Vitalik Buterin, the co-founder of Ethereum Foundation and Bitcoin magazine is a Russian-Canadian programmer and writer. On Monday, Vitalik along with Microsoft researcher Glen Weyl and Ph.D. of economics at Harvard, Zoë Hitzig, shared on a new paper that there are free-riders in the crypto currency ecosystem.
These free-riders, as described in the paper, are people or businesses that profit from the under-provision of public goods. And, “the more people [these public goods] benefit the more they will be under-provided.” It is an issue that is not just limited to the crypto world, however, the authors are initially focused on how the idea creates harmful incentives for the funding of blockchain projects.
It is ironic that the crypto development teams rely largely on donations from crypto players showing a disinterested and selfless concern of their creators. The paper along with displaying the concern also has a new financing method to support a “self-organizing ecosystem of public goods.”
The method described – a system written in code – seeks to allow groups to allocate funds for the maintenance of public goods and services without becoming vulnerable to the “free-rider” problem. The method titled “Liberal Radicalism: Formal Rules for a Society Neutral among Communities,” The concept seeks ideas from Quadratic Voting to a funding mechanism for domestic community formation. Quadratic Voting allows participants to vote with crypto tokens according to how much they care about an issue.
The funding of the project totally depending on the number of participants and their nature of concern that they how much they are willing to look into resolving the issue. The paper from Vitalik states, “Individuals make public goods’ contributions to projects of value to them. The amount received by the project is proportional to the square of the sum of the square roots of contributions received.”
“Liberalism is a political and moral philosophy based on liberty and equality,” which is the underlying idea of The Enlightenment era, the authors conclude the trend as “an anti-authoritarian commitment to neutrality across ways of living and valuing.”
Hitzig, one of the co-author, is a poet and an economist that was drawn to the idea of Quadratic Voting. Hitzig said on the above idea, “the crisis of modern liberalism” stems from an “unhappy marriage” of capitalism and democracy that “produces frictions that make it highly inflexible, inefficient and actually fundamentally illiberal.” He further continued “These tensions are increasingly manifesting in discontent with existing liberal democratic systems and the rise of authoritarian populist alternatives on both the left and right.”
According to Hitzig, there’s further work to be done to make the technology usable to a wide number of people — potentially working with artists and designers who can describe the method in different ways.
All of the above, taking a high road, Hitzig said, even though the paper seems raw, by publishing it, we would be able to plant the idea that we have created and will propel others to think about it.
“Nothing would thrill us more than to see other collaborations that pose original, alternative visions for solving what we see as the crisis of liberal order,” said Hitzig.