Global digital platforms are conquering the world and rely critically on digital infrastructures to function, yet little research has explored the fundamental interrelationship between the two. This working paper argues that understanding centralization and decentralization in digital networks as asymmetry and symmetry in mutual interdependencies between the constitutive elements of a digital network can help us understand the platform-infrastructure relationship more fundamentally (and vice versa). To this end, the paper proposes, as a starting point, the in-depth analytical and literature study of blockchain networks as a particularly revealing type of digital platform/infrastructure duality. The paper proposes an analytical model for characterizing de/centralization in digital networks and maps this onto blockchain networks. Based on this, the paper explores the de/centralization of blockchain, arguing that the extant blockchain literature largely has failed in providing a comprehensive understanding of de/centralization by not considering the complex second-order interdependencies between the different constitutive dimensions of a blockchain: the symbolic, technological and political dimension. Based on this, the paper provides an analysis of the meaning of de/centralization in blockchain networks by studying the interdependencies between its constitutive elements of coin, network technology, and social community.
- Earning interest on crypto asset holdings has become easier than ever, thanks to the Compound protocol and DApps like Dharma and Celsius.
- Converting your ETH to other Ethereum tokens can be done securely and privately decentralized exchanges such as Uniswap or IDEX.
- Hedging your cryptographic asset portfolio is now possible thanks to decentralized derivatives trading platforms, such as dYdX.
- Insuring yourself against the failure of smart contracts has become possible thanks to Nexus Mutual.
- Betting on the outcome of elections, sporting events or whether John McAfee’s bitcoin price prediction will come true can be done on prediction markets platforms, such as Augur.
- Storing funds in crypto-backed stablecoins during times of extreme market volatility is now as easy as buying DAI.
What is a DAO? Here, we take as an (imperfect) definition something simple: “a censorship-resistant means to coordinate the deployment of shared resources towards a shared objective”. The simplest DAO, by this definition, would be a multi-sig wallet, in which individual members can withdraw paltry sums and many members together can withdraw significant sums.While a multi-sig may be sufficient for a group of friends on a backpacking trip, it quickly becomes apparent that for more ambitious objectives requiring the coordination of more resources, additional mechanisms are necessary. How permeable should the boundaries of the organization be? How much influence should any individual have? How can individuals be protected from the bad behavior of others? How easy or difficult is it to participate?For a certain type of person, these questions are irresistible, and it no surprise that many significant projects have emerged in recent years seeking to answer these questions. People frequently ask about the ways in which these projects are similar and different from each other; this essay is a step towards an answer.This commentary is based on my familiarity with these projects and their technical documentation, much of which I have read, as well as conversations with teammates from the various projects.
Source: Aragon, DAOstack, Colony, Moloch
At TILTing 2019 the Lab presented a study on the legal instruments that are, as of today, applicable to blockchain-based digital assets under European law, and the relative enforcement challenges. The broader question to be tackled is whether and how regulators deal with such challenges, and what are the interests at stake. http://ipkitten.blogspot.com/2019/05/tilting-perspectives-2019-report-2.html
Generally, unintended consequences of laws, discouraging entire categories of activity when one wanted to only surgically forbid a few specific things, are considered to be a bad thing. Here though, I would argue that the forced shift in developers’ mindsets, from “I want to control more things just in case” to “I want to control fewer things just in case”, also has many positive consequences. Voluntarily giving up control, and voluntarily taking steps to deprive oneself of the ability to do mischief, does not come naturally to many people, and while ideologically-driven decentralization-maximizing projects exist today, it’s not at all obvious at first glance that such services will continue to dominate as the industry mainstreams. What this trend in regulation does, however, is that it gives a big nudge in favor of those applications that are willing to take the centralization-minimizing, user-sovereignty-maximizing “can’t be evil” route.Hence, even though these regulatory changes are arguably not pro-freedom, at least if one is concerned with the freedom of application developers, and the transformation of the internet into a subject of political focus is bound to have many negative knock-on effects, the particular trend of control becoming a liability is in a strange way even more pro-cypherpunk (even if not intentionally!) than policies of maximizing total freedom for application developers would have been. Though the present-day regulatory landscape is very far from an optimal one from the point of view of almost anyone’s preferences, it has unintentionally dealt the movement for minimizing unneeded centralization and maximizing users’ control of their own assets, private keys and data a surprisingly strong hand to execute on its vision. And it would be highly beneficial to the movement to take advantage of it.
Source: Control as Liability
These days, it’s not a shared drill that’s redefining trust and supplanting institutional intermediaries; it’s the blockchain. Botsman now says that the blockchain is the next step in shifting trust from institutions to strangers. “Even though most people barely know what the blockchain is, a decade or so from now, it will be like the internet,” she writes. “We’ll wonder how society ever functioned without it.”
The ambitious promises all sound very familiar.
If Facebook’s pivot from town square to private living room wasn’t laden with enough irony, here’s a new twist: Big business, it appears, has been invited to join us by the fireplace.
Gregory Barber covers cryptocurrency, blockchain, and artificial intelligence for WIRED.
On Thursday, The Wall Street Journal reported new potential details about Facebook’s long-awaited cryptocurrency plans. The company is reportedly seeking dozens of business partners, including online merchants and financial firms, in an effort to extend the reach of its blockchain-based marketplace. Facebook’s would-be partners are being asked to pitch into an investment fund, valued at $1 billion or more, that would serve as backing for Facebook’s coin and mitigate the wild speculative swings that make cryptocurrencies like bitcoin hard to spend. The pitch, according to the Journal, involves offering merchants lower fees than credit cards.
Some were quick to note that this would reduce Facebook’s ability to make money from payments in the short term. But that may not matter much—if, in the end, Facebook’s crypto effort is really all about getting you to spend more time glued to Facebook.
Facebook appears to be already building out the plumbing to make its marketplace a reality. At its F8 developer conference this week, the word “blockchain” was notably absent. But even as Zuckerberg emphasized the company’s plan to reorganize your Facebook experience around intimate relationships, his update included plenty of ways money would be involved. “I believe that it should be as easy to send money to someone as it is to send a photo,” he said, alluding to “simple and secure payments” as a core feature of his privacy-forward vision. That apparently extends beyond the peer-to-peer payments available on Venmo and Facebook’s own Messenger app. In a series of keynotes, Facebook execs touted a litany of commerce-focused improvements: better checkout for Instagram’s digital mall, donation stickers, and a new tool for small business owners to list items on WhatsApp.
Indeed, WhatsApp appears to sit at the center of Facebook’s commerce efforts—at least to start. At F8, Facebook said WhatsApp Pay, currently on limited trial in India, would expand to additional, unnamed countries later this year. The platform isn’t blockchain-based (for now) and is designed for peer-to-peer payments. But with 80 percent of small businesses in India using WhatsApp to market their goods, some form of payments processing is a natural evolution. In December, Bloomberg reported that the first tests of the crypto coin may occur in India, initially as a way for workers to send money home from overseas.
An added twist from the Journal’s report is the possibility that the coin will be integrated into Facebook’s lucrative ads ecosystem. The scheme, reportedly still under debate within Facebook, would potentially work on both sides of the ads equation: Merchants could use the coins to pay for ads, and users would be rewarded in coins for viewing or interacting with them. That reflects a growing perception—seen recently in efforts like the Brave browser, which compensates users through a token for clicking on ads—that people should get paid for their attention, not simply help internet giants make money. For Facebook, it also presents a vision of how its ads and eyeballs-driven business could continue in the company’s supposedly privacy-first era. The idea is to keep Facebook’s coins—and therefore users—tightly enmeshed in the platform.
The WIRED Guide to the Blockchain
“I don’t believe they’re doing anything that isn’t in the service of increasing interactions on their platforms,” says Joshua Gans, a professor at the University of Toronto. Sending money to businesses presents a challenge, he notes. Compared with friends and family, businesses are more likely to dump their Facebook coins at the end of the month in favor of real money. Gans is skeptical that Facebook would pay users for viewing ads—an immensely tricky system to create—unless it involved something like a rebate for buying a product through a Facebook advertisement. On the merchant side, encouraging businesses to pay for ads and services on Facebook with the coin could be one way of staunching the flow of money out of the system.
As the Journal notes, Facebook’s foray into blockchain could look a bit like a loyalty-points system—tokens that can be earned through and spent on Facebook services, or cashed out elsewhere though partner merchants. That’s not without precedent among technology companies: Uber, for example, has Uber Cash, which rewards users for purchases both in and out of Uber with app-specific money. Gans notes offerings like the Apple Card hold a similar purpose: It’s a service that, for all the talk of disrupting the credit card industry, is mostly a shiny, heavy way to buy more of Apple’s apps and products.
A Facebook spokesperson reiterated an earlier comment: “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications.”
Facebook still faces many challenges, from sorting out how it will oversee the system to assuaging the privacy concerns of users to determining how to funnel money in and out of its currency—a process that, for other cryptocurrencies, is typically handled by exchanges. It also has to contend with the realities of the global economic system, which runs on euros and yen as well as dollars. Even if it backs the currency with a basket of currencies, as reported, it “can’t be stable with every currency in the world,” says Gans. “That’s not how the world works.” Hence the need to enlist financial partners to smooth transactions in and out of Facebook’s system.
Bottom line: It’s very unclear how this will work in practice. “There are a lot of moving parts. Facebook doesn’t always do what we expect,” says Gans.
This chapter addresses the myth of decentralized governance of public blockchains, arguing that certain people who create, operate, or reshape them function much like fiduciaries of those who rely on these powerful data structures. Explicating the crucial functions that leading software developers perform, the chapter compares the role to Tamar Frankel’s conception of a fiduciary, and finds much in common, as users of these technologies place extreme trust in the leading developers to be both competent and loyal (ie, to be free of conflicts of interest). The chapter then frames the cost-benefit analysis necessary to evaluate whether, on balance, it is a good idea to treat these parties as fiduciaries, and outlines key questions needed to flesh out the fiduciary categorization. For example, which software developers are influential enough to resemble fiduciaries? Are all users of a blockchain ‘entrustors’ of the fiduciaries who operate the blockchain, or only a subset of those who rely on the blockchain? Finally, the chapter concludes with reflections on the broader implications of treating software developers as fiduciaries, given the existing accountability paradigm that largely shields software developers from liability for the code they create.
Keywords: Blockchain, DLT, Bitcoin, Ethereum, Distributed Ledger Technology, Cryptocurrency, Digital Currency, Blockchain Technology, Governance, Fiduciary, Law