Liquid democracy: Blockchains and governance in the post nation-state era

Intrigued by what Democracy Earth Foundation is doing to leverage the power of blockchain to empower a different approach to democracy, I asked the team to share more about its work.

What is Democracy Earth Foundation?

Democracy Earth Foundation is a California 501(c)(3) non profit that is building a blockchain-based, tokenized liquid democracy governance platform. We are an international team building in an open source environment.

What are the problems you’re trying to solve?

Our world is facing increasing globalization, privatization and digitalization: these forces are changing what it means to be a citizen and a human on earth. These changes have manifested primarily in the economic and political sphere, where vast inequality has created an unsustainable crisis of global proportions.

In the economic sphere, 600 million people still live on less than two dollars a day. While inequality between nations is gradually falling, it remains extraordinarily high. Inequality within countries is also rising - a condition economists like Thomas Piketty warn will not naturally correct itself. There are many reasons for this rising inequality within countries -- in developed nations globalization has mainly rewarded the wealthy class while hurting the lower classes with manufacturing outsourcing. A lower share of profits is going to labor than to capital, especially in the tech sector. This precarious economic situation will only worsen with the advance of  automation.

Meanwhile, in the political sphere, democracy is in global recession. Citizen voices are either suppressed under authoritarian regimes, or depressed by lack of financial and political capital which marginalizes participants. According to Freedom House, 55% of the world’s population live in countries that are deemed “not free.” Even in democracies, citizens who feel they are not represented well lack the means to change this. Participation rates are low in elections and money seems to control every aspect from how districts are drawn, to which political demands get answered. We view this political breakdown primarily as a liquidity problem - people who most need political change do not have the resources to bring it about - as well as a legitimacy problem, because centralized and easily corruptible ledgers of political institutions do not create trust or a desire to engage among citizens.

We aim to upgrade democracy to the Internet era, formalizing humans on blockchains and enabling new forms of participation and representation that enable global citizens to address the problems that nation-states and digital monopolies have proven inadequate for the task.

How does cryptography and blockchain solve these?

Liquid democracy - in combination with blockchain technology - is at the core of the Democracy Earth governance platform. Liquid democracy is a system that allows for both direct democracy and representative democracy. Instead of having representatives based on territory who vote on all issues for their constituents, liquid democracy allows individuals to choose representatives that are experts on narrow policy issues or members of their social network. If they feel that their representative voted incorrectly or if they change their mind on the issue they can revoke that vote at any time. It creates a more flexible system that enables greater participation while still allowing for knowledgeable representation.

Liquid democracy has only recently become feasible. Any notion of delegating and revoking with paper ballots would be functionally impossible due to its sheer complexity, but the internet makes sending someone a vote, tracking how they used it, and revoking the vote if dissatisfied, very simple. Of course it is now common knowledge the internet is a highly insecure place to hold elections; there is substantial evidence that the 2016 US election was manipulated through hacked voting machines. Making elections more digital on the current internet would be foolish; centralization is fundamentally incompatible with democracy. The Democracy Earth network will be based on blockchain technology.

Blockchains allow for information to be stored in a decentralized manner that makes it functionally impossible to manipulate - in a word, incorruptible. A blockchain is a distributed ledger system. A ledger is a record or database full of data such as transactions or votes, and distributed means that this ledger is held in multiple places. This ledger is maintained by “nodes,” essentially computers running a program that is specific to that blockchain. A copy of the ledger is held on every node in the network. Anyone who downloads this program can view the ledger and know that the copy they are viewing will be constantly updated and checked against everyone else's copy to ensure that they match perfectly. They are kept synchronized because all the nodes are connected to the internet and are able to update in real time.

These nodes use a special consensus algorithm to make sure that they all are holding a ledger with the same information and history, and to overpower this algorithm, someone would have to take control of more than half of the computing power (known as a ‘51% attack’) in order to convince the network to change this ledger or to add false information.

This is what makes blockchains so special. To change data in a centralized source, like standard websites, someone only has to gain access to one point; in contrast, with a blockchain one has to overpower hundreds or thousands of points. While centralized sites keep their data and algorithms secret, with blockchains, anyone can view any transaction at any time.  This ‘permissionless auditing’ means anyone can audit the information to make sure it is accurate, without needing access provided by intermediaries.

Though blockchains store information publicly and are easy to audit, they still preserve anonymity. Recorded in the ledger are data alongside digital public keys. Every user has a pair of digital keys: a public one, which anyone can see but cannot trace back to the user, and a private one, which they use to access their data and they know is linked to the public key. This allows them to check the ledger to see that their data were recorded correctly, but makes it so others cannot see who conducted which transactions or cast which votes.

There’s a lot of instability, volatility even, around blockchain technologies, particularly bitcoin. Is this technology stable enough to support global currencies and democracies? If not, when can we be comfortable that they can?

This is a multi-part answer.

The first to address is that our platform is running on the Ethereum blockchain. The price of Ether (Ethereum’s currency) also fluctuates but it should be noted that our VOTE tokens are a separate token from Ether, and the Ethereum blockchain is just providing the security for our platform and our platform is essentially a structure built on top of it. What is more important to focus on than the fluctuations in price, which are mainly driven by speculation not any real changes in the technology, is the security of a blockchain itself. Both Ethereum and Bitcoin are highly secure blockchains with many validating nodes and robust communities of users and developers. Even with the price fluctuating, using these ledgers to store information -- such as votes as we propose to do -- is completely doable.

There is a question about scaling. At the present moment, the Ethereum network would not be able to support the number of users and votes associated with a global democracy. That being said, every blockchain based project that aims to use the Ethereum blockchain faces this same issue of scaling which means that huge investments of time, money, and intellectual effort are going into fixing this problem right now. Multiple solutions for scaling have already been proposed and are in the process of being implemented.

What is Sovereign and how does it work?

Sovereign is the working name of the Democracy.Earth liquid democracy governance software. It is a platform that allows users to propose ideas, create votes, debate issues, vote directly and delegate (as well as revoke) their vote. It is censorship-resistant; voters neither give away personal information to participate, and can vote anonymously on any proposal for which they meet the requirements. Our beta release is now on the Ethereum Rinkeby testnet at testnet.democracy.earth, where you can experiment with censorship-resistant voting, debate and token delegation. The platform now has limited functionality, but you can vote with  any token - our own VOTE tokens but also any ERC20 token(s). Results of polls are transparent and verifiable by all participants, not requiring an intermediary or vulnerable to any authority hacker. In addition to this testnet sandbox the platform is being used to provide governance among crypto communities like Decentraland. One interesting current use case of the platform can be found at Blockstack, where the Democracy Earth platform is implemented as part of the governance to the innovative App Mining program, helping to allocate a subsidy of $100,000 each month among dapp builders being voted on among the community.

What is the ‘Social Smart Contract?’

The Social Smart Contract is Democracy Earth Foundation open source white paper released in 2017. The language is not accidental - according to theorists such as Thomas Hobbes and John Locke,  the social contract is an implicit agreement among the members of a society to cooperate for social benefits - i.e. the origin government itself. The social smart contract is similarly an agreement - and protocol - for  how to implement this cooperation in the digital age. It puts the importance of blockchain technology and our governance protocols in the context of the challenges to democracy and human flourishing that we are witnessing in our world today, as well as a detailed explanation of our platform and its implementation. It is complemented by our Token Economics white paper, that was released in July 2018 at economics.democracy.earth.

You’re a big proponent of open source technologies? Why is open source important to your work and a healthy democracy?

The platform has to be open source so that the software is available to anyone for free and the code is transparently available for anyone who wants to see it, analyze it or modify it.

Open source is both an ethos and a series of procedures that are used for developing and updating code. It is an ethos because it is used by people who believe that software should be available for free, and have a truly democratic and meritocratic process of creation.

We believe this is the right way to build software, and also that it  just makes for better software, especially governance software. It is a series of procedures, because it involves making our code available on an easily accessible website, for example GitHub (now owned by Microsoft), and allowing for others to copy it and propose changes or additions to it.

How can those excited about your work get involved?

There are many ways they can help.

The first and foremost is to join us on our platform: testnet.democracy.earth - you can get your test tokens and a simple guide on what’s involved with a Web3 login to joining our  censorship-resistant platform on the Democracy Earth Medium publication, Hacktivism, at the article “testnet.democracy.earth is LIVE!” where they can create a profile, pose questions and votes, experiment on it, and invite other users to it join.

Next, if they have a particular vote or decision that they are involved with with any organization, they could use our platform to conduct it. For example, a board vote, a school election, a club election, or even a county or city election - they should reach out to the foundation at hello@democracy.earth to learn more about conducting a pilot.

Finally, they can look into becoming an ambassador meaning an individual who promotes the mission of Democracy Earth to the wider community. Or if you are at a university, consider becoming a student ambassador. Information about the program can be found at the Democracy Earth Student Ambassador repository in GitHub here.

If you are a developer, reach out to the development team at code.democracy.earth, and if you want to volunteer in any way, contributing your marketing, editing, writing, video, business or fundraising skills in some way to the foundation, simply reach out at hello@democracy.earth with your ideas, and someone will get right back to you.

You can usually interact with a team member on our social channels in Slack (chat.democracy.earth), Medium (words@democracy.earth) or on Twitter @democracyearth or Facebook.