The Brain Drain in the Legal System has an unlikely ally: the Scaling Trilemma; but is it enough to stop Decentralization?
Maybe the idea that decentralization has within its power the ability to disrupt the power of authority is still a new concept to many people, but I’ve been studying and blogging about the societal implications for more than a year now. The biggest problem facing the people of the world right now is the parasitic plutocracy gaining an ever increasing stranglehold over its subjects and creating a digital panopticon. If it succeeds, it will create a tyranny that Hitler could not have even imagined in his greatest hopes. But the technology adopted by the ruling elites has been a Trojan horse with a surprise in store for everyone.
The first signs of trouble happened decades ago when low level factory jobs were being replaced by automation, putting factory workers out of a job. That trend hasn’t stopped. In fact, the trend has been climbing the ladder of authority for decades, but was limited by the Byzantine generals problem.
Since the invention of bitcoin in 2008, there have been various new methods of achieving consensus without relying completely on a centralized authority which now potentially puts the jobs of many politicians on the chopping block, even up to and including the president of the USA. They will of course not go silently into the night. If patterns persist, the nature of their jobs will change significantly in the near term, but not be completely eliminated.
A Legal System Lagging Decades Behind in Understanding
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The legal system has a serious problem on their hands. Many of the laws that have been written over the past several centuries are about to become irrelevant. While this has been happening for some time now (when was the last time you’ve heard about someone being prosecuted for having a mustache walking on the outside of a street on a Tuesday?), most of these laws were just harmlessly ignored or were only used politically by those in power to get rid of opposition. They were occasions for selective prosecution for a specific purpose. Stalin once infamously said “give me the man, and I will find the crime”.
However, it’s now the case that the laws that are currently being written are gaffes that have little resemblance to reality and are unenforceable. Should we be glad? Perhaps, because their overreach has gone on for too long into matters they have no comprehension of or even ethical legitimacy on deciding. A recent example is of a law making it illegal to transport bitcoin over borders without declaring it to customs agents.
Someone made a mistake in the lettering of the law (because it’s impossible to transport bitcoin over borders). Bitcoin is an idea that only exists in cyberspace and has no physical reality in itself. Money instead of having physical properties such as occupying space and having weight and the ability to be moved from place to place has been inverted. Now instead, bitcoin never moves across any borders, but only exists as an idea, and that permission to the bitcoin which only exists on the blockchain is determined by cryptographic keys.
Libertarian Reaction vs Scaling Trilemma
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The arrival of bitcoin in 2009 was hailed by libertarians and anarchists as being a great victory in freedom from oppression implemented by the banking systems of the world that use KYC (Know Your Customer), AML (Anti Money Laundering) and CTF (Control of Terrorist Financing). Bitcoin has buried in its code an implementation that favors localization. This is actually a good thing, but it creates a problem for an entire world that wants to use it. Because bitcoin is borderless, it also attempts to conduct global finance while not being fully able to (yet).
The initial reaction to the financial crisis of 2008 was a fundamentally correct one. Iceland was probably the only country that got the recipe for handling bankers correctly. They jailed the bankers and bailed out the citizens. Here in the USA we did the reverse; we bailed out the “too big to jail” banks and enslaved the people to future bail ins and intergenerational debt. Bitcoin was written to value trustlessness to an extreme. It is a “no trust is necessary” to use it system. Ethereum took this to the next level and used the underlying code to create trustless smart contracts that need no central authority to run. While bitcoin is meant to replace banks, ethereum is meant to replace government.
However, bitcoin and ethereum aren’t ready to do that just yet. They fell victim to the scaling trilemma. Many things in engineering have trade offs. For instance in computing, it’s common for applications to run into the security vs usability dilemma. You can make your data secure, but it becomes less convenient if you do. Bitcoin and Ethereum sacrificed scale to achieve decentralization and security, so it’s not ready for the world (yet).
A Compromise Leading to the Potential for Recentralization
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I sometimes wonder “what if” our internet connection was capable of handling 10 TB blocks per second and NTFS or FAT32 had allocation size units in GB. In a situation such as this, bitcoin could achieve mass adoption without the potential for centralized mining in the same way Bitcoin Cash has done. We’re probably at least a few decades away from this level of speed though. So the scaling trilemma had to be revisited. Decentralization is not all or nothing, but a matter of degree. Some cryptocurrencies are more decentralized than others and some such as Ripple use that word as a buzzword while catering to the central authority of the current banking system.
Dan Larimer revisited this issue by asking the question, “how much decentralization and security can we achieve in the current state of the technology and still achieve scale?”. He has come up with an answer with DPoS (Delegated Proof of Stake) upon which Steem and Bitshares currently run, and soon to be released, EOS. In Steem, this is sometimes called “Proof of Brain” but the general idea is that you elect 21 witnesses to validate blocks for you, all of whom should be motivated toward good behavior in order to maintain the coveted position of witness, or they get voted out.
Does this system sound familiar? It should; this is a democratic system, but there are some very big differences from our current extremely corrupt model of democracy. How would politicians like the fact that there are just some things in the code that can’t be changed? Not very much I would imagine. The fact that it’s now possible to represent in a hard coded way the ideas of a sound republic that cannot be revoked by anyone participating is a revolutionary idea that hands back power to the people. Another difference is that this republic can be “opt in” instead of “opt out” and the enforcement of arbitrary physical borders becomes less relevant.
Can DPoS Centralize into an Oligarchy?
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One of the big differences between Steem, Bitshares and soon to be EOS is that it takes a 15+/21 vote to change things. While it's possible that we could see collusion on platforms using this model, that bar is a really high one to hurdle. As a comparison, our current system of government in the USA only requires two or more representatives to collude to write anything into any bill. Lobbyists often bribe politicians in order to get things passed that are to the detriment of the vast majority of people while being beneficial to only a very few.
If you've been on Steemit for any length of time, you've probably heard of the Haejin and Bernie Sanders debate. The fact that Haejin is the apparent winner by the outward numbers hasn't silenced Bernie Sanders supporters. This outcome may be due to the fact that so many libertarians are on this platform.
In the near term, the adoption of DPoS as a model for governance would be enough of a shakeup that very few would be able to seek political advantage in a way that violates the voluntarist model of social engagement. As long as there are other systems available, a monopoly can't be enforced. As long as it's opt in, rather than opt out, the model of freedom is preserved. The answer to injustice in this case is to not be forced to have skin in the game.
The proliferation of blockchains for various purposes will likely have the political and legal systems scrambling for relevance in the future. When there are other means such as crime insurance that make victims whole again, and @mannacurrency and @steembasicincome that has become a replacement for social security, the loss of these institutions will likely seem hollow in the long run.
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Interesting article. You talked about how politicians would like if there were just some things in the code that can’t be changed.
There is! - is called the Constitution. Its the code that's really difficult to change and politicians try to weasel around it.
But it comes back to bite them.
Obama's failure to get the Iran Deal approved by Congress as a Treaty (which is what the Constitution required) meant that the next President could kill the deal by Presidential fiat.
My view is that the First Amendment prevents the regulation of cryptocurrencies because they are pure free speech.
Sooner or later a Court is going to understand what blockchain actually is and rule the SEC and other regulators actions Unconstitutional.
I think you're a bit too optimistic here. The constitution has been changed constantly because the law regularly ignores it by writing their own rules and using "interpretation". Software is very different and executes exactly the same way it was designed and doesn't suffer from interpretation or weasel words.
With bitcoin, changing code requires between 80 - 95% agreement or there's a fork. That's a much higher bar than the constitution. A fork politically is called secession. When's the last time this has happened in the USA? It was attempted during the civil war. Bitcoin does this quite regularly in the last year.
Statists talk about secession as if it's a bad thing, but in reality, it's just another word for freedom and localization. Globalism is a term statists love because it's their ticket to a gravy train of parasitical profits.
What you are saying is that software is inflexible while law can be flexible to changing circumstances. There is good and bad in this. However, its not correct to say a Constitution is changed regularly. There hasn't been an actual Constitutional amendment in the US in my lifetime. https://en.wikipedia.org/wiki/List_of_amendments_to_the_United_States_Constitution
Ripple claims that even if their team is gone, coin would stand? Well, that is for sure the issue with current system, govts. would never accept decentralization and even then how can we be sure that in proof of stake these 21 votes would not be harassed or bought. You are right it still need decades and that too even if we want to actually implement this fair and open system.
I have no idea why that "Making difference" post is in the trending section instead of this. Awesome work man :)
Witness power is a lot more limited than senatorial or congressional power, so even if it happens your ability to opt out of any binding agreement you don't agree with is similar to changing the terms of a contract. A smart contract on some platforms cannot always run "stoppable code". Instead you have to set up a new contract that rectifies the conditions of the old one and opt in again if you agree to the terms.
EOS however is said to have the option to reverse transactions if enough witnesses vote for it. In Steem, there is something similar with account recovery. The reversal to a previous state is not always impossible on all blockchains.
Wow, thank you i didnt know that EOS and steem could possibly have a reversal. Well, for sure i think witness power is a lot more limited. Are you running for witness on steemit? i would like to vote you :)
You should understand that transaction reversals on these blockchains is far more difficult than what banks do. The earliest implementation of reversal required a fork (such as the one that created ETH and Ethereum classic). Dan has taken steps in EOS to formalize situations that might require a transaction reversal involving specific governance rules, but I'm not privy to the details yet.
Thanks but not interested in being a witness. I'm a programmer.
Yes, i could learn it before that it is far difficult. Even cancelling a transaction once it has been announced to hash is also kind of hard to do. So, it leaves less chances of mistake removal. That is great. I think you have a bright future as a programmer :)
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Awesome information,it will help us a lot.
I usually just scroll through and press the vote buton, but this was a good read. Thanks for not wasting my time!