Is the blockchain part of the online commons?
Some thoughts on digital common goods and how we can share them wisely
A few days ago, I wrote a little article on how the blockchain and related technologies are helping to transform society in many forms.
From the several reactions to it, I really liked this one coming after my slight and veiled comparison between the blockchain and the commons:
I do believe he makes a great point: can the blockchain be really considered part of the “online commons”? Is the blockchain a limited resource? And, if so, will it be exposed to the same risks natural resources do? Will the “tragedy of the commons” apply?
In this second article I am trying to address each question one at a time.
DISCLAIMER: Unlike my previous article, this one is rather technical instead of philosophical or political, so I will presume you are already familiar with the bitcoin jargon. In case you do not, here is a nice glossary.
The blockchain as a digital common good
Anyone familiarized with the concept of commons will recognize the blockchain matches its definition forthwith:
The commons is the cultural and natural resources accessible to all members of a society and held in common, not owned privately.
I always run away from likening the intellectual world to the tangible one (I may write something on that matter soon), but I think this is not the case as the definition of commons itself already includes a reference to cultural (and thus intangible) resources.
So, yes, the blockchain can be considered a digital common good, just like we could argue Wikipedia, GNU/Linux, OpenStreemMaps or the Internet itself are. They are open, free and neutral resources nobody owns but everyone wants to protect because they are useful and valuable as long as they are accessible and extensible by anyone.
The limits of the blockchain
Although avoidable, they exist
The blockchain, in spite of being an intangible, digital good, it is not exempt form having unavoidable limits. Let me make it absolutely plain: it is not an unlimited resource.
I need to clarify that when I talk about “limits” I mean maximum usage rates and not things you cannot do with the blockchain, which are millions. I recognize the potential of the technology but I am not one of those overoptimistic dudes who want the blockchain to make their breakfast and iron their clothes.
I read that @aantonop once made the following comment:
I have no worries that bitcoin can scale, and the simple reason for that is that I know that IPv4 can’t, and yet I use it every day.
Leaving aside the funny and ironic quote I have not been able to avoid citing, it is said that bitcoin and blockchain face three main limiting facts:
- The blockchain grows constantly. The larger it grows, the larger the requirements become for storage, bandwidth, and computational power that must be spent by nodes in the network.
- The bitcoin protocol specifies a built-in hard limit of 1MB per block, which means there is a limit on number of transactions per minute.
- High processing fees currently paid for bitcoin transactions, and the potential for those fees to increase as the network grows.
The tragedy of the commons
The tragedy of the commons is a term used to describe a situation where individuals acting for their own interest behave against the society interests by depleting a common resource. In other words, a common resource can be of benefit to everyone but if everyone start exploiting it irresponsibly, then nobody can truly benefit from it or at least not with the expected standards.
Examples illustrating this concept are all around us, but this might probably be the most self-explaining one:
Fishes + overfishing = no fishes to fish.
Most of the situations where the tragedy of the commons appears could be more or less easily avoided by one or both of these ways:
- Imposing quotas on resource consumption. E.g.: environmental taxes, bans on juvenile fishes catching, etc.
- Allowing the collectivity to share and manage the resource wisely by following democratic, crowdsourced and self-imposed rules of conducts or maxims, in Kantian terms.
I tend to think the second one works way better than the first, as we are much more likely to follow rules we have been given the chance to choose than those imposed by third parties or factual powers.
How the tragedy of the commons may apply to the blockchain
When it comes to software, systems and models, we often use this fancy word to signify how long something can run or grow without falling apart:
Indeed, that is an overwritten euphemism for other term much more people is already familiarized with: sustainability.
Then the question pops promptly: is the blockchain sustainable? In which manner may the mainstream use and misuse of such technology damage its proper working and thus spoil its benefits?
Well, let’s go back to the three aforementioned limits.
The blockchain growth
The bitcoin blockchain is presently near 47GB in size. This imposes a significant entry barrier for new nodes, as knowledge of the entire history of the protocol is required for figuring out balances, verifying and validating transactions and, of course, mining.
I know, I know, there are light clients and the pruning method described in Satoshi Nakamoto’s whitepaper.
But that creates a trend towards centralization, which is itself a minor but far from negligible risk. The more centralized the network becomes, the easier some players will be able to exploit it for personal benefit.
The 1MB/block limit
Bitcoin blocks are hard-capped at 1 MB in size. This limit was implemented in a very early stage to avoid the risk of someone spamming the blockchain with very large blocks and to prevent the network from growing in size too quickly until some technology advances to the point where it can handle larger transaction sizes while remaining robust and decentralized.
That limit also means that only 7 transactions can be actually written into the blockchain in a second. Such a low limit should be good because it makes the transactions scarce and valuable, so the reward for the miners is kept high and guarantees they work for the sake of security of the network.
But with more and more applications using the blockchain not only for financial services but to get a proof of existence of any kind of data by injecting “somewhat fake transactions”, the transaction volume is increasing significantly and will sooner or later overtake the limit, causing transactions to be queued up to the extent it will take days, months of years to confirm them. That is exactly the kind of tragedy we need to prevent.
In addition, the more quickly the transaction volume will increase, the harder small coin holders will find to run the full verification algorithm just to check their modest account balance.
Luckily, there are lots of suggested solutions ranging from increasing the 1MB limit to sharding the blockchain.
The increasing processing fees
This derives directly from the previous point. As the possible transactions per second will go towards running out, the processing fees will increase to the point where some transactors will not be willing to pay them and move to other networks or even worse, private blockchains.
This is not the most pressing issue right now, but it may be when the mining rewards will be testimonial in a couple decades time. By then, fees will have to amount to something significant in order to reward mining, because mining will still be necessary to confirm transactions.
There is a more detailed article on this topic by Jim Stogdill that worth the read.
The comedy of the commons
There is an opposite concept to the tragedy of the commons: the comedy of the commons.
In this model, the common is benefited instead of depleted by the individuals’ contributions. This often happens when the cost of the contribution is way less than its value over time.
As of the case of the bitcoin blockchain, the more people ordering transactions and mining blocks, the more distributed the network will become and the less likely a 51% attack will happen, even if they do it to their own advantage.
As you can see, we are facing a special case where an increment in the exploitation of a resource by a diverse society clearly protects, strengthens and enriches it.
All in all, democracy, when applied to P2P, not only results in a better wealth of the networks, but also in a better health of the networks.
Summing up
Yes, we must admit that mainstream use and misuse of the blockchain will imply certain risks that may harm its proper function, but it will also bring undeniable benefits as exposed before.
In either case, before that situations even start to happen, we should take all the necessary actions to ensure the network’s security and sustainability.
The bad news is that the whole bitcoin community is far from reaching an unanimous agreement, and the most probable outcome will be a hard-fork.
Nevertheless, there is no need to throw your arms up in horror. As I mentioned in my previous article, one of the reasons why we love the blockchain and similar technologies is because we can (and must) examine their working, learn from them, copy and REMIX.
If we fail and so does the bitcoin blockchain, we will just need to start something better and keep on learning.
After all, believing that your first solution to a problem is the best one is pretty naive, isn’t it? — Let’s iterate!
