World News /21 Jan 2018

What if Votes were a Crypto-Currency?

It seems that we live in a world where we do not trust those whom we elect to shape our society. Take a moment and let this sink in. Doesn’t this seem surreal? Given this distrust in the political system, is it any surprise that voter turnaround in elections has been on the decline almost everywhere in the world? Maybe it is time to try something new, something radically different

It’s important to separate the principles of democracy from the tools used to realize these principles. Surprisingly, there is no consensus on what constitutes a democracy.

Democracy is associated with elections, voting, presidents and prime ministers. However, it is important to realize that these are all tools to realize one particular form of democracy — a representative democracy.

Representative democracy is a severely limited realization of democratic principles. These limitations span three dimensions. First, citizen representation is extremely limited.

The number of individuals whose preferences an elected representative is supposed to represent is so large as to be essentially meaningless. The problem is exacerbated in a rapidly urbanizing world with increasing population density, but without a corresponding increase in the number of representatives. Furthermore, since urban settings often have individuals from very different cultural backgrounds, their preferences are diverse too. Is it realistic to expect that a single individual would be able to represent the preferences of such large & diverse communities?

Second, elected representatives have limited accountability. The only opportunity that citizens have to hold elected representatives accountable is often year’s away — ample time for incidents to be forgotten and perceptions to be manipulated. Since human memory over-emphasizes the recent past, elected representatives manipulate perception of their performance by populist measures closer to forthcoming elections.

Third, citizen cognition is not leveraged. The current model where default participation is limited to choosing representatives every few years does not engage the intelligence of citizens in solving the societal challenges we face today. Instead, it treats citizens as consumers, offering them a menu card to choose their favorite representative.

To summarize, representative democracy does not scale well. With our societies becoming denser, more interconnected and more complex, the traditional tools of democracy are no longer effective. To quote Edward O. Wilson: “We have created a Star Wars civilization, with Stone Age emotions, medieval institutions, and godlike technology.”

Design Choices of Representative Democracy

Consider the following thought experiment: what would happen if we think of votes as a currency? Let’s call such a voting currency — GovCoin. In today’s representative democracy,

  1. GovCoins are in short supply — one citizen gets one GovCoin (vote) every 4–5 years.
  2. GovCoins (Votes) have a very high negative rate: if you do not use them on Election Day, they lose all value.
  3. GovCoins (Votes) are “accepted” by very few people: you can give your GovCoins to only pre-selected “candidates.”

These design choices reflect fundamental design choices of representative democracy — they were well suited for the time when they were designed. Since governance needs continuity and since elections were a costly and time-consuming exercise, citizens elect representatives once every 4–5 years. Since the number of people interested in politics as a full-time profession is limited, the choice set of representatives is limited to a few candidates.

Are these design choices valid today? Do we really need citizens physically travelling to polling booths? Must the choice of citizen participation in governance be binary: either jump in full time or be limited to vote once every 4–5 years? Aren’t there other forms of participation in this spectrum?

What if we reconsider the design choices of democracy? Let’s say we:

  1. Increase the supply of GovCoins so that every citizen gets one unit every month.
  2. Relax the negative rate, so that even if you do not “use” your GovCoin, you do not lose it i.e. you can accumulate GovCoins and use them at a later time.
  3. Enable you to give your GovCoins to anyone or any public issue/project.

By increasing the supply of GovCoins, we inject liquidity into the system, so that information (about citizens’ preferences & beliefs) can flow more fluidly. This effectively increases the participation potential of citizens in governance. Rather than limiting participation to once every 4–5 years, citizens can participate as much and as often as they want. This is a fundamental change, when we consider institutions as information processing systems.

By enabling citizens to transfer GovCoins to anyone, we realize a form of liquid democracy where I can delegate my influence to you — maybe because I trust your judgment and believe that your choice will be beneficial to me as well. In effect, we have changed the default option of participation from ‘opt out’ to ‘opt in’ — every citizen can receive GovCoins from every other citizen. The total GovCoins a citizen holds is a measure of how much influence she holds in democratic decisions. We evolve from a binary system (elected representative or citizen) to a continuous spectrum where your GovCoin ‘wealth’ is a measure of your social capital.

By enabling citizens to transfer GovCoins directly to a policy decision, we realize a form of direct democracy where citizens can express their preferences on an issue directly rather than relying on a representative to do so.

By allowing citizens to accumulate GovCoins, we allow them to participate when they want. If I feel strongly about an issue, I can spend my GovCoins and influence this decision. If I am indifferent about an issue, I hold on to my GovCoins so that I can have a larger influence in future decisions. A small negative interest rate on GovCoins may still be needed to ensure that (i) citizens do not hoard the currency and (ii) to ensure that net influence of any individual is finite and time bound.

Given today’s technological landscape, realizing a democracy with new design choices is no longer a pipe dream. The potential to do this is here and now. A key enabling technology is Blockchains (or Distributed Ledger Technologies), which allow the creation of new currencies. Implementing votes as a currency opens the door to realizing new forms of democracy. In fact, at Koinearth we are developing these solutions using a combination of blockchains, mechanism design & machine learning.

At their core, Blockchain enables a secure, trusted ledger that can hold a record of account balances in some currency. With votes considered a currency, blockchains have an immediate application of being used as a secure & trusted technological backbone of election systems. In fact, several such proposals are now actively being worked on. Some efforts are also underway to implement liquid democracy on blockchains; there are some very interesting problems to solve in this space. Important as these solutions are, let us try and push the boundary of how blockchains can transform democracy.

Blockchains enable the algorithmic creation, allocation & destruction of a voting currency (GovCoins). Algorithm creation of GovCoins means a fixed & known approach to when & how many GovCoins will be created. The algorithm for currency creation is implemented on a secure, trusted ledger, Blockchain, that cannot be manipulated.

Algorithmic allocation of GovCoins means that the rules of who will be allocated new GovCoins are configurable and once configured are fixed & known. Interesting variants of this theme are also possible e.g. what is the equivalence of proof-of-work for GovCoins? Should some citizens get more GovCoins than others? What if they contribute more towards social welfare? Is there a way to earn GovCoins? These are interesting questions that we need to discuss as a society.

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