved. Sign up to our newsletter, follow this blog or the Decentralized Society Blog, or come and join us in our Discord. We hope you’ll join us on our decentralization journey!