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Greg Meredith discusses blockchain’s role in climate change and governance issues in the industry with Isaac DeFrain and Christian Williams.

Transcript

Greg: I thought it might be good to return to how blockchain (and RChain specifically) addresses climate. Is that an okay topic with you guys?

Christian: Yeah, definitely.

Isaac: Sounds great.

Greg: Awesome. I’m interested in talking about it because it’s been coming up in some tweets with Vlad. He’s has been spending a lot of time on Twitter talking about governance, in particular, blockchain governance. I’m quite keen on governance, in particular, more decentralized governance and how that relates to climate change. Let me just check in and see if you guys have additional topics that you want to touch base on.

Christian: That’s definitely good. Maybe toward the end, we can brainstorm all the kinds of applications that RChain could do. I’ve been thinking about a lot.

Greg: I’d love to hear about those. It doesn’t have to be the end; this is your conversation as much as it is mine. It’s really ours.

Isaac: I second what Christian said.

Greg: You’ve got some ideas percolating in your brain as well.

Isaac: From my perspective, the biggest thing that I know blockchain can help with climate change, in general, is solving a coordination problem. I know that that scope is fairly large and I don’t even fully understand that scope. In discussing that further, maybe I can come up with some ideas.

Greg: There’s a clear connection between governance and coordination. We can begin there and see where the path leads us. One of the things that I think has been really interesting is this relationship between what’s legal— what’s a notion of jurisprudence—and how that relates to a community. Vlad, in particular, was talking a lot recently about whether or not there is any notion of jurisprudence that lies outside of the nation-state. Someone responded that the notion of law without community doesn’t make a lot of sense. A law binds a community together. That’s essentially what its function is when we’re talking about the law in that context as opposed to mathematical laws or physical laws.

Law is really what binds a community—a specific community as opposed to all communities, from here to Alpha Centauri. That’s a really important point. It also works the other way. This is where things start to get very interesting for blockchain. There isn’t really a notion of community that has agency without some form of governance. In particular, a community that has common resources and a community that can act in the world both internally and externally has a form of governance.

You can try a thought experiment. I was looking at a whole gamut of communities. Congregations certainly have a form of governance; student bodies have a form of governance. Even fan bases for artists typically have some form of governance once they start to have resources that they care about and start to be able to take action, such as promoting the band or shows. Scientific bodies have governance, whether you’re talking about the Nobel committee or the governance overarching a department in a university.

All of these different communities, in order to be able to have agency, have a notion of governance. That governance rises to the level of law at a certain point. The rules that they put together are binding on the community members. Suddenly, through the agreement that those rules are binding, they’re actually able to coordinate and function. I know that all sounds very abstract, but I just want to check in and see if these foundational ideas make sense.

Christian: You’re talking about the development of rules from being initially just standards or expectations, and then they become binding and formalized over time.

Greg: No, I wasn’t even looking at the evolutionary dynamics. I’m just simply saying if I look at a congregation, it certainly collects resources. The collections plate is passed out, for example. They then deploy those resources. For example, to buy grounds for a church or to upgrade existing church grounds or a mosque or synagogue. Those are all situations where the community, in order to function as a community, has to accept being bound by certain governance rules.

I’m really looking for counterexamples. It’s hard to imagine a community that has agency that doesn’t accept certain kinds of governance, being bound by certain rules. Whether you call them laws are not, they accept some form of governance.

Christian: That’s usually the way that they make themselves real and concrete, through that kind of formalization.

Greg: That language, real and concrete, I’m using the word agency. In fact, we recognize a community when it has agency. Until that point, it’s more amorphous. It’s not a community in its own right.

Christian: Can you elaborate on what you mean by a community having agency?

Greg: They have resources that they have to make decisions about. They can take action both internally amongst themselves and externally outside of the community. That notion of agency is the dividing line. Before a community has agency there isn’t really a pressing need for governance. The moment at which a community takes on agency, that’s when there has to be some form of governance.

This is critical and crucial because what we’re recognizing is that we’re facing an existential crisis. Eleven thousand scientists have signed a document saying that we are in a climate crisis. The situation is dire and we have to act. There’s this agency thing. We’re going to have to act in a fundamentally different way. I’m all about being able to give communities agency—help them formulate these binding rules and help them monitor behavior against those rules. This is where one of the places where blockchain can really make a difference.

Isaac: This is a really interesting notion and something that I’ve never really considered before, that you really need a community in order to establish some to some form of laws—to enforce them and so forth. Thinking about it like that makes sense and leads me to a question, what exactly is a community? It’s a collection of people with similar interests or something along those lines. We have all these different communities that have potentially similar or different goals. That’s why they form a community, to try to execute on those goals.

It leads me to wonder how all of these different governing bodies over these different communities, who governs all of the governing bodies? Why is there not another level of abstraction if we can take it from the community to a smaller subset of a governing body over that community, now we have a community of governing bodies. Why is there no next higher level of governance over that? In a similar way, it makes me think about why the entire population of the world is not considered a community. Why is there no form of governance over the entire population, the world community? Blockchain could help in terms of establishing some sort of a governing body over the entire world community.

Greg: It certainly makes sense. What you’re really talking about is a principle of compositionality.

Isaac: Yeah, exactly. Why do we stop at one layer instead of going up a little bit further?

Greg: N layers. Exactly right. That’s precisely what we’re talking about, to provide both a conceptual and an actual framework in which we can talk about composition because composition is the only way that nature scales.

One of the things that I thought was really interesting was this connection. A community that has agency has a form of governance. There is no notion of binding governance that isn’t scoped to a community. Do we have notions of binding governance scoped to a community that is composable? You just added a lovely property that I was trying to get across. It was very nicely put.

The point is blockchain provides a mechanism whereby the community can collect its sentiment. A really good example of communities collecting sentiment is all the feedback mechanisms that we find in social media: like buttons, thumbs up, thumbs down, that kind of collection of sentiment. It isn’t binding, it isn’t a decision, but it reflects the feeling of the community.

Isaac: It’s a representation of it.

Greg: Blockchain can absolutely help with that. This is really important. The other thing that a blockchain can help with is when you take that up a notch. When you go from just the collection of sentiment to the expression of will; when you move from a like to a vote. Blockchain can certainly help with that. It’s not immediate. You don’t go directly from a blockchain that can handle data at scale to a voting system. But it’s an important piece of the puzzle along the way.

Christian: When I got interested in blockchain a few years ago, my main reasoning was that I pictured it as offering this virtual canvas in which we can begin a methodical, rational exploration of how things should work. What you’re saying is exactly the kind of thing that I’ve been thinking about in terms of getting a more transparent representation of how people are feeling and what they’re thinking and then how to translate that into collective action.

Greg: A lot of people have intuited these notions, but they haven’t been expressed explicitly and informally. It’s about time that we do this. There are two pressures that suggest that we do this. Even if we didn’t have a climate crisis bearing down on us, we do have blockchain bubbling up from underneath, which crosses all these jurisdictional lines. You can write the theory of smart contracts that govern digital assets across multiple jurisdictional lines. There’s no way to adjudicate. Even if they all did submit to one of the authorities, there are still problems where judges may say this is a bad contract and there’s no way to affect an action.

Bubbling up from underneath is the question of jurisprudence in jurisdiction. Bearing down on us is the need to have decision-making power that is restructured. That’s the kind of crucible that we’re in there.

Isaac: There is no precedent for something like this. There’s an urgent need to figure out how exactly we shaped the governance and what exactly that is supposed to look like.

Christian: It’s a big new frontier that not enough people are thinking about right now. If you had some kind of simple example or proof of concept in mind to explain how you’re picturing this concept so far, in terms of one of these small communities, how they could use a small version of what you’re talking about.

Greg: Yeah, I think we do. One of the interesting points is that anytime a token is issued, we don’t yet have an RChain standard for the different kinds of tokens. I’ll just use the nomenclature from Ethereum. Anytime an ERC20 token is issued, you have essentially defined what it means to join a community—you’ve got a wallet that can handle those tokens—and what it means to show an expression of support—you’re sending those tokens to a particular address. Already you’ve got the workings of an expression of sentiment and even potentially taking it up to the expression of will.

Christian: I was wondering about specific hypothetical applications.

Greg: I thought wallets was a very specific application. It’s not even hypothetical. As soon as you design and mint a token, the community members are defined by those who have the capacity to receive and transmit the token.

Isaac: Their expression of will is their ability to transfer these tokens amongst themselves so that people can use them to do things. Fundraisers or something along those lines.

Greg: Right. It can be tied to other resources, but if it’s not tied to other resources, that’s when it’s more like a like. That’s when it’s more an expression of sentiment. I send my tokens to this address as an expression of my support for this notion.

Christian: I know it’s the necessary initial framework for what you’re talking about. You could the same thing about US dollars. They provide a framework for sentiment and will. What I’m talking about more is frameworks for building in guiding principles into a system. Right now, people spend their money on a lot of stuff that really doesn’t matter. We need things that guide and incentivize people to do the right thing.

Greg: Yes, yes, yes. Sorry to interrupt. Let me throw in an idea there and recognize that it’s the US government managing the control and maintenance of the token system that is the US dollar. It’s a reflection of the US community members and their relations to external communities. How those tokens are used is a reflection of the values of the maintainers of the US dollar. That’s why there are anti-money laundering laws. That’s why there are all kinds of KYC laws.

The US government doesn’t want the tokens to be used in certain activities. They don’t want their tokens to be used to money launder. They put in binding controls on the community for the use of those tokens. To date, that kind of setting up of a token system and setting up all of the rules around how those tokens are disseminated (or transferred or received), all of the rules around the transmission of tokens wasn’t done entirely in the fiat system by heavyweight machinery.

Once you have a blockchain, this all becomes much lighter weight. You can express it in code. Once you’re able to express the rules around the transmission of tokens in code, then it becomes easier for much smaller communities who don’t have the same kinds of resources to run Fort Knox and have a standing army that will defend it in the case of egregious misuse of resources. You shift from that very high capital-intensive world or high resource use-intensive world to something that’s much lighter weight. With the press of a button you can mint to token. Only with a little more effort, you can create a set of rules that govern how tokens are transmitted or disseminated within the community. Does that make sense?

Christian: Yes. That leveling the playing field is huge.

Greg: Yes, exactly. They no longer have to depend upon anyone. If there’s a global computer, if RChain is a world computer, they can’t be taken down because every time you shoot a node in the head, two more take its place. Once you have such an infrastructure, then any community can create these systems which help them codify their values. That’s a big shift.

It’s not the end of the evolution of governance. It’s the very beginning of the evolution of governance. But it’s a very big step. I don’t think that many people are talking about it like this. It needs to be talked about, but the conversation hasn’t been explicit.

We’ve said community and governance are inextricably linked as long as the community has agency. Then we’ve asked, how does the community monitor and maintain the behavior so that it matches with community expectations? We’ve suggested that tokenization is one way that that can happen. Tokenization covers a range of activities, from things like an expression of sentiment, which includes liking and thumbs up and those kinds of things, to binding behavior, like voting. That’s all connected just to tokenization. Tokenization is the smallest of applications that we can build on something like RChain.

Christian: What you just said is really big. The fact that this is going to provide the capacity for any community on any level of locality (or whatever other dimension) to begin to codify their values, that’s really big, but it’s also really difficult. In principle, we have the technology where anybody, if they were smart enough and knew enough programming, could sit down and write out their local government in a new, better form. In practice, it’s such a big, difficult question, about how to write a constitution for whatever you’re doing. We really need to make it easy for people to do it. There needs to be a lot of flexible frameworks in which people can easily express their values.

Greg: I agree with you 100%. There are a lot of really delicate and subtle and nuanced principles that come into play. We’re inching toward code is law. But as soon as you take this step toward code as law, you have to realize that that world is in many ways no different in complexity than the existing one. There are problems that are halting hard. Almost certainly, to coordinate community behavior, you’ll run up against problems that are halting hard. Expressing them in code might not be possible.

Going the other way, checking that you have expressed what you wanted to express in code can also be halting hard. Not always, but there will be many situations in which that’s the case. As soon as you hit that kind of situation, you have to know what you’re facing. There’s a lot of subtlety in making that step that I don’t think people understand.

As an example, if you’re just thinking about whether or not you trigger a particular clause in a smart contract, the determination that you call a particular subroutine is not a panacea. When you move into a world where code is law, that’s not going to solve all of our problems. It will create as many problems as it solves.

What it does do is allow for compositional forms of governance. The US nation-state has cities and counties and states and federal governments. It does have some notion of rolling up governance. It’s not fundamentally organized with the idea of composition in mind. If it’s going to be effective, if it’s going to work in such a way that we can live better on planet Earth, it has to be built out of this notion of compositionality.

This is something that Lawrence Lessig talks about very beautifully, he points to this notion of acoustic separation. The adjudicator puts a dividing wall. As an example of this principle, to one side, to the populace, the adjudicator may say ignorance of the law is no excuse. That motivates the community to learn the law, to be more responsible, more engaged citizens when it comes to what binds their behavior. To the other side, the enforcement side, the adjudicator says, ignorance of the law is a pretty good excuse. If you didn’t know, it’s hard to say that there was intent to break the law. That introduces mercy into the system.

There’s no mercy when it comes to a smart contract. The logic is cold. You have to think about systems that have forms of acoustic separation, that have forms of mercy. This is another principle that we have to actively think about when we’re talking about forms of governance, especially in this new world where we’re really looking at building up governance from the ground up.

Isaac: You both make really good points on this topic. There’s a sentiment out there that people are feeling disenfranchised, especially with the most recent elections and the level of manipulation that people have experienced in that process. One of the most important things that blockchain brings to people is it gives them the ability to truly grapple with these ideas, and to have a measurable effect on them, as opposed to just continuing with the status quo and feeling disenfranchised, like you have no power to change anything because the system is corrupt. This flips the script and puts the power back in your hands. It will encourage people to really think about these issues as if they’re real, not just something that people talk about.

Greg: That’s exactly right. I want to hammer on this idea that a community becomes real when it can act and we need to be able to act now. We can’t wait right there. There’s a reason why there are groups emerging, like Extinction Rebellion, and why people like Greta Thunberg are getting such support and their voices are resonating with so many people, because now is the time. This has been my hope and dream is that with RChain, the technology is real enough so that people can begin to feel themselves empowered, to form communities and to act.

Christian: That’s why I’m seeing law as just one aspect of this. I’m sure you’ll agree, but in the really short term, the applications that I’m really interested in are the ones that focus collective will and sentiment. Those don’t necessarily need to involve any kind of binding. They’re just about bringing together all these people that think the same thing but have been to diffuse or disperse and get them to have a serious impact. For example, divestment movements. There should be a way to organize, on a very large scale, divestment from a certain company. It should be properly incentivized.

Greg: Don’t you think that once you involve incentivization that that’s really a form of binding behavior? It is certainly a form of influencing behavior. Ultimately, to get the incentives, your behavior is bound.

Christian: What kind of incentives? I haven’t figured out what those might be in the case of divestment. Do you have any ideas?

Greg: Typically, divestment is some kind of economic benefit, some kind of credit. I really like Muhammad Yunus’s idea of social capital: incentives that have to do with social good. When we’re talking about large-scale movements, we don’t necessarily get buy-in on the same notions of social good. Whereas there is existing infrastructure to get by him on notions of economic benefit and credit.

Christian: It’s got to be economic.

Greg: And as soon as it’s an economic benefit, then we’re talking about binding behavior. You’re talking about people giving up resources in order that others might receive those resources. There’s a kind of linearity that ultimately ends up binding behavior.

Christian: You think a bunch of people could get together and offer some kind of economic resources to people that divest from Chase.

Greg: Yes, that’s correct.

Christian: I’m curious how you can get something like that to really happen on a large scale. I picture this app that first of all makes completely transparent the flow of money and influence in the economy and politics. You should be able to say to your phone, “I’m going to McDonald’s right now,” and it pulls up everything that McDonald’s has been funding. Then it gives you alternatives. It’s a framework for people to start divestment campaigns and set up their own incentive structure.

Isaac: You should pitch that app idea to the Sunlight Foundation.

Christian: What is that?

Isaac: I haven’t looked into it for several years, but from what I remember, the Sunlight Foundation specifically focuses on politics. I may be wrong about this, but in terms of where all of their funding is coming from, it’s a website and organization where they display all this information publicly.

Christian: That’s cool.

Greg: I spent some time talking about governance and how I connect the dots myself and how the conceptual framework in which I’m operating, but you guys said that you had a list of things that you were contemplating for how we might apply blockchain in this setting. Maybe we can change the topic. Christian, you said you’d been thinking about applications.

Christian: I completely agree with your big picture, that that is going to be the main conceptual framework that we’re going to be grappling with. The reason why I’m really interested in smaller-scale immediate stuff is because it’s such a big question. We’re going to need a lot of proofs of concept for how to build something so big. I’m really interested in that transparency app and figuring out how to connect it to organized divestment campaigns.

I was trying to start making a short list of other ways that RChain could help. One thing I was interested in is similar to local government and governance, but more like basic decentralized communication kits. If suddenly things go really bad in 20 years, just making sure that we still have internet and making sure that RChain is not dependent on the fragile infrastructure of the existing internet. Just getting the hardware and the physical decentralization to different communities and helping them set up their own communication networks.

Greg: Nash Foster and I thought about this a lot. His idea was that you could reinvigorate the economies of a lot of the interior of the US—a lot of the red regions, so to speak—by giving them a model for data centers. Giving them a model to become staking operations for validators. They build up a data center with a certain amount of compute and storage and network capacity, then they provide access to different blockchain networks, whether it’s different shards on the RChain network or across a variety of different networks from RChain to Ethereum to EOS. With smart engineering choices, you can make this a franchise or give a template or a boilerplate to various communities. That could reinvigorate their economy.

If they have access to cheaper electricity or a better cooling situation, then they’re incentivized to build out the infrastructure. Because you now have a bunch of these different communities that are building out the infrastructure as opposed to running everything on Amazon or Azure or Google, you potentially have a winning strategy. You’re taking a place where there’s a significant economic need and you’re turning it around.

Christian: That sounds really cool. To what extent is that depending on the existing internet infrastructure?

Greg: It doesn’t have to depend on the existing internet infrastructure. You’re still depending on TCP/IP, you’re still depending on the protocols, at least initially until that’s worked out, but you’re not necessarily depending upon the same set of major nodes for communications,

Christian: The actual cables and cell towers and satellites by which we connect as a nation.

Greg: If you build out enough of these data centers, then they can become their own hubs because it’s very decentralized. There are some interesting patents that will point the way to what you could do with WiFi if you were serious. I’ve often thought that the end of net neutrality ought to mean the end of depending upon wires, you get a truly decentralized situation.

If you can basically go from one WiFi modem to another, you route packets over that, you might ask, “Is the WiFi speedy enough to handle the load?” It turns out that you can make that kind of structure speedy enough if you introduce notions of concurrency. You do channel slicing and channel hopping; that can increase the feeds of the WiFi infrastructure. What that means is no one is in charge because now it’s this giant mash of modems that’s saturating.

Of course, you have to be careful as there may be environmental consequences. In theory, this gives you a way where there is no centralized cable provider. There may be problems; you have to explore what it means for planet Earth.

Isaac: As you guys are talking about this idea of bringing these data centers into different areas that don’t have an economically viable model of sustainability, using the fallout of the manufacturing industry and all of the buildings and infrastructure that that has left unused and created massive losses of jobs, to use those as the data centers may be a good direction to at least start in. Some of these communities have been completely devastated by the loss of manufacturing jobs, especially in the auto industry in Ohio, which I know very intimately. In Youngstown, Dayton, and Cleveland, there are several plants where they were manufacturing automobiles that are completely abandoned.

Greg: That’s exactly right. What we were looking at was the fact that automation is going to decimate the work opportunities for a very large percentage of people. The idea of building out these data centers was a way to fill in some of that gap.

Isaac: That’s a really cool idea.

Christian: I was coming at it from a different context, a darker context: if a bunch of our infrastructure collapses, it’s going to be infinitely worse if we don’t have national and global communication.

Greg: The point is that those two perspectives dovetail. That’s why I was bringing it up. If you look at the idea of reinvigorating local communities with new economic opportunities, and if those new economic opportunities just happened to be preparing for the collapse of infrastructure, which is almost inevitable given what we’re going to experience with the fallout of climate change, then it’s a win. It’s a double win.

Christian: How do you start a project like that? How do you even begin?

Greg: For example, I’ve got a friend who’s working on containers that you can use to drop to provide internet services for remote regions. It’s basically shipping containers that have local servers and satellite uplink connections.

Christian: That’s awesome.

Greg: It’s scaled down to where an individual or a small group can purchase one of these things and provide basic infrastructure. They were interested in running an RChain node to do a lot of the economics of the data services. You could take the architecture of one of these self-contained containers and then say, “What would it be like to have a farm of these?” If the environmental impact leaves us worse off than when we started, it’s not a good idea.

I did want to mention that your idea about the transparency app is actually a lot more complicated than you might think it is. It’s not exactly like McDonald’s is going to hand over their financials.

Christian: The first step would be figuring out the current laws. I’m pretty sure a lot of this stuff does technically have to be made public, but they just hide it behind a lot of bureaucracy.

Greg: The same is true in the music industry. There are all kinds of laws that govern the dissemination of funds for use, but the music industry is still able to hide billions of dollars worth of profit every year. You can imagine that an industry like McDonald’s or the food and agriculture industry in general, they don’t have a lot of motivation to be fully transparent.

It’s a great vision, but to be perfectly honest, while you say that this idea of tokenization is big, it’s big conceptually because it’s such a big container. It holds lots of different things. In terms of realization it’s actually fairly small. We know what it is to build the blockchain that allows for the development of a tokenization contract. That’s something we can do. What’s big is small and what’s small is big.