Distributed Anonymous Government - A Fourth Stage in Peer to Peer Technologies?

Consider this progression in technologies:

Stage One: BitTorrent is a distributed anonymous communication system. It proved itself in the minds of many as an idea by making all information, as well as entertainment, available to those who wanted it, if those who had it wanted to share. BitTorrent's success was largely founded on the widespread availability of high speed, always-on networking - witness the multitude of how-to guides and videos about maximizing your BitTorrent connection speeds, especially early on in the growth of use of the protocol.

BitTorrent's free, open source underpinnings meant it could not be easily stamped out. It was first ignored, then fought, then acknowledged as an inevitable force by media corporations who now themselves use the protocol for its advantages in content delivery.

Stage Two: Bitcoin is a distributed anonymous currency system. It proved itself as an idea by allowing easy and secure global transfers of wealth, while resisting efforts to destroy the perceived value of the blockchain. Although not sharing code with BitTorrent, it did share peer to peer networking ideas, and ideals of openness.

The Rise of the Distributed Anonymous Corporation

Stage Three: More recently, as Bitcoin's model has been proven useful enough to spawn numerous clones and experimental attempts at improving its protocol, concepts such as peer-to-peer anonymous trading systems relying on TOR - Decentralized Anonymous Marketplace (DAM) and peer-to-peer structured investments - Distributed Anonymous Corporations (DAC) have appeared. These DAC systems may operate on similar models of "trust-less trust" and openness as the first two stages, as well as near identical technical underpinnings. DAC... or "corp"? Sounds familiar...in any case, our word comes from a Latin root meaning "body".

The distributed anonymous corporation can keep public records of its meetings, has a transaction history, and even a company coin. In keeping with historical precedent, the corp probably operates a company store, too - but unlike back in the glory days of company towns, the DAC is distributed. They can't force anyone to shop at their store - it just might be advantageous. In fact, many cryptocurrencies do already operate in a similar fashion to corporations, by necessity - hiring developers, maintaining various public functions and so forth. And of course that old stand-by, T-shirt sales. However most of those functions are performed outside the blockchain, again by necessity.

One issue with making so many additions to the original purpose of the Bitcoin technology (commonly referred to as "stuffing things into the blockchain"), is that many desirable features require centralization and trust in a single individual or organization ("party"). This applies doubly for ideas such as ProtoShares, where the entire value of the instrument is predicated on future ventures to be launched by the controlling organization - this would be similar to investing in a company with no product or monetization plan. It may well turn out that contenders in the DAC market will need to conform to strict best practices and endure a period of low investment prior to showing real results.

Systems of Distributed Anonymous Government

Stage Four: I propose that another concept, Distributed Anonymous Governments (DAG) will eventually appear, in order to protect the interests of the corps and their members. A government for the purposes of this idea can be thought of as a corporation with a remarkably diverse shareholder base and the primary purpose of guaranteeing their ... well, whatever the government decides to do based on its noisiest and most powerful constituents, in practice. Which brings us to one of the first interesting points about taking government virtual:

The distributed anonymous government is by nature voluntary, and therefore participation in it must be useful. Else it will cease to exist with the proverbial quickness. No threat of imminent bodily harm can be used to coerce participation in the schemes and machinations of the DAG. At least, until roving bands of mercenaries with tablet computers begin to enforce its provisions. Oversight is already built into the Bitcoin protocol via multisignature transactions, and can provide a mechanism for jury and court systems, even very large juries.

The distributed anonymous government will save a lot of money on real estate. No more lines at benefit offices, and no spending on roads. Instead, the distributed anonymous government's budget in meatspace will mostly revolve around computing hardware and payroll costs, while its citizens will tend to favor investment in high speed internet systems, in traditional politics. It would be easy to imagine pork barrel projects being added to a DAG's budget eventually, but that's where the next part of the process comes into play. Pork will have to earn its place - and then it wouldn't be pork, would it?

The distributed anonymous government's taxes, expenses, currency issuance, and election records will be public, and totally malleable given a consensus of constituents. Instead of voting with your dollars or your feet (gosh, remember when there were other ways to vote for most of us?), you can vote with your fork - by running a different version of the DAG's software. True direct democracy will be not only possible and efficient, but actually necessary for functioning. As a result, only popular policies will be implemented (for long!). This will produce an interesting dichotomy in some geographical nation-states where the tyranny of the few is contrasted with the tyranny of the majority in a DAG. Many may prefer the latter if given an option.

Of course, with current  blockchain models, one's personal democracy in the DAG would be direct in relation to hashpower. There are obviously some fine details left to work out in that aspect. One is reminded of A. Solzhenitsyn's descriptions of the Soviet elite's holiday dachas, better grocery stores, etc. Technology updates such as the SCRYPT algorithm and even more restrictive mining algorithms such as Sifcoin's CPU-only mining, are intended to mitigate this problem by keeping participation accessible to the masses without special hardware, although hordes of VPS systems can still tackle CPU mining to great effect - anyone can rent a VPS to do this.

This idea of a distributed anonymous government, or more generally "how would an internet government function?" has been percolating in my mind for some time, and it occured to me more recently that the blockchain will be the place it happens. Comments about why this is the best idea ever, totally impossible, already in fact happening, or a just plain terrible idea are welcome.  

This article was originally published by the author on the Wall Street Crypto blog (http://www.wallstreetcrypto.com/2013/12/distributed-anonymous-government-fourth.html).