Governance models: from virtual to real experimentation

From simulation of civilizations in virtual worlds to decentralized smart contracts, are we on the path to a new form of decentralized governance?

There is no doubt that great progress has been made in recent centuries, at least in many places in the world, in terms of governance, from slavery and archaic feudalism to modern forms of democracy. I do not think however that there would be any reason to believe that the current state of affairs is in any way optimal and could not be improved upon. Actually, it is quite easy to convince oneself of the contrary. Our democracies are built upon technologies from the 18th century, more or less, with an election every four or five years, that picks a candidate mostly based on its ability to get elected, and some vague correlation with a political vision that is often reduced to ideologically rigid positions. You might like what a candidate proposes in terms of economy, but prefer another one on societal issues, but unfortunately, the granularity of the process does not allow you to combine these preferences into a coherent whole. You often end up choosing not what you like, but what you least dislike. More importantly, the feedback mechanism by which errors should lead to corrections is notably flawed. It is often the case that politicians can make dramatic mistakes but get away with them. As said above, politicians are selected based on their skill at winning elections, which may or may not be accompanied by skill at making good decisions in terms of policies. These two competencies are mostly disconnected, and unfortunately, the democratic process selects for the former, hoping to accomplish the latter. We could talk also about the issues of lobbying or corruption, which shifts the power from the voters to some particular interest groups, making the democratic process far from perfect. But yes, it is still probably our best option for now.

If we look at alternatives or refinements to democracy as we know it, it is unlikely that it could come from the past, because centuries of thinking have gone into trying new ideas and refinements, and anything that you can imagine has probably already been discussed since ancient Greece. As with everything in History, the key enabler of change and progress is technology, not politics (this might be a controversial position, but I strongly believe this is the case. Debating this however could be the topic of an entire post!). So, where should we look in terms of new enabling technologies for governance? I can see three major tech innovations that have the potential to redefine the map and enable new ideas, let's have a look at them.

The first technology is of course the Internet. In the last decades, which is a very short time, we moved from a world where people were separated by large amounts of space and time to a world where everyone can be connected to anyone, at any time. I believe the magnitude of this revolution has still not been fully grasped by the modern world. When I started to think about questions of governance, somewhere around 2012, I gradually came up with the concept of Dual Universe, a virtual world where I hoped to gather millions of people, interconnected via the Internet into a giant simulation integrating economy, war, exploration, building, and politics. We called it a "simulation of civilizations", and as soon as 2018 I started to present this as the "metaverse". One of my goals, besides trying to make a fun game and a great company, was to explore the potential of this virtual micro-society to invent new political models. Experimentation would be much easier, and much less costly, which is good because experimentation is a key component to making progress in anything. I started to design some building blocks to represent all sorts of organizations, that the players would be free to assemble to create anything from a dictatorship to representative democracy, and anything in between. It came also with a formalization of the notion of property rights, the design of an organization being very often all about defining who has the right to do what with collectively owned assets. Dual Universe is about to launch at the end of this month, with a simplified implementation of these ideas for now, but already with a vibrant community and thousands of organizations created. We shall see what comes out of it!

The second revolutionary technology is cryptography, which allowed us to move from a form of the Internet where everybody was shouting in the ears of everybody else, to a place where privacy was becoming possible. This is crucial because it enabled all sorts of applications related to privacy that would not have been possible without the mechanism of private/public keys encryption. More specifically for our point, privacy is also a key component of any form of governance, simply because we should offer a way to vote non-publicly to avoid all sorts of biases related to coercion and influence.

The third and latest technology is the blockchain. It is somehow the natural continuity of the first two: cleverly combining the Internet and cryptography, blockchain technologies enable us to not only connect people but also allow them to interact in ways that do not require them to trust each other, or force them to use a third party to establish this trust. The blockchain is the realization of a private, trustless network of communication between all people anywhere and anytime in the world. A pretty good bedrock to start to think about distributed, decentralized governance models. It is a true innovation that puts something really new on the table, and which carries the potential to reshuffle the cards. Note that I'm not talking here about cryptocurrencies, which are one component of the applications of blockchain technologies, but far from the only one and perhaps not the most important one. It might not be easy to see the potential of blockchain technologies right now, because of their relative immaturity and also because the field is currently plagued by hype and populated by people with all sorts of dubious motivations, but I believe that eventually the power of this idea will reveal itself.

I could perhaps also mention a fourth innovative technology, built on top of the concept of the blockchain, which are smart contracts. Smart contracts turn the blockchain into a decentralized global virtual machine, allowing it to run code that acts on a decentralized and trustless global "State". This innovation, initiated by Vitalik Buterin with Ethereum in 2013, is crucial because it allows to turn interaction protocols between participants into code, which is necessarily going to be a central part of any decentralized governance system. Actually, governance systems based on smart contracts already exist and are called DAO, Decentralized Autonomous Organization. DAOs implement via smart contracts how certain rules related to a shared system can be modified by a community, with all sorts of innovation in terms of voting systems and governance. In retrospect, this is in fact what I tried to create at the time with the organization system in Dual Universe, but this time applied to the real world and with a much larger reach.

One central promise and a core pillar of blockchain technologies is decentralization. To remain trustless, the network of interconnected nodes participating in the dynamic elaboration of the blockchain consensus must be structured in such a way that no central authority can control it or even influence it. You might think that a central point of coordination, like the government, would do the job pretty well and in a much simpler way than all this blockchain complexity. But think about this simple fact: if a vote is cast to decide to replace a given government, and this government is precisely the entity you must trust to run the process of collecting this vote, can you really trust it? In most modern and peaceful democracies, perhaps. But it might change after an "accident" occurs. In several places in the world, in Africa for example, this is also often not the case: elections are rigged, results are contested, instability follows, etc. The process of governance selection should ideally not be entrusted to any particular entity or group of people, simply because the overwhelming power that is attached to it will eventually corrupt any system in the long run, and then there is no peaceful turning back. There was historically no other solution but to trust a central authority in the past. For the first time in human history, this is not the case anymore.

Unfortunately, many of the currently advertised blockchain technologies are not as decentralized as they claim. It is not enough to rely on a decentralized model of independent nodes to have effective decentralization. In particular, the number of those nodes and their relative size are important. One example is Bitcoin, where just a few powerful miners are collectively large enough to be able, in principle, to take control of the network. There is a concept to measure this de-facto centralization, which is the Nakamoto coefficient: it represents the number of entities that need to be corrupted to gain control of the network. Most popular blockchains today have a Nakamoto coefficient below 10. Even if you might have thousands of participants in a given network, just a handful of them could possibly collude in order to take over. They usually don't, because their financial interest rests with the fact that the network is perceived as secure and decentralized, but they could, and with the prospect of immense political influence that could be born out of truly decentralized governance, it is not enough to rely on financial interests to prevent collusion.

It is in this context that I became very interested in a relatively new blockchain technology called Massa, which focuses on fulfilling the decentralization promise via a series of technological and design innovations explicitly made for that purpose. After first investing in this company, I became so interested that I decided to join as Research Director and strategic advisor, and help with the research efforts currently ongoing. The key idea of Massa is to not simply run a chain of blocks, but run a more elaborated structure that allows to process several chains in parallel and still maintain a global consensus on the State. The result is a Layer 1 technology capable to process in principle up to 10.000 transactions per second, with a proof of stake approach, combined with several innovations in how the protocol is designed so that participants of all sizes can take part in the network, which is crucial to maintain decentralization. There are currently more than 7.000 nodes running in testnet, with experiments pushing to 3.000 transactions per second and a Nakamoto coefficient of 1000. Massa smart contracts also present several interesting innovations, in particular the fact that they can run autonomously without the need of an external server to wake them up, which is another advantage to favor decentralization.

The ideas developed at Massa Labs represent a modern and fresh perspective on the idea of decentralized blockchain, which might be the right foundation needed to start to think seriously about how to implement effective forms of decentralized governance, and more generally decentralized systems. The path is still long ahead and many innovations will undoubtedly still be needed, but for the first time in at least two centuries, new ideas propelled by technological innovation are entering the scene on how to reinvent our societies, and perhaps succeed in making them better.

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