So in my last post I went fully off the rails and was talking about how awesome communism is, and if you disagree you're a brainwashed uninformed sucker. I even gave an example of what my version of communism would be in a decentralized opt-in atmosphere. No one really called me out on it, so I'll take this opportunity to call myself out.
My personal example of crypto "communism".
- First, we need to centralize the geography. This becomes a potential attack vector in terms of the military industrial complex. There must be defenses in place to prevent an imperialist takeover of the system. Luckily, decentralized infrastructure is a natural defense to centralized takeover.
- At this point we have many people in our digital community located in the same geographical region. This has many advantages and disadvantages. The centralized attack vector must be leveraged into extreme efficiency gains to become justified.
- It's also important to have many members of the community outside this geographical region in case shit hits the fan. All members of the community (or perhaps all members of the community within the approved geographical location) benefit from "universal basic income". All members own the automated means of production. Any profits made via automation are distributed back to the members equally.
- To incentivize work-ethic, any products or services produced by non-automated means can be pocketed by the individuals that participated in this process. But the ultimate goal of this society would be to eventually automate these non-automated processes and then redistribute that value back out equally among community members. This frees up the work-force to move on to the other projects that haven't been automated yet.
This is swiss-cheese garbage and it's full of holes.
There's really no way to fully describe an entire system of governance with four bullet points. For example, how are community members chosen? That sounds like a permissioned system. You can't just let anyone on the internet join in and start earning passive income for free. We'd literally have to KYC every single person in the community and make sure to strike them off the list if they left. So what, then we have to track their every move? Wow, that is super authoritarian!
How does this fantasy government know which sectors of industry it should target for automation so it can distribute that value back to the community? Kinda seems like I just described a government without the actual governance part. This is just a basic-bitch two-part idea that could be used to distribute value equally across a commune. How do we reconcile all these inconsistencies?
It all comes back to DPOS.
Because you certainly don't want a democracy!
Someone tell this guy you're not allowed to say 'retarded' anymore!
It's offensive, guy!
Show some respect!
In any case.
Even if we did want a democracy, you can't achieve one-to-one voting in a digital environment due to Sybil attack and the lack of KYC within these digital permissionless governments. Therefore, once again it all comes back down to coin voting. Coin voting inevitably leads back to delegated proof of stake. Sorry, comrade! Better luck next time.
So while systems that resemble communism might pop up here or there, the underlying governance structure is always going to be coin voting or another abstracted version of provable on-chain reputation. For example, in the 'communist' system described above, perhaps all the real-estate within the specified geographical location was represented on chain as an NFT. Anyone who owned one of these NFT properties would get a cut of the communal income.
Of course this then leads to all sorts of problems like one person owning dozens of properties, and then renting out those properties to people who want to live in the city-state we built. Then the property owner would be collecting rent twice on dozens of properties and the system would be pretty busted.
It always comes down to Sybil attack: one person pretending to be multiple people. This is the one reason why we should always consider a permissioned system in certain situations if it can eliminate the Sybil attack vector and generate more value than it dilutes. This is usually a slippery slope though and it's best to come up with a system that doesn't require KYC to exist.
If KYC is necessary, we can create our own system that doesn't link itself to the legacy grid. For excample, think about how hard it would be for me to boot up a new Hive account and built up the same reputation that I have now on this one. I've been here four years. Creating a new account is simply not an option. We can capitalize on this in the future by creating custom reputation systems directly on-chain, but I guess that's a discussion for another time.
DPOS isn't as bad as it looks like on paper.
On paper, DPOS looks like it's just rich elite people in charge. How is that any different than our old system? As it turns out, DPOS is 100% superior to all legacy republics on every metric. The establishment has already meticulously figured out exactly how to manipulate one-to-one voting and present the illusion of 'democracy' to the public as if they have a choice. In reality, spending money on advertising (aka propaganda) and lobbyists is statistically proven to allow rich people to stay in charge regardless of one-to-one voting structures, and that assumes that the elections/bills themselves won't be hacked by the archaic systems and voting machines we are using.
DPOS completely cuts out the middle man and allows everyone to cast completely unhackable votes 24/7 anywhere around the globe. That alone makes it superior to legacy republic architecture. Not only that, every community member with a large stake has an extremely high financial incentive to bring more value to the community, because they will make more money by doing so. In addition, they enrich everyone in the community in the process, which gives the resources required to the lower level community members to step up and provide more value as well. It's a pretty awesome system that hasn't even reached 1% of its full potential.
As Justin Sun has already proven, aggressively bad actors can 'simply' be removed from the system entirely. By powering up stake and casting votes in a way that is obviously damaging to the community as a whole, this incurs extreme risk to those who hold non-liquid governance tokens (vests). Of course one would hope that we'd never have to do this again because it damages our reputation as a "censorship-resistant" platform.
It is simply not accurate to say that coin-voting leads to centralization, as Hive has already proven time and time again that this is not the case. For all the flaws that "proof of brain" has... it actually is working (surprisingly). I'm also living proof that crippling bear markets pose an extreme opportunity for true believers of the protocol that want to acquire as much stake as possible. Buying when there's blood in the streets has never been more profitable, from both an economical and political/reputational standpoint.
Conclusion
There is no such thing as a 'communist' consensus algorithm. We've got POW, POS, and DPOS, and if I'm being honest POS seems kind of irrelevant. DPOS is superior. I'm sure others will be invented (like proof of authority and the random other ones I've yet to study) but until then what we have is what we have.
So while distributions systems within crypto could resemble communism or socialism, the hard fact of the matter is that the underlying on-chain governance model is probably still going to be DPOS or some flavor of it, and that's fine. Like POW, DPOS isn't a 'good' option. It is only 'good enough' to not fail, given a healthy distribution of stake that is continually decentralizing. Hive is very far ahead of the game in this respect, and even with a token price of $1.50, this token is still extremely undervalued given the fundamental gains this community has made over the years.
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