Crypto services undermine traditional forms of governance because its users are anonymous. This assumes impunity from government and central authorities. The collective consensus of crypto coders, miners, and anonymous micro actors in a growing subculture. To date, crypto has been relatively untouched by the authorities of the “real-world” and raises important questions on about how this space should be regulated. Techno-Libertarians envision utopian self-regulation, with codified rules that evolve with its technology. Crypto-anarchists envision a free-rule zone for autonomous businesses and unconstrained virtual currencies. Anyone who denies these programmatic rules essentially forfeits their right to participate.
In this second section, the crypto power hierarchy will be defined as a basis for understanding its governance in contrast to the real world.
Understanding crypto requires an analysis of the equation and makes these platforms happen. Modern systems are run by a combination of people, process, and technology: whether it be in government, companies, or our personal lives. Technology is foundational to enabling systems to function and grow efficiently.
Every industry requires rules and procedures that allow humans to collectively utilize resources in the most efficient way possible. In the System Essentials equation, this resides in Process. For example, a person may use software to develop a new car engine. But that goal requires a project plan, timeline, and the coordination of many individuals to achieve this goal. Harmony is achieved when People bring innovation and Technology is an effective instrument. The process is then used to scale the solution. The process is also used to govern the system in question, with the help of technology.
“People add vulnerability to a system
by their mere presence.”
In the blockchain, it is generally agreed that the combination of Process and Technology establishes programmatic self-governance. Blockchain rules are implemented in code, for the system to be self-sustaining.
Smart Contracts is a blockchain application where terms are agreed and written in code. Settling contracts are programmatic, eliminating the need for a human arbitrator. In this example process and technology work in harmony to settle contracts, removing the subjectiveness of people.
The self-governing autonomy of blockchain breaks down when people are involved. Humans are the strongest and weakest links of the Systems Essentials equation. People leave vulnerabilities in code, intentionally or not, for others to exploit. For example, a system can have the best security in the world, but clever social engineering techniques such as, “I am the new admin, please send me your password”, has led to massive security breaches[i]. The bottom line is that throughout blockchain’s first decade, code-based governance has not been sufficient to protect the crypto ecosystem and its users. The crypto community can learn a few things from the banks they are trying to topple. Understanding the weakest links in the System Essentials equation helps to systematically mitigate vulnerabilities.
▲ Down the Crypto Rabbit Hole
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About the Author
Gabriel is the co-Founder and General Manager at Adel Ecosystem Ltd. He is a seasoned sales and marketing expert with over 25 years in senior positions at Motorola, VeriSign (acquired by Symantec in 2010), and SecureWorks (acquired by Dell in 2011), and Cognitive Security (acquired by Cisco in 2013). He is a blockchain entrepreneur, with strengths in international business strategy. Gabriel has a bachelor’s degree in Engineering Physics from McMaster University in Canada and expert knowledge in blockchain incubation, cloud computing, IT security, and video streaming, and Over the Top Content (OTT). Gabriel also runs his own company, Euro Tech Startups s.r.o, creator of MyKoddi, and manages a professional blog.
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[i] “Meet Six of the Most Effective Social Engineering Techniques” (Mitnick Security, https://www.mitnicksecurity.com/site/news_item/meet-six-of-the-most-effective-social-engineering-techniques)