The power of democracy (when done right)
Allowing anonymous operators into the system with no financial commitment is a significant problem. Because attackers may easily join the network with a huge number of nodes, gaining control of the bulk of the system’s nodes. This would enable them to simply seize control of the system.
But, once again, a trust-based system shines with a simple solution to this difficulty.
We stated in The attraction of trust that we need a system that includes as many trustworthy people as possible from a variety of backgrounds. If this is achieved, there should be trusted operators for each user in the system and we simply need to create a link between users and their trusted operators. Since only the users know who they trust, they are the only ones who can create this link by choosing their trusted operators.
In a trust-based system, users must be able to choose their trusted operators, just as easily as one can subscribe to or follow other people on social media sites (such as Twitter, YouTube, Instagram, and so on). Of course, users can change some or all of their trusted operators at any time.
This concept is a very special form of democracy, as it is not the majority of votes that determines who has the power over the system, but each user himself appoints his own representatives. This is in direct contrast to a representative democracy, where there is always a share of the population that has to live with the decisions of leaders in the country that they did not elect. Or leaders who lose a lot of voters during their term in office because they don’t act on their election promises (and may even blatantly pursue a different agenda), but are still allowed to govern for the rest of their term. As a result, the best type of democracy is one in which everyone may pick for themselves at any time which operators they trust and wish to be represented by.
This is in stark contrast to blockchain technology, where the transaction inclusion into blocks through miners/block proposers is actually a very rapidly rotating dictatorship.
The capacity for users to individually select their trusted operators to represent their interests gives the system the power of true democracy.
Of course, this does not mean that operators have full access to the funds and assets entrusted to them. The most they could do to a user is expose all of the user’s assets. However, users are not required to give their identities to them. Thus, the worst thing that could happen would be a comparable transparency as is already the default with Bitcoin and Ethereum.
So in conclusion, the trust issue can be solved by employing the following two basic principles:
- The system must be operated by a diverse group of trustworthy individuals, organisations, and businesses.
- Users must be able to freely select their trusted operators.
With these two simple concepts as a consensus mechanism, all the problems of blockchain-based systems can be solved at once. (Strictly speaking, this concept does not require consensus in the system, which we will discuss in more detail in the next section.)
It is critical to understand that this concept does not replace any of the existing blockchain technologies’ security features with trust, but rather that only the minimum amount of trust, which is also required from users in blockchain-based systems, is distributed more meaningfully in a DLT system with these two concepts.
By allowing users to select their own trusted operators, users’ faith in the system is greatly increased. If a user does not wish to trust anyone, he can simply join the system as an (anonymous) operator and select himself as his trusted operator. So, properly speaking, a user can actually eliminate the dependency on trusted third parties almost completely, something blockchain-based solutions cannot do.
Let’s compare Satoshi’s approach to the trust problem (which we’ve described in Understanding the root problem) with our own:
| Satoshi’s approach | Our approach | |
|---|---|---|
| Cause | Financial institutions abuse the trust of people | |
| Inter-pretation | Trust is bad | Non-trustworthy behaviour of operators is bad |
| Solution approach | Eliminate trust | Maximise trust |
| Imple-mentation | Replace trust with technology (cryptography, blockchain, decentralisation, etc.) | Replace untrustworthy operators with trustworthy operators and give users the choice in whom to trust |