GL: You’ve written a lot about governance and I’m interested in the potential use of blockchains for governments and societies. What is the potential of using decentralized systems like Ethereum for making decisions on social issues, and not necessarily crypto-related issues?
I think blockchains can be a good technical infrastructure for running many of these base layer mechanisms. They are good for currency. They are good for things like domain name systems. And I think that at least the formal ingredients of a governance system can often make sense to put in part on a blockchain. Although I would like to make some caveats, because governance is also the communication and everything that goes around a system, and most of it will happen on platforms that are out [block]chain.
Blockchains for things like voting are an interesting example. There is a lot of talk about blockchains that offer censorship resistance, for example. And the expression “resist censorship” makes a lot of people think, you know, I want to smoke weed and don’t have to ask the government, but people forget that voting requires censorship resistance. If the government can censor your right to vote, that means the entire democracy will just stop working. It’s important for voting systems to have this really strong quality, that if you want to vote, you should be able to, and you have to be really sure that your vote actually went where it could be counted. That’s something I think blockchains, combined with some other types of cryptography that add things like privacy, can deliver well.
LG: You write in one of your essays in the book that traditionally incompetent people in governance have a way of navigating their way into accountability and leadership roles. Does the blockchain prevent that?
Yes, good question. This is one of the reasons why privacy technology is important to me. I talk about zero-knowledge proofs over and over because I really believe in the importance of privacy, not only to help protect people from bad social structures, but also because it’s a necessary ingredient to enable all kinds of social structures.
The corruption in voting and people’s ability to buy their way to power is one of those cases where privacy is a very important ingredient. Because if everything is transparent, everything you do is in principle subject to the incentives of others.
GL: How should crypto be regulated?
mmm. [long pause] I think it depends on what aspect of crypto is regulated. So there’s the crypto base layer and then there’s the application layer on top. For the base layer, we make every effort to avoid being subject to regulation, especially in a particular country. It is critical to the credibility of a platform in any other country that one country does not have too much power over it.
But once you get to the application layer, there are applications in different industries. And the specific things that people do with blockchains are things that are probably already regulated. It is much more difficult to argue publicly that they should be completely free of any form of regulation.
