The Taipei Blockchain Week is currently underway. Unlike the discussions in Hong Kong Blockchain which are limited to finance and included in the FinTech Week, Taiwan's blockchain events also delve into democracy, autonomy, public goods, and other issues. They host forums like Funding The Commons and DAO Taipei, which are unheard of in Hong Kong.
Regrettably, after attending the inaugural NFT Taipei forum discussing "How to Create Digital Democracy through Blockchain?", I had to return to Hong Kong for a self-media summit and missed all subsequent activities of the Blockchain Week. However, we faced suppression, even when it’s just about meeting friends and discussing common civil society topics such as fact-checking, cybersecurity, fundraising, and AI's impact on journalism. Our venue reservations were canceled twice, forcing the event to go online, continuing the “social distancing measures”. Ironically, at the same time, the government was urging citizens to care about their community and doubled the funding to promote the district council elections held on the same weekend as the summit. Yet, the voter turnout dropped from 71.23% in 2019 to a historic low of 27.54%. The reasons behind this are indeed an open secret.
Though I physically missed the Taipei Blockchain Week, I believe I can still participate in a 'proposition essay' manner, briefly discussing 'How to Create Digital Democracy through Blockchain'. This way, I can respond to the host's questions more publicly, and take the opportunity to clarify points I hadn't expressed clearly on site.
What is digital democracy?
I understand digital democracy from two aspects.
Firstly, any use of digital technology to improve democracy, such as increasing efficiency and enhancing transparency, is considered as digital democracy. A prime example is the recent district council elections in Hong Kong, where electronic electoral rolls were used for ballot distribution. (While the electronic electoral roll system failure is a separate issue to think about...) Additionally, offering electronic voting options would also be a form of digital democracy, as it could enable participation from those who are immobile or unable to return to Hong Kong, utilizing information technology to enhance public participation. However, this is purely an example of imagination and not an encouragement for the Hong Kong government to do so. Even the basic electoral rolls, handling the historically lowest voter turnout, had issues. Electronic voting involves considerations of security and privacy, and it's advisable for the government not to venture into it.
Starting with something simple, even distributing electronic versions of candidate manifestos via email counts as digital democracy. Don't underestimate these arrangements due to their low technicality. Like many, I too have recycled paper manifestos upon receiving. Electronic manifestos not only aid in environmental conservation but also greatly facilitate historical documentation and easy retrieval of candidates' past promises. If structured data can be incorporated during production, it would further lay a foundation for programmatic or AI analysis and organization.
The above discusses the use of digital technology to improve democracy in the physical world. The other aspect of digital democracy is practicing democracy in the digital world. Both aspects are equally important and complement each other. However, the latter has always been my primary concern and is the main focus of this article.
How to create digital democracy?
Whenever we see the word "democracy", the verbs usually associated with it are "promote" or "strive (for)", rather than "create". The question "How to create digital democracy through blockchain?" perfectly reflects that the Blockchain Week and Taiwan as a whole are at the forefront of digital democracy in the world.
The three verbs represent three paths to achieving democracy. Communicating with those in power and pushing for democracy in parliament is typical of insiders; media monitoring, civic engagement, street protests, and even more intense methods like demonstrations and hunger strikes for democracy are typical of outsiders. In the past, joining the establishment as an official or legislator and participating in civil society outside the establishment encapsulated the path to democracy. Those aspiring to achieve democracy post-graduation either became legislative assistants or ran for office, or joined NGOs concerned with various issues. Some rose to become party chairpersons, some were imprisoned, and others were forced into exile or even became wanted fugitives… and a range of aftermath we cannot now tell.
However, the development of technology has gradually given birth to a third path: creating democracy in the digital world. The reason for using the diction "create" is not only because it's something new, but also because unlike promoting or striving for democracy in the physical world, democracy in the digital world doesn’t need permission, it’s permissionless. For instance, creating a Facebook group concerned with climate change, inviting members from around the world, and implementing democratic governance like electing moderators, all don't require government permission.
Yet, if tomorrow Facebook succumbs to government pressure and takes down individual pages, or if the Hong Kong government legislates to control "online associations" and swiftly passes it in the legislature, I wouldn’t be surprised. The scope of the law is dynamic; some regimes always want more control, but at the same time, information technology continues to create new possibilities, with the internet birthing a whole parallel world. The Facebook group example, unimaginable twenty years ago, is now just an old tactic, achievable with a few clicks. To create democracy, one must be a beyonder, staying ahead of the system, starting in the gap where governance has not yet reached in the realm of new possibilities created by information technology.
Some say that since humans have physical needs like food and shelter, democracy must be rooted in the physical world. Of course, I won't deny humanity's basic needs, but unless we only exist at the physical level, there's always a higher level of life. In terms of time, excluding sleep, I spend more time online than wandering around and interacting with people. In the past, this might have been seen as a behavior of a homebody, but nowadays, when I look out the window on the bus, I see people of all ages more engrossed in their phone screens than me. In fact, the term "going online" is completely outdated. Modern people live both in the physical and digital worlds; the internet is a parallel world where any activity that can be carried by data can be realized. This year’s media summit is the best demonstration; the regime can pressure venues to cancel events, but it's difficult to hinder online discussions.
Admittedly, some things ultimately need to be realized at the physical level, like solving climate change requires cooperation from national governments. But before connecting with the physical world, there's still a lot of space in the digital world to practice democracy. After all, democracy isn't just voting every four years and then waiting for enlightened governance; it's more about citizen discussion and participation. Holding the media summit online might seem like a passive result of suppression, but I prefer to see it positively: it’s an opportunity to break through physical limitations, allowing more people to participate, making discussions more efficient, and data organization simpler. It’s a pity not to be able to meet in person, but the democratic component of the event has not diminished in the slightest.
What is the relationship between blockchain and creating digital democracy?
Let’s start from the fundamental concept.
The internet has liberated data, allowing people to receive and broadcast information globally. Blockchain goes a step further by liberating assets, enabling individuals to own assets directly without relying solely on state systems. People can trade directly with others worldwide and even issue their own tokens. When asset exchange becomes possible, many scenarios that previously had to be realized in the physical world or through traditional financial institutions can now be fully realized in the digital world, significantly expanding the scope of digital life.
Continuing with the climate change concern group as an example, if the community needs to raise funds for public education or events, it usually involves traditional systems. They might choose to register as an organization in a country or use an individual member's bank account to manage funds, both of which are either complex and immediately regulated or simple but fraught with tax and trust issues. However, with blockchain, cryptocurrencies, and smart contracts, the concern group only needs to select a few representatives to register a multisignature wallet on services like Gnosis Safe. In five minutes, they can have a community-authorized wallet for receiving and sending various cryptocurrencies.
Multisignature wallets have been used in web3 communities for years. Although they are not widely known outside these circles, I believe it’s a necessary path of development, just like how few people were creating Facebook pages a decade ago. As blockchain becomes more widespread, multisignature wallets will naturally become more commonly used. Traditional processes like registering an organization and opening a bank account are not only costly but also time-consuming, often taking months, and can be indefinitely delayed if suppressed. With the internet, processes like domain registration and applying for community accounts can be completed in an instant. With blockchain, setting up a wallet or even a multisignature wallet takes just a few minutes and importantly, does not require permission from any department.
This is just the beginning of creating digital democracy. Digital assets can either have their own value system like Bitcoin, be used as a stablecoin pegged to fiat currency, or open up a broader imagination space, such as for voting. If we can find a way to carry out the entire governance process from discussion, proposal, voting, record-keeping, to execution online, independent of any traditional system, then governance, along with data and assets, can be liberated from the physical world. This is the vision of a DAO, a decentralized autonomous organization.
Wang Liying, 👻, Zhang Baocheng, Jian Xinchang
What challenges does digital democracy face?
I used the word "vision" because, unlike digital data that is fully mature and digital assets that have proven themselves and only await widespread adoption, digital governance is relatively in an exploratory stage. Even the definition of a DAO (Decentralized Autonomous Organization) has various interpretations and is not uniformly agreed upon. For the sake of discussion, let’s understand it this way: Traditional organizations register with state governments. If they don't trust one country's legal framework, they might register in another country, often Switzerland for its neutrality. DAOs, on the other hand, go further by "registering" on the blockchain, without the need for approval.
Some DAOs, focusing on inherently digital issues, have a natural advantage and have progressed further. They can handle most resolutions through digital democracy, seeking consensus and execution. For instance, LikeCoin DAO has dealt with 77 proposals since 2019, where software updates, parameter changes, community funding, etc., are all executed automatically by blockchain programs upon proposal approval, exemplifying on-chain governance. For the few matters that need to interface with the physical world, they are executed by members authorized by the proposals, who then report back to the community. However, overall, the implementation of digital democracy still faces many unresolved issues.
Blockchain's immutability and transparency are beneficial for preserving an organization's data and assets, offering unprecedented transparency, making it a friend of digital democracy. However, this is also a double-edged sword, creating serious privacy issues. When used for voting, it publicizes everyone's votes and leads to the effect of voting while revealing the count, influencing individual decisions. This issue is expected to be gradually resolved as the research on "zero-knowledge proofs" matures.
A more severe and challenging issue is how to define and confirm identity. Physical world democracy generally bases on one person, one vote. But in the digital world, accounts and wallets can be easily multiplied. In some scenarios, this is a feature, but it can lead to one person masquerading as multiple voters in voting, known as a "Sybil attack." Therefore, most current DAOs use governance tokens or NFTs, making voting rights proportional to the tokens held, resembling a shareholder company model. While this can reflect democracy to a certain extent, it can also lead to the problem of being dominated by the wealthy. To solve this "million-dollar question," several directions can be explored, such as introducing quadratic voting, which narrows the gap in voting power to a square root. Gitcoin Passport tries to define a person based on activities in both web2 and web3; having accounts or wallets doesn't automatically grant voting rights, but requires a certain amount of usage in various services first. Additionally, Worldcoin offers economic incentives, encouraging everyone to scan their unique irises to obtain a World ID, proving they are natural persons. If this infrastructure can be successfully built, World ID could one day be used as a credential for voting rights.
Finally, digital democracy faces challenges from systemic regulation and suppression. Ideally, digital democracy isn’t in direct conflict with traditional systems; rather, it’s a parallel relationship that complements the shortcomings of the physical world and even acts as a vanguard in some aspects, serving as a sandbox for testing. However, regimes may not always accept this goodwill. As soon as they realize the direction of technology and understand that there is a force not entirely under their control, whether it's the United States or authoritarian states, they become uneasy, attempting to bring it under regulation or even suppress it entirely. What beyonder can do is to stay ahead of the system and tirelessly educate the public, encouraging more people to participate in digital democracy, moving towards the shore of freedom.
P.S. I never thought I would become a person with a vote who chooses not to vote.
Extended Reading
"The Sociology of Blockchain: Reimagining Money, Media, and Democracy"
Insiders, Outsiders, and Beyonders in Pursuit of Valued Words
Eight Key Features to Test the "Purity" of Various DAOs in the Market
DHK dao: Decentralized Autonomous Organization Entering the Public Sphere
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