Blockchain Ethics

[class 6 readings] Blockchain governance vs US governance

My class project will be on crypto/blockchain voting in the context of the U.S. presidential election. I will use this post to compare ideas from our readings about voting and how governance power is balanced between the blockchains discussed and the U.S. governance system.

The U.S. governance system is divided into 3 branches: The executive (president), judiciary (courts), legislature (senate + house of representatives). And then there are voters! I disagreed with the analogies made by the author of “Blockchain Governance: Programming Our Future” between the branches of power in the Bitcoin vs U.S. systems. For example, the author compares bitcoin nodes to the executive branch, but the executive branch is led by one executive - one person holds ultimate decision making power - whereas nodes may make separate decisions and their decisions bring outcomes through more nuanced mechanisms.

(image from “Blockchain Governance: Programming Our Future”)

An interesting point the author made that brings me to a different comparison is about incentive alignment. (Bitcoin) blockchain developers have a lot of potential power to implement changes, but inadequate financial incentives. Large miners could bribe or hire developers to develop node software in their favor. This could be analogous to how lobbyists financially support government officials, who have the power to implement changes, to make changes in their favor. In both cases where these incentives align between the briber and the bribed, the overall community and network is negatively impacted.

Now to compare voting in blockchain vs U.S. systems by drawing from Vitalik’s “Notes on Blockchain Governance” post.

Vitalik frames voting as serving the purposes of decision making and coordination, and then describes his framework of “layer 1” or “tightly coupled” voting, versus “layer 2” or “loosely coupled” voting. “Tightly coupled” voting enacts more direct change decisions, whereas “loosely coupled” voting enables changes by coordination. Then the question is: Which types of changes in blockchain or U.S. systems should be reached by tightly coupled versus loosely coupled voting?

When considering blockchain governance, Vitalik argues that decisions regarding norms best exist on layer 2 (loosely coupled) while protocols are layer 1. We could see the U.S. governance system as already functioning in this way. Basic operations such as how eligible voters elect a president every 4 years, or how the number of representatives is allotted to each state are defined as protocols in the U.S. constitution, and are rarely updated (e.g. with amendments). Yet how these protocols are used changes over the years as society’s norms change (e.g. courts interpret laws differently as society progresses, or more progressive representatives are elected by the populace). We could then say that norms do drive “level 2” governance in the U.S. system.

Vitalik points out problems for on-chain voting that are important to consider for the U.S. governance system as well.

“it is not at all clear that voting will be able to deliver results that are actually decentralized, if voters are not technically knowledgeable and simply defer to a single dominant tribe of experts.”

In the U.S. system, constituents vote for representatives and government officials to have the job of voting on their behalves. These elected officials are supposed to have the “technical” knowledge, in order to make good decisions and represent the constituents’ best interests. Yet there are still issues where self-proclaimed loud experts and interest groups can have an oversized impact on what information is disseminated and impacts the decisions made.

Other problems with (on-chain) voting that Vitalik points out are low voter turnout (<5% on-chain), unequal wealth distribution, and “a large flaw: in any vote, the probability that any given voter will have an impact on the result is tiny, and so the personal incentive that each voter has to vote correctly is almost insignificant… Hence, a relatively small bribe spread out across the participants may suffice to sway their decision, possibly in a way that they collectively might quite disapprove of.”

The U.S. presidential election also suffers from low turnout (<62%) and voters feeling apathetic that their one vote can have an impact. However, our process for U.S. voting privacy was designed to avoid bribes. If voters cannot prove to potential bribers that they voted the way they were paid to vote, then elections are less susceptible to purchase. The importance of private votes are a central reason that experts are concerned about internet voting. This may be one of the important reasons on-chain and U.S. voting systems must stay separate.

What do others think about these comparisons between on-chain and U.S. voting systems? Are there any more parallels to add, or things I got wrong?

(Unrelated) PS: I was fascinated by the Bitcoin dev who wrote the “Who Controls Bitcoin Core?”. He took measures to live in secrecy “off the grid” ever since his life was threatened due to his relationship with Bitcoin. (https://www.nytimes.com/2019/03/12/technology/how-to-disappear-surveillance-state.html)