BarbedWireChain

When I think about the unforgiving nature of optimism that resides in the minds of the young and the brave I feel sadness. As we all know there are three major processes that define social interactions between the representatives of the same species: Survival, Reproduction and Struggle for Power. Some scientist suggest that struggle to reach and maintain power is just a part of survival, but the higher one sits the more vulnerable he becomes to the predators that encircle his throne. Struggle for power defines who we are in our everyday lives.

After Augustus became the first emperor of the Roman Empire it took Europe more than 1800 years to bring back republican ideas to the political spectrum (Venice, Florence, Genoa etc. were very close). We were engaged in civil wars, revolutions, fighting absolute monarchy, we tore down religious institutions that were using “the word of God” to accumulate money and power. The majority of people living in Europe and the US tend to think that everything that has happened is just a part of the ongoing liberation process, but as Bruce Bueno de Mesquita and Alistair Smith stated in their bestseller The Dictators Handbook “Crowd is also a key to power… lured by the ideals of new beginnings the young are being used as a weapon for the new elite to overpower the old and when the dust settles after the fight only a few are rewarded with new opportunities” and as a Historian and the one who has B.D. in International Relations I can’t agree more.

What is the easiest way to rally people behind yourself in the western world? Declare a war against oppression. Earlier in history it was much easier than today. Those in the bottom of the food chain who wanted more power could convince others to unite and try to oppose the old regime. Today politicians tend to do the same way, that is why with every new generation laws become more and more liberal.

But that is a theme for an another article. Here I want to describe how blockchain can be used as an instrument of unprecedented struggle for power and oppression.

Blockchain — big brothers best friend

Now we have Blockchain. I’ve been engaged in the community for 2 years now, founded a successful investment fund and all I’ve heard is that how the decentralized ledger tech (DLT) is going to “liberate people”, that “we are going to give power back to the crowd”, “that governments and banks are shivering because they are afraid of what is about to come”. Don’t be naive. They are not. Because in their eyes Blockchain is the ultimate tool of oppression and domination.

“What are you talking about, truth_seeker?! We control our own money! We have no intermediaries that can freeze our bank accounts, no regulators!”

Yes, you do control your money. But your 100$ on a coinbase wallet doesn’t concern anyone. What’s really important is billions of dollars that are being held in different hedge-funds across the globe under the 24/7 radar of different regulators. In the western countries you must pay taxes or you will be fined heavily or even sent to jail, if they catch you evading. The other parts of the world are mostly totalitarian so the concept of financial liberty for the citizens of Russia, China and even India is very vague. Governments will definitely change the law to satisfy your liberal views, but as it always has happened in history those laws will be twisted with lies and intricacy to be used against you if necessary.

“But what about the Zero Knowledge Proof? What about all other private protocols? They won’t even know whether there was a transaction at all!”

Even if we only consider developed countries, do you really think that the majority of the population is going to master IT enough to use those protocols? People don’t care about their privacy. Terabytes of information flow into the internet every second just because somebody wants to share their location, show what they had for breakfast or demonstrate their open-mindness and intellectual level by posting articles about “ The Hunger Games”. What will people choose? A difficult step into the unknown where you have to handle security yourself or literally a one-click UX solution under the protection of banks, governments and armies?

“Bitcoin can be the store of value for the new internet. If BTC won’t make it, then we have other candidates like ETH, LTC or DOGE to take its place!”

It might one day become the store of value but BTC is a centralized entity. 60% of all coins are stored on less than 8% of wallets . I won’t talk about hashing power because it is even more centralized. Those who wield the 60% control the price as they see fit and if you think that they don’t know each other and it is a free market then you should probably check out the meaning of the word “oligopoly”. Governmental agents and biggest funds have been involved in crypto from the very start.

DAO vs CAI

The most influential people in the cryptosphere are discussing the future impact of DAO. But think about governmental structures and currencies. Do you really think they are going away?

Let’s imagine that it is 2028. Every single currency is virtual. Cash is non-existent and there is no way for you to transact money without involving one or another DLT. The system records and stores every single transaction onto the governmental ledger. Your wallets are not anonymous or even pseudonymous they are bound to your passport and the only currency you can legally use to buy goods and services and pay taxes is the national one. Transparency is absolute so any regulator at any time can check on your expenses and if they notice something suspicious they are going to ask a lot of questions.

Now this scenario seems ridiculous if we think about developed countries, but this seems pretty realistic for China, considering the communist party’s willingness to eternally support Xi Jinping and the rumors about the system that is going to rank every single citizen for their accomplishments and failures before the state. What about Russia? There is a thriving community that has grown exponentially in the past two years, but as everything has fallen under the Putin’s iron fist, will crypto fall too?

What I am trying to say is that the world mostly consists of totalitarian states. Due to many different historical, economic and political reasons they are not willing to delegate more power to their citizens and they don’t want to fall behind in technological advancement. So as always they are going to take the tech, bend it to their will and use it to their own advantage, oppressing everyone and everything that stands in their way.

Instead of DAO we get CAI — Centralized Autonomous Institution, hierarchical, transparent and regulated.

DAO capitalism

Lets forget about the totalitarian countries of the east and focus on developed countries. There is an enormous problem with DAOs that are being created at this very moment. They are very capitalistic. With money you can do whatever you like. In POW systems you can buy a lot of hashing power and instantly become a major influencer on the market. In POS and dPOS you can install nodes and even try the 51% attack. Money defines the power of voice and in my opinion that is utterly undemocratic.

Even democratic social systems tend to become oligopolistic. Major players on the market collaborate to control prices and flows of information. What do we get? A cartel that holds the whole market in it’s hands.

If the power of ones voice is somehow determined by the amount of money spent then a DAO becomes a centralized entity covered only by an illusion of democracy, when in reality it is controlled and coordinated by few people.

dPOS elitism

In dPOS we have delegated nodes or masternodes that validate transactions on the blockchain. So instead of creating direct user engagement we have created a system where we once again delegate our system-given power to someone else. As it happens in normal elections there is a major difference between those who elect and those who are elected.

Such a system creates a borderline between the delegates and common people. Masternodes are higher in a dPOS hierarchy and have more weight in decision-making than ordinary nodes. Some masternodes are even able to decline or rewrite transactions that have already been made. Thus a new elite is born. Elite that is going to fight for power against each other.

What to expect?

I am not suggesting that what I’ve stated before is our definite future. But we should take appropriate measures now, before Blockchain-based financial systems take over every single part of our lives. We have to understand these little details to create such a regulated framework that will allow us to use the democratic advantages of DLT and dissolve all the totalitarian, one-sided, intricate features before those who wield power understand them and do the opposite.

The future is in our hands, we just have to make it right!