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Santi Siri on Upgrading Democracy with Crypto Networks
Jun 3rd, 2019

About this Episode
Today's episode features a conversation between Santi Siri - Founder of Democracy Earth Foundation, the Y Combinator-backed non-profit enabling token-based community participation - and Patrick Stanley, Blockstack's Head of Growth.

Together, they explore the concept of democracy, the decline of nation-states, and the potential of open-source protocols and crypto networks to enable free, sovereign, and incorruptible governance.
Show Notes
  • 00:42 Patrick tells the story of how he and Santi met in San Francisco through Balaji Srinivasan.
  • 02:19 Patrick: "For the folks who don't know you: who are you and what have you been working on?"
  • 02:24 Santi: "For the last six years or so I've been implementing new kinds of democratic experiments... which led to the formation of The Democracy Earth Foundation where we explore this intersection of using blockchain based networks to deploy democracy over the Internet."
  • 04:03 Patrick: "Can you unpack your tweet: 'The Internet is not compatible with the nation state?'"
  • 05:40 Santi: "If not even the US is protected from foreign influence meddling with domestic affairs, then the nation state is no more. We have to acknowledge the fact that we live in the Age of Information."
  • 06:05 Patrick: "Presuming that's correct, what's next then?"
  • 06:13 Santi: "I think it's the most interesting moment in time to be working on software."
  • 06:55 Santi: "Democracy is simply an idea that can be extremely helpful when you really need it the most: when you face disagreements as a society or organization."
  • 07:25 Patrick: "Where do you believe democracy should be applied in the context of deep disagreements in the crypto protocol space?"
  • 07:36 Santi: "It is challenging in crypto because it's an environment where creating an identity is extremely, extremely cheap."
  • 08:11 Santi: "Most of the governance happening in crypto today is fundamentally proof of stake or coin voting. For private endeavors, it works very well - it's like shareholder voting. Often less than 1% has over 50% of the vote."
  • 08:38 Patrick: "Something about that sounds wrong, doesn't it?"
  • 08:41 Santi: "Governance is tricky because it's not just the elite that understands how the system works. There are other constituents that are the people impacted by an economy. Not everyone is an economist, but everyone is impacted by the decisions they make about the economy."
  • 9:00 Santi: "So if you don't want to have an elite running a society and you really want a society where everyone's input is considered, democracy becomes very useful. The challenge is not just reaching the best decision in a collective way, but reaching a legitimate decision - one that the greater constituency supports, and not just a powerful minority."
  • 9:58 Patrick: "You've been working on quadratic voting. Can you tell folks what this is and what hopes you have for it?"
  • 10:10 Santi: "Quadratic voting is an idea that comes from the Microsoft researcher and founder of the RadicalxChange movement, Glen Weyl..." - https://radicalxchange.org/
  • 10:27 Santi: "The idea is you can vote on any issue and every voter gets the same amount of credits, but the more votes you put on a specific issue, it will cost you an exponential amount."
  • 10:58 Santi: "If you really care for one issue, the opportunity cost will be really high for not supporting other issues."
  • 11:11 Santi: "This leads to this outcome where the winning option is something that is the preference of the community, but also - because of this interesting quality of square roots - it's also an option that has the greatest support among the quantity of voters."
  • 11:29 Patrick: "The one catch there that I'm thinking of is Sybil attacks... how do you stop those?"
  • 11:50 Santi: "We're actually researching using quadratic voting to validate identities themselves."
  • 12:32 Santi: "The two requirements of quadratic voting (qv) is that you need to have a strong consensus and identities participating. This is a requirement of any democratic system. And then you have a Universal Basic Income mechanism of some kind."
  • 12:54 Patrick: "You mentioned previously a fear of becoming Facebook in the process of solving this problem. What's the concern there?"
  • 13:21 Santi: "Facebook became a relevant attack vector for legacy democracies because they've become the largest identity registry in the world."
  • 13:36 Santi: "There are two ways to subvert democracy: one is control the identity registry of voters and the other one is gossip - false information that confuses the voters."
  • 13:53 Santi: "If we're going to do any kind of formalization of identity... to help people trust that there's a human behind an address and that that human doesn't hold the keys to any other address within a consensus... we should do it in a way that prevents the formation of a monopoly."
  • 14:20 Santi: "If you end up having a monopoly like Facebook or the People's Republic of China, then you have this Orwellian situation that works against the interests of democracy: free speech, the right to legitimate information...."
  • 14:40 Santi: "The challenge is how do you have a marketplace that does not allow for the formation of monopolies?"
  • 15:29 Santi: "We've been very lucky at Democracy Earth to do the first quadratic voting implementation for the state of Colorado."
  • 15:58 Santi: "It's an incredible precedent. The first official quadratic voting round under the US government."
  • 16:15 Patrick: "Do you feel online voting has more or fewer attack vectors than traditional voting?"
  • 16:46 Santi: "Where there are deep disagreements, the stakes are high, and where the stakes are very high, attacks will happen."
  • 17:21 Santi: "In traditional democracies, I think the best recommendation I've seen is actually from the German Supreme Court in 2009 where they argued... that hybrid models are ultimately best."
  • 17:47 Santi: "The idea of paper is important because in large populations there are still not 100% digital natives. ... Our parents and elders are really digital migrants and we need to respect that reality."
  • 18:12 Santi: "Democracy, at the end of the day, is always a work in progress.... It's really an ideology about how we make decisions."
  • 18:47 Santi: "We cannot surrender this battle in the world of crypto."
  • 18:56 Santi: "If this is the new world that we're creating... a new kind of plutocracy or oligarchy... we deserve better... and we should be daring to think about what democracy means in all of these contexts."
  • 19:12 Santi: "We can really make something better that what the nation state has given us."
  • 19:17 Patrick: "What are you excited about and see as worth pursuing in the next 20 or so years?"
  • 19:48 Santi: "The rise of nations and the idea of nationality was a consequence of information technology. The printing press allowed for people to start writing and publishing books not in the language of power - that was Latin - but in their vernacular local languages....that gave this sense of being part of a large imagined community through literature."
  • 20:23 Santi: "With crypto I think we're witnessing a similar phenomenon. In the rise of maximalism and these new protocols are a kind of nationalism."
  • 20:32 Santi: "It's very clear these are nations founded not in a common language, but actually in a common ideology. If you're an Austrian economics money fetishist, you'll be a Bitcoiner."
  • 21:22 Santi: "We troll each other too much, but we're really good, nice idealists."
  • 21:35 Patrick: "The great thing about Twitter is you can lose your mind in public."
  • 21:50 Santi: "The revolution of our generation is in crypto."
  • 22:01 Patrick: "I would classify Bitcoiners as probably more libertarian, conservative leaning, less likely to be liberal - not to say there aren't any liberals in Bitcoin - and very much in the Hayek/Austrian school of economic thinking."
  • 22:38 Patrick: "It does feel like people are splitting up into their own ideologies, but it still does feel like it's very early on and we're kind of in the Germanic nation state building era."
  • 22:51 Santi: "We're discovering where the boundaries and new geographies and frontiers are. But there are frontiers and maximalism as nationalism is a very real thing."
  • 23:06 Patrick: "Definitely. And I also think there will be fights and violence and - at a minimum - cyber warfare and meme warfare and potentially physical warfare between protocols. There's a lot at stake - especially over a long enough timeline, if these things accrue value."
  • 23:33 Patrick: "Crypto is inherently political."
  • 24:10 Santi: "I recently was with an expert on military defense and strategy and the way they approach the idea of how the world is at right now around in terms of cyber attacks and this whole new ground of the battlefield is that we're not in war or peace, but a world of un-peace. Everyone has to assume they've already been attacked."
  • 25:10 Santi: "In China, you have to use a VPN. It's interesting. ... being there really pushes you to think about how you're being observed."
  • 25:38 Patrick: "What changed in your mind about China visiting recently?"
  • 25:43 Santi: "It's the one place where Communism took over and won and it's been the highest growth country on the whole planet for the last three to four decades."
  • 26:08 Santi: "It turns out the Communist elites are the best administrators of modern capitalism."
  • 26:23 Santi: "You feel the authoritarian state everywhere. You see cameras everywhere."
  • 26:46 Santi: "There are some things about the transformation of China that you can really see being there. Of course, they are the worst about free speech - you have to access the Internet through a VPN. But on climate change, the silence coming from every single motor [being electric] in Beijing is really mind blowing."
  • 27:31 Santi: "Communism was this terrible thing in the 20th Century. I watched the horror of Venezuela very closely and went to Cuba for a month when I was very young and it was a heartbreaking environment. It really was a big failure."
  • 27:45 Santi: "But the Chinese experiment - at the same time - had this tremendous potential of bringing 300 - 400 million people into the life of the middle class."
  • 27:58 Santi: "I come from a developing nation and I scratch my head how we can deal with 30% of the people in my country that are below the poverty line."
  • 28:19 Santi: "There are a lot of things going wrong [in China] - I mean they're persecuting Muslims... that's why we need the Internet."
  • 28:32 Santi: "For Democracy Earth, I think there's no bigger, killer use case than a Chinese democracy."
  • 28:43 Patrick: "What do you think China got right that Cuba got wrong?"
  • 28:46 Santi: "Deng Xiaoping allowing private property and capitalism."
  • 29:12 Santi: "It is the labor of the world - the proletariat of the world. All of our iPhones, all of our computers, all of our chips...."
  • 29:35 Santi: "In this age where we do perceive rising inequality, we do perceive the advance of automation. ... I don't think we should be so afraid of these ideas."
  • 30:15 Santi: "All of the revolutions that happened in the 20th century happened in poor countries."
  • 30:47 Santi: "People are talking about taxing AIs and robots - that's kind of what Marx was talking about."
  • 31:02 Santi: "I don't believe much in revolutions because they all have this original sin of violence and I think we have much better tools than guns."
  • 31:26 Santi: "We can definitely use computers to create better societies."
  • 31:34 Patrick: "If some democracy is good, is absolute democracy better? And how do you avoid the Kyklos?"
  • 32:46 Patrick: "It's democracy, aristocracy, and monarchy. And the three degenerate forms of these are ochlocracy, oligarchy, and tyranny."
  • 33:08 Santi: "These thinkers are trying to find the gears of history, which are very hard to find. But if they are somewhere, I think it's looking through the lens information and information theory."
  • 33:27 Santi: "I don't like absolutist ideas in politics. We need to use different tools for different means. It's evident that private endeavors and companies are much better governed by dictators - some people call them CEOs."
  • 34:04 Santi: "What I'm reading a lot lately is 'An Introduction to the Theory of Mechanism Design' by Tobin Borgers."
  • 34:43 Santi: "I began my career as a video game developer and today I find myself reading a lot about game theory as it applies to the context of crypto."
  • 35:10 Patrick: "Any other recommendations for books about game theory?"
  • 35:24 Santi: "George Gilder's 'Knowledge and Power' which applies an information theory lens to understand capitalism."
  • 35:46 Patrick: "There's probably a lot of listeners trying to learn more about how democracy can work online and what are the hard problems being solved... what would you recommend checking out?"
  • 36:04 Santi: "I feel compelled to recommend the work we've been doing at Democracy Earth at democracy.earth and @democracyearth on Twitter."
  • 36:43 Santi: "Everyone I talk to is very confused about things right now."
  • 36:50 Patrick: "What do you mean?"
  • 37:16 Santi: "We lost our compass in terms of what's democracy in modern day America - in the civilization we're creating. So we're all in a state of confusion."
  • 37:31 Patrick: "Any other books or blog posts you'd recommend to listeners on democracy?"
  • 37:37 Santi: "Hélène Landemore's 'Democratic Reason'"
  • 38:07 Goodbyes.
  • 38:19 Credits.
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About Our Guest
Founder of Democracy Earth Foundation, a Y Combinator backed non-profit building incorruptible digital governance technology; and Partido de la Red (Peers Party), first digital political party that ran for elections with candidates committed to people's will online. Partner of Bitex.la, leading bitcoin exchange in South America. Member of the World Economic Forum since 2012. Author of "Hacktivismo", published in 2015 by Random House.
    • Santiago Siri