Discussion about this post

User's avatar
Steve Parel's avatar

it's nice to see someone from Chicago finance interested in things of this sort. Read your blog while searching for another issue and found my way here. Really nice to see someone from that walk of life adopting "new tech." I'm a CS graduate student at Illinois Institute of Technology studying distributed and low latency computing myself, and its encouraging to see maybe all hope for tech innovation going forward isn't lost.

An interesting thing is, no one who is interested in fair and unbiased social media, especially of mainstream investors and political crowds, is looking into web3 and smart contracts to enforce content being within the parameters for a rule set. For example that posts are auto banned if they do indeed violate Brandenburg vs Ohio's imminent threat test, or violate another US statute else published to permanent storage as a valid transaction. This removes the ability for site owners or community members to remove posts, but it seems to be worth it to guarantee free and legitimate political competition.

The primary issue I see at the moment plaguing all of these defi and decentralized platforms are, is the governance is based on a cheap direct democracy where members put forth a proposal (suppose in defi application add an asset, or in the case of filecoin or arweave remove "unapproved" content) then the voting is based off people have votes proportional to how many coins they own.

The issue with this is, is that similar to direct democracy, you have no preservation of individual rights. As well, no guarantees on users ability to use the platforms as they initially intended because suddenly there is a swell of ideological voting from large stake holders of the platform. Imagine if someone tried to built some communication or records keeping applications using filecoin or arweave and it became popular and helped red america win. Suppose further that in the same way as big tech having a left wing bias, so do the majority stake holders(ownership of greater than 51% of tokens) now they use their voting powers to remove all the content that is at political odds with them.

It shows how early the entire space is, that a primitive form of governance as this is the standard model. I think time needs to be taken to explain to people the problem with the form of protocol governance, and the solution. The solution being some way to encapsulate rights and a written guaranteed constitution of how a protocol is to be governed via smart contracts and automated theorem proving.

The main issue with this is, it might be impossible due to various issues in theoretical computer science. In particular this problem is best posed as: Given a finite list of "rules", first make a representations of the rules with respect to some language(symbol set) and grammar(relationships between symbols) such that the rules are expressible in this language and grammar, second is to construct an algorithm that for a any occurrence in the same scope, it determines if that occurrence is or isn't in violation of the rules.

This should be the ideal mode of p2p/decentralized governance, but it doesn't appear to be the case the space is ready for this if they are still proposing direct democracy via coin holdings. There is also the possibility that it is indeed impossible, due to various issues regarding computation theory.

Food for thought.

Expand full comment
Jeffrey L Minch's avatar

Great insights, as usual.

There is no danger to the US having a digital dollar -- USD but in digital form for execution purposes, no bells or whistles -- but allowing the Treasury to decide what the programming is is treacherous.

JLM

www.themusingsofthebigredcar.com

Expand full comment
1 more comment...

No posts