All revolutions have their dogmas, and the cryptocurrency/blockchain insurgency is no different. It’s an article of faith among crypto adherents that
All revolutions have their dogmas, and the cryptocurrency/blockchain insurgency is no different. It’s an article of faith among crypto adherents that decentralization will solve many of society’s ills, including the problem of governance.
Vili Lehdonvirta — an Oxford University social scientist, book author, and former software developer — disagrees.
“The underlying technology will change and it’s already changing,” he told Cointelegraph last week. “It’s becoming less blockchain-like, less like the original idea of a trustless system,” especially after the Ethereum Merge, where corporate-like ‘staking’ entities will be needed to “uphold the integrity of the chain,” in his view.
Indeed, crypto networks generally could be moving in the direction of centralized digital platforms, “maintained by a bunch of people whom you have to trust, but hopefully you can also hold to account if they turn out to be untrustworthy.”
Lehdonvirta’s new book, Cloud Empires, published by MIT Press, is in part a meditation on the perishability of ideology and/or good intentions. Its subjects are the 21st century’s massive digital platforms like Amazon, Uber and eBay, among others.
Many follow a similar life cycle: Charismatic founders who set out to change the world, guide their enterprises on a dazzling growth path but then crash against a hard wall of reality. They survive this collision, but not always for the better.
Subtitled “How digital platforms are overtaking the State and how we can regain control,” the book has an illuminating chapter on Satoshi Nakamoto and the blockchain technology he created: Its origins, adoption, metamorphosis and ultimate realization that cryptographically secured digital networks couldn’t entirely replace “untrustworthy” human authorities on matters of governance.
There’s Amazon founder Jeff Bezos, “once hailed as a hero who created an ideal business environment for countless independent merchants,” but who eventually transforms into a digital monopolist, turning on merchants, indeed, “extracting extortionate fees and outright stealing lucrative business lines from them.”
Appearing, too, is Uber co-founder Travis Kalanick, initially as a “fierce advocate of free-market solutions,” but he’s later seen fixing fares and regulating the number of cars on the streets. There’s Pierre Omidyar, creator of “the world’s first online reputation system,” who realizes in time that a “bad rep” alone won’t deter malefactors. His enterprise, eBay, evolves “into a central authority that formally regulates its marketplace.”
A social order without institutions
As for Satoshi, blockchain’s elusive pseudonymous founder known to the world principally through a nine-page white paper, “Bitcoin: A Peer-to-Peer Electronic Cash System,” published in 2008. “Nakamoto was bothered by how people still had to rely on powerful and opaque financial institutions to manage their finances,” writes Lehdonvirta, a professor of economic sociology and digital social research at the Oxford Internet Institute at the University of Oxford.
He positions Nakamoto in a line of Digital Age libertarians, beginning with John Barlow, the cyberlibertarian “who dreamed of a virtual society in which order emerged independently of the authority of territorial states.” Nakamoto here is viewed through a political scientist’s lens. Lehdonvirta writes:
“Nakamoto was not interested in making the institutions more democratic. Instead, he wanted to resuscitate the Barlowian dream of a digital social order that wouldn’t need such institutions in the first place — no bureaucrats, no politicians who inevitably betrayed their electorates’ trust, no elections rigged by corporations, no corporate overlords. Nakamoto still thought that such a social order could be created with technology — and in particular, with cryptographic technology.”
Satoshi wasn’t the first to seek “political liberation” through cryptography. A subculture of “cypherpunks” and “crypto-anarchists” had been propounding that creed for decades, “But after years of work, they still had not succeeded in building viable payment platforms.”
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Yet, Satoshi appears to succeed where others failed — at first, anyway. What did he do differently? The short answer: He rotated record-keepers.
This revelation may seem underwhelming, especially as crypto miners have been vilified in recent years as would-be monopolists and eco-sinners. But, in Lehdonvirta’s telling, Bitcoin’s miners are really just network administrators, i.e., “record-keepers.” Their job, as originally conceived, was:
“To go through recently issued payment instructions, check that they were valid, and collate them into a record known as a block — an official record of transactions that could be used to determine who owned what in the…
cointelegraph.com