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Recently, Ethereum Classic (ETC) has been going through several crises and controversies. Some of those involved the kind of circular problems that Nassim Nicholas Taleb mentioned in his article “The Most Intolerant Wins: The Dictatorship of the Small Minority” where he wrote the following rhetorical questions:

Would you agree to deny the freedom of speech to every political party that has in its charter the banning of freedom of speech? Should a society that has elected to be tolerant be intolerant about intolerance?

As the above “freedom of speech” and “tolerance” dilemmas, in the blockchain industry there are similar dilemmas, one of which is related to “permissionlessness”. To illustrate it, an analogous rhetorical question when referring to permissionlessness would be something like:

If a blockchain is permissionless, should participants have permission to do things that undermine permissionlessness?

My answer to the above questions is the same one I use to object to people when they say “free markets means no rules or the law of the jungle”. That is not true, the truth is to the contrary: Free markets are free because they are dependent on very strict rules that have to be followed and enforced.

For example, free markets depend on strong property laws, contract laws, in some cases specific times and places where transactions have to be conducted, settled and in what form, information transparency rules, and the thorough enforcement of these and many other systems.

In the same way, freedom of speech, tolerance, and permissionlessness are strict rules, sometimes encoded in constitutions, the law, or culturally ingrained in social norms, that have to be thoroughly enforced and actively defended.

This is how I define the permissionless fallacy in the blockchain space in general:

Because a blockchain is permissionless that means that anything can be done, even if it undermines permissionlessness.

However, the correct argument is:

Because blockchains are permissionless, anything that undermines permissionlessness must be stopped.

Of course the permissionless fallacy is presented in not so direct, but much more subtle forms and flavors in real life!

Some Cases in ETC

In Ethereum Classic in particular, it has been argued that requesting to be an admin in the community repo on Github and then removing all other admins is ok because it was permitted in the Github terms of service.

More recently, a developer team decided to fork the community Ethereum Classic Improvement Proposal process (ECIP) because ETC’s software is open source and in the open source industry forking is a social norm, therefore forking the ECIP process is perfectly fine.

In the last few days another member of the community was re-floating the idea of creating a foundation or several foundations because they can have tax advantages which motivate people to donate money for development, thus potentially solving the lack of financing for such important activities in ETC.

All of the above are different forms of permissionless fallacies. The fact that an admin can revoke other admins, that anything can be forked in the open source software industry, and that anyone can form a foundation if they want to does not mean that it is perfectly fine to do all those things, even if they have ancillary benefits, if they undermine permissionlessness.

The Question is: How are Permissionless Fallacies Resolved?

Whether the underlying action is good or bad, right or wrong, popular or controversial, or beneficial or catastrophic, permissionlessness does create an environment of freedom that makes it difficult to overcome permissionless fallacies.

In my experience in the blockchain industry it seems the situation depends on two dimension: severity and ecosystem size.

For example, if some developer teams are building bridges, wrappers or doing some collaborations with the teams of other chains which have no interest in benefiting ETC, but those activities benefit the other chain in the form of signaling in the context of a standards war, but not ETC, that would not be as severe as integrating into a mainstream client, bypassing the improvement proposal process, a new arbitrary change in the monetary policy which significantly undermines the immutability guarantees of the network and significantly changes economic incentives, while somehow convincing miners and node operators into deploying it.

On the other hand, when a blockchain is small as ETC is, with a growing, but still not sizable ecosystem, it is much easier to capture some community resources under the cover of permissionless fallacies than in a huge network as Bitcoin worth tens of billions of dollars, which has many participants, including a large developer base, enormous hashing power, and economically large full node operators, in many regions of the world. This is because in a large ecosystem it is either much easier for the natural forces of the social layer to prevent undesirable actions, or such actions are so insignificant relative to the size of ecosystem that it doesn’t matter anyway.

Conclusion: Moving Forward in ETC

As to a couple of the particular events and permissionless fallacies mentioned in this post that have presented themselves in the last few months in ETC, I think it is unlikely KryKoder will ever return the Github organization and restore the previous admins. Similarly, and for different reasons, it is unlikely that the officials or developers of the company will ever give a reasonable explanation for that action. I think at this point the community must move on.

However, it is very plausible that a unified yet decentralized ECIP process will emerge from the recent Github admin and improvement proposal controversies. This could even be a net positive for ETC because the KryKoder actions may have led to a more advanced and decentralized improvement proposal process, which will be more advanced and adapted to secure blockchain consensus changes than the Bitcoin Improvement Proposal process (BIP) and the Ethereum Improvement Proposal process (EIP).

Nevertheless, that a bad actor may have contributed, in a perverse way, to a positive change in the ecosystem does not mean that that bad actor is not such. This means that ETC must continue to remain vigilant and always defend itself as best as possible from permissionless fallacies.

Secure, proof-of-work, public blockchains are, and will always be, under constant social attack.

Code is Law