Hive: Plutocracy or Democracy?

Many would say we already live in a plutocracy.

Anyone who believes in the deep-state believes that it is the billionaires that already control the world. Rule by the wealthy, indeed. Actually, if you dig deep on a lot of those conspiracy theories you'll actually find that what they really think, but don't often talk about, is that it's "The Jews" that control everything.

The Goyim Know, shut it down.

I was actually supposed to do a meta-post on conspiracy theory, and I found this badass chart that made me laugh. So good.

https://www.conspiracychart.com/

The anti-Semitic point of no return.

I love that. Very true-ish.

But let's assume that we just think it's rich people and not a certain class of rich people.

So in my last post I called Hive a Plutocracy, but it is really so much more than that. There are multiple themes of governance on Hive, and I figured I needed to explore them further in a new post.

For example: Hive is a democracy.

Anyone with powered up Hive can vote on witnesses and how to allocate the dev fund. And that's only the beginning. Anyone can program any kind of voting structure they want on Hive. We could do one-to-one voting; nothing is stopping us from doing that. The problem with one-to-one voting is the implied KYC and the fact that one-to-one voting isn't that great because we'd be giving people votes who aren't making informed decisions. Still, we could do it. Pretty easily.

But privacy though.

This is another big problem with voting. Voting is supposed to be private, because public voting can lead to coercion and other forms of corruption. This is why voting with our money is such a good idea. Money can be shuffled around. Money is private. Anyone can boot up an anonymous account on Hive, pump a bunch of money into it, and vote on whatever they want without being called out. It is known.

On a game-theory level it sounds like A REALLY REALLY REALLY bad idea to create a governance structure that revolves around rich people controlling everything. How is that a good system? I would argue that, like all things crypto, it is not a good system; it only has to be good enough.

So if we already believe that billionaires control the world today, how is Hive plutocracy better than that? A lot of it has to do with cutting out the middle man. How many billions of dollars get pumped into manipulating public opinion and hacking one-to-one "democracy"? The allocation of all those resources is a complete waste of money. Hive easily avoids this problem by allowing people to vote directly with stake in the network.

This also has other huge benefits, such as:

• Voting becomes unhackable and enforced by encryption.
  • There are no voting machines to hack.
• Voting is something that can be done for any topic 24/7 worldwide.
  • We are not constrained by borders or time limitations.
• It is unlikely that a big stake holder would vote against their own self interest.
  • Unless you're an idiot billionaire who thinks you can buy a community.
    • Thanks for the free money.

Also, who controls the money?

Billionaires might control the world, but who controls the billionaires? There are so many things to unpack here. First of all billionaires aren't even billionaires, are they? We calculate a billionaire's wealth by using the market cap of all their assets added up in USD form and assuming liquidity is infinite (it is not). They don't actually control a billion dollars (because holding fiat is stupid). Rather they control stocks, bonds, real-estate, commodities, and other non-fungible assets (aka property).

So who is in control? No one is in control. It's a free-for-all bloodbath out there. Those who delve into these games of power rather than just simplifying it into oblivion and saying things like "printer go brrrr" and "the Jews control everything" will find that the world is a bit more complicated than that. So complicated in fact that we see exactly why so many people need to dumb it down into something more easily digestible.

Even the FED, the most powerful central bank in the world, doesn't actually print money like people think they do. The FED doesn't control USD, and in this regard USD is a decentralized system (not a very good one, but still).

So how can "billionaires" control the world if they don't control the money that their wealth is measured in? How they can they control the government if the government can barely control itself or the underlying population? The answers to these questions belong in a full length novel, not a blog post. It is not so simple as "rich people can just do whatever they want". That is a gross oversimplification that has no merit in reality.

So who controls the money on Hive?

Everyone does, and no one does. This is another thing that really muddies the waters when it comes to trying to classify Hive's DPOS governance structure. Hive is a central bank, but then that central banks turns around and delegates power to every single community member that powers up Hive. How weird is that?

If Hive is a Plutocracy then surely the witnesses must control everything, right? Wrong again. Many people look at Hive's governance structure on a game-theory level and say,

"Look at this garbage, these 20 people can get together and freeze or steal anyone's money; this is not decentralized."

In theory this is true; in practice is it not.

If we look back to actual events like the Steem hostile takeover, we see that it is nearly impossible for our witnesses to freeze accounts or steal funds. Only in the most dire of cases where the network was under imminent and mortal danger was this allowed to occur, and even then people were pissed and voicing their uninformed opinion on that matter.

Idealism in crypto runs deep, and narrative/politics matter. The layer zero of Hive will not allow the witnesses to, "Do whatever they want." It doesn't matter that they can do what ever they want on paper. The theory is not reality, and we've seen that proven in the field.

Speaking of practice.

What do we see on Bitcoin? A handful of mining pools that, once again, everyone delegates their hashpower to. Again DPOS automates out this natural centralization of power and leans into it rather than trying to be idealist about everything. DPOS is a real solution that solves real problems, not some idealist wet-dream utopia that will never materialize.

To recap, Hive is:

• A plutocracy; rule by the wealthy.
• A direct democracy, everyone gets a vote.
• A republic in which we elect our representatives.
• A central bank that delegates power back to all citizens.
• A socialist digital nation that allocates subsidies with the dev fund.
• A communist nation that distributes the means of production back to the people.
• A permissionless protocol that anyone can build on (anarchy).

Hm, yeah... so Hive is like... all things.

Pretty weird, eh? Such is the nature of flat-architecture. We are testing every door, and spilling into every direction. Like ya do.

Circle voting leads to centralization.

This is another false narrative that many opponents of DPOS subscribe to. We saw this one a lot in 2018 when whales were making a lot of money and the price just kept bleeding again and again. Someone needs to be blamed for this! We certainly aren't going to blame ourselves!

On a mathematical level, this theory is objectively false.

It has often been said that the rich on Hive just upvotes themselves, and thus this leads to centralization. Make it make sense, because this is nonsense. If I have 1M Hive powered up and I upvote myself for $100, and then someone else has 1000 Hive powered up and they upvote themselves for 10 cents, has centralization occurred?

Those who are delusional and jealous of other people's stacks claim yes, but both parties still own exactly the same percentage of the network as they did before voting. Again, this is why democracy is idiotic: Because the mob believes idiotic things and then they act on those idiotic beliefs. Math doesn't lie. People do. We aren't going to make any progress by acting on irrational emotions that aren't grounded in reality.

Spoiler alert!

I'm one of the highest rewarded authors on Hive (#blessed). Go look at who votes for me. It's not even possible for this to be a "circle jerk" situation because my biggest upvotes come from accounts that don't even write blog posts. Again, make it make sense.

Also, it took me a full year of blogging before I had any kind of support whatsoever (two years for full support). That's just how blogging works. People want to jump in on the scene and instantly start making a living wage without crawling through any of the muck it takes to get there? Please. I mean I'm all for providing real jobs with non-subjective wages based on merit, but we just aren't there yet. All in good time.

Thus, anytime someone with a lot of stake upvotes someone with not as much stake, decentralization occurs on Hive, without fail. Does this happen? Yes, we can see that it happens all the time all day every day. Hive is becoming more and more decentralized over time. Even more importantly, the accounts scooping up massive amounts of Hive are non-toxic good-actors, which is even more important than decentralization.

What really matters is trust; we need more money in the hands of trustworthy people; doesn't matter if the distribution is centralized if we have trust (the theory behind decentralization is simply that it is statistically more trustworthy than not). This is very important, because wealth distribution is obviously Hive's biggest attack vector (if the hostile takeover didn't give that away).

Hive is so far ahead of most networks in terms of token distribution, and while the whole "proof-of-brain" fantasy is not perfect and a very ugly way of doing things, it actually is working better than what every other network is doing (surprisingly). Give yourselves a pat on the back, fam. We're doing it. Progress is slow, but progress is progress.

Conclusion

Hive employs many forms of governance and cannot be classified by traditional means. Ironically, the best part about Hive governance is the anarchy aspect. Anyone can build anything here, and the network will not say no or play favorites. Pay the 'fee', have your data stored for all time. It's that simple. Anarchists unite!

Return from Hive: Plutocracy or Democracy? to edicted's Web3 Blog