It is said that with great power comes great responsibility, and this is abundantly the case regarding how the blockchain and cryptoeconomy will operate as it grows into a place within mainstream society. While this subset of the financial ecosystem is still in its infancy, those with an eye on its future have begun to think about how designing peer-to-peer (or sharing economy) services based in the blockchain will best serve the interests of both its participants and the network as a whole.
To explore this topic, Crypto-101 host Matthew Aaron invited Josh Fraser of Origin Protocol back to the podcast for a debate on the pros and cons of 3rd party intermediaries and whether their presence is beneficial, detrimental or negligible when it comes to blockchain-based/sharing economy applications. While Matthew remained unconvinced by Josh's perspective that eliminating the intermediary in peer to peer transactions is a positive direction to take, the discussion does highlight that some deep consideration is warranted at this very early stage in blockchain's evolution.
To take a step backward, let's clarify what the sharing economy is. You may be unfamiliar with the term (sometimes more accurately described as the access economy) but you're actually quite likely to have used a service based on this economic model. The sharing economy is centered around providing access to goods and services through an online access point and carried out by individuals offering up their own time and resources. If you've taken an Uber or Lyft, stayed in an AirBnB or had food delivered by BiteSquad, you've participated in the sharing economy.
The aforementioned entities, however, are still split between innovative and more traditional business practices in that they rely on the use of a third-party arbitrator, the value and utility of which is at the center of our debate. Matthew argues that the middleman entity has a stake in the arrangement and acts as a protector for the users' interests. Its reputation (and by extension its profitability) dictates what kinds of behaviors are prohibited by users of their platform.
For example, Uber (who acts as a centralized authority in this instance) has banned users of its service for posting racist Tweets. Matthew argues that this is an acceptable approach, kind of a win-win for both the platform and its users.
Josh counters that perhaps the line in the sand between acceptable and unacceptable behaviors could gradually move and eventually encompass less overtly controversial ones. Free speech should be protected, he argues. Potentially, the solution could be settled in the marketplace when users decide to vote with their wallets, but currently this is bypassed by Uber taking a public stance to protect its bottom line.
So who arbitrates between users in a P2P environment that has no intermediary? While Josh doesn't provide any specific examples, he remains confident that innovation and experience will shape decentralized mechanisms to protect users of sharing economy platforms.
Could the consensus of the community itself provide protection for both individual users (sovereignty) as well as the platform as a whole (reputation)? I disagree with Matthew that an intermediary is utterly necessary, but it would necessitate an aggregate of opinion from the users to serve the same function. How might this be accomplished?
A network's reputation could potentially be safeguarded by consensus voting within the platform's community. This got me thinking about how BitShares was designed (using Dan Larimer's delegated proof of stake) to validate the blockchain as well as to address the decision-making process of its overall structure.
Social trust assumptions can work well in many contexts, but they are difficult to universalize; what is trusted in one country or one company or one political tribe may not be trusted in others. They are also difficult to quantify; how much money does it take to manipulate social media to favor some particular delegate in a vote? Social trust assumptions seem secure and controllable, in the sense that “people” are in charge, but in reality they can be manipulated by economic incentives in all sorts of ways.
(In fairness, here is Dan Larimer's rebuttal to Vitalik)
The comparison here is imperfect, unfortunately, as DPoS governs a financial/operational network rather than an ethical decision-making one. What is being deemed above as "bad behavior," is theft, which is a very clear and binary circumstance. To effectively address more nuanced human behaviors such as hate speech, bigotry or categorical exclusion the complexity of the mechanism must match that of the problem.
I'm also lead to the logical assumption that specific P2P, sharing economy networks could develop their own cultures and sets of norms, but whether they are benevolent or reprehensible is in the eye of the beholder. Individuals outside those systems could choose to participate with or boycott them accordingly, though... which leads us back to voting with our wallets.
My personal takeaway was that for Josh's prediction to be fruitful, designers of Decentralized P2P platforms (DP2P?) will need to make a close examination of the power of incentives. Although Matthew and Josh could not arrive at a consensus in their debate, the discussion does raise some incredibly important questions: What do we want out of this new technology and how will we design it to balance the needs of the individual with the needs of the whole? How will those decision facilitate (or hinder) adoption? What's the whole point of all this. WHEN MOON?
The one thing I do believe we can all agree upon, however, is that a lot of big changes are coming — and those changes, while positive, will come at a cost. Exactly how we address and balance those costs will be make-or-break for both individual projects and the cryptoasset / blockchain economy as a whole. Whether or not a governance model can be developed to protect both individual sovereignty and the economic viability of a decentralized peer-to-peer sharing economy remains to be seen.
———————————————————————————————————————————————————
Big thanks to Josh for taking the time to be on the program again. Read More about the Origin Protocol project HERE
Listen to the debate on the Crypto101 podcast HERE
Interesting article, it is my first time hearing about the potential corruption issue surrounding DPoS. What do u do @scottwehman? Are u a consultant?
Not a consultant, just an enthusiast. Seems Buterin and Larimer have some basic discord with each other's philosophical grounding...
Congratulations @scottwehman! You received a personal award!
Click here to view your Board
Do not miss the last post from @steemitboard:
Vote for @Steemitboard as a witness and get one more award and increased upvotes!
Congratulations @scottwehman! You received a personal award!
You can view your badges on your Steem Board and compare to others on the Steem Ranking
Do not miss the last post from @steemitboard:
Vote for @Steemitboard as a witness to get one more award and increased upvotes!