Closing the Loop on Blockchain and Governance Course

Back in September I published what I thought was a tentative course schedule or outline for an independent study in Blockchain and Governance that I was asked to supervise. This course was definitely a "Build as you fly it" kind of thing, so the end product ended up not looking a whole lot like the starting product, but here it is in all of its glory. In all, I was pretty happy with the course; I think it lent a nice development of a multi-factor approach to governance in blockchain applications.

I think the key insight that came out of this course, is that governance isn't just on one tier of the platform, but all tiers of the platform and that governance decisions need to include the holistic, and complicated, interactions of multiple nodes. In short, and by way of example, Ethereum (or HyperLedger or Bitcoin or Ripple), isn't just the platform/protocol layer, but also consists of the application layer, and the "user" layer and each layer has some stake in the governance of the other layers. Any governance in any layer that doesn't account for that will fail. For example, see this Maersk article about their partnership with IBM on a HyperLedger-based shipping application that is struggling to find adoption. By locking down governance in the protocol and application layer, users are, unsurprisingly, saying they don't want to participate. And, indeed, without considering the implications of governance decision in other protocols, there is general reticence to adopt the technology more generally.

We can look at models of international governance through network modes of governance and how it integrates both the international organization theories of governance and even the governance theories of anarchy to show that the complex system of blockchains is much more than letting miners vote whether to fork or not.

2018 - Fall Semester 

  

Wk 1 Blockchain Basics 

Wk 2 Proof of Work 

Wk 3 Proof of Stake 

Wk 4 Hashgraph 

Hashgraph White Paper 

Wk 5 Ethereum Fork  

https://qz.com/730004/everything-you-need-to-know-about-the-ethereum-hard-fork/ 

SEC DAO Report (see Readings) 

https://www.etherchain.org/hardForks  

review forks 

why did the “unplanned forks” happen? 

what were the “planned” forks intended to resolve? 

Wk 6 Intro to Managing Decentralized Development 

Kogut & Metiu - Open-Source Software Development and Distributed Innovation (see Readings) 

Krahmann - National, Regional, and Global Governance (see Readings) 

Crane - From governance to Governance (see Readings) 

Wk 7 - Anarchy 

Oye - Explaining Cooperation Under Anarchy 

Axelrod and Keohane - Achieving Cooperation Under Anarchy 

Mercer - Anarchy and Identity 

Wk 8 - International Organizations 

Morrow – Modeling the Forms of International Cooperation 

Abbott – Why States Act Through Formal International Organizations 

Barnett – The Power, Politics, and Pathologies of International Organizations 

Wk 9 - Network Governance 

Provan and Kenis - Modes of Network Governance (see readings) 

Hafner-Burton, Kahler, and Montgomery – Network Analysis for International Relations 

Banczyk and Potts – City as Neural Platform: Towards a New Economics of Cities

Open Source Licenses as Blockchain Governance

Bitcoin Core is licensed under the MIT License - a permissive, non-copyleft, open source license. Ethereum is licensed under GPL v.3. IBM Hyperledger is closed source core, but its Fabric (smart contract development framework) and Composer (application development framework) products are licensed under Apache.

The choice of how to license the core of the blockchain is a governance decision and it has consequences for the future of these chains. For example, by failing to put any significant conditions on its license, just about anyone is free to fork Bitcoin Core for any purpose. For example, a joke coin designed as a satire for cryptocurrency itself, or a coin whose every transaction is truly anonymous and thus a facilitator for global terrorist transactions.

Clearly, and without judgment, Bitcoin Developers are OK with these forks. But we could imagine a universe where a blockchain developer were not OK with these applications. In such a way, one mechanism for avoiding undesirable forks would be to impose license conditions that prohibit the undesired activity. Provided that a fork followed the conditions (e.g., don't use this code to directly or indirectly aid terrorist activity - a condition that, for example, ZCash could not fulfill because it can't guarantee its compliance). Of course, post hoc compliance isn't exactly optimal; if (in our example) ZCash violated the license, then, Bitcoin may feel that its complicity in terrorist activity is complete despite the violation of the license.

On the other hand, Bitcoin could institute multiple governance methods to ensure compliance with its license. It could create a license approval process that every developer, user, node, or miner (or an approval panel) in the Bitcoin chain could vote whether to permit the fork or not. It could institute Digital Rights Management schemes that enforced license compliance. There are a universe of other mechanisms that could be instituted that wouldn't require taking the drastic step of making the code closed source.

I know a lot of these words are "bad words" to the crypto and blockchain purists, but I see them as tools of governance - of creating a platform/protocol for doing business and transacting on the web. Moreover, I've railed incessantly about "private blockchains" being stupid (they are). Adding licensing restrictions wouldn't close the chain's permissions, just the permissions for forking and further chain development; in other words, to paraphrase Hashgraph, it's a permissionless chain, but permissioned source code.

Decentralization, Technology, and the Realization of a New World Order? Or not.

Part 1 - What are we protecting anyway?

I think we need to assume that without rules or formalized order that systems tend toward chaos. Without this hypothesis, imposed order is unnecessary, right? If we think that without laws and rules that everyone will just peaceably get along, why do we need rules making murder illegal?

Maybe that's overly simplistic. Murder rarely happens even amongst animal species incapable of rule making because basic survival is a strong motivator for even unorganized groups to self-enforce basic concepts like "don't kill someone physically and/or emotionally near to others in our proximity." Still, we have examples of humanity, even in law-based systems, who through their own strength manage to murder large numbers of people who disagree with their worldview without immediate (or even proximate) consequence. Many (although it would be hubris to say all) have been brought to account before law-based tribunals. So, perhaps this itself is proof of the hypothesis. But, even for the sake of argument, let's assume that something so "fundamentally" (I know that's a loaded word) wrong as murder is self-executing.

But at what point do these self-enforcing mechanisms break down? Other basic needs, such as food and shelter, do not seem to be so "fundamental." Theft is relatively easy to justify based on perceived need (self-interest). Destruction is easy to justify based simply on revenge or relative worth. Even these simple transgressions require enforcement of the underlying concept of "exclusive ownership" (whether by the individual or by the community isn't particularly relevant at this point)^[1]. Let alone more complicated concepts that are fundamental to modern governance such as antitrust, freedom of speech, and environmental protection.

It is easy to simply point at today's somewhat universal system of law and order and say that we've proved the point. The fact that every group of humans have created laws and enforcement mechanisms is proof that such a system is de facto better than a system without laws and enforcement. To my knowledge there is no large group of people that operate under a functional anarchy.

To date, it seems that centralized rule and order (nations) have organized, roughly, along geographical borders. For most of human history this seems pretty obvious. Yet it seems increasingly obvious, that geography may not be the best control mechanism for groups of people to be organized and interact with each other.

So, one of the central questions that this series of posts will ask is this: if we could get rid of the current geography-based systems and, using modern technologies, re-align ourselves, what would that look like? Would we still engage in dispersed centralized behavior (i.e., we would still be centralized, but not around geography)? Or is "true" decentralization (in essence, anarchy; each individual acting, for all intents and purposes in their individual interest) possible in a modern techno-utopia or desirable?



^[1] It might interesting to look at societies that managed to survive for long periods that had "political" systems that did not have an underlying belief in "exclusive ownership." Even a system like communism believes that resources are "owned" by "the people" such that taking a "community" item for "personal use" would be transgressive. Without more research, it seems that a more apt candidate might be some Native American systems that view some types of property (such as land) as "unownable."