Blockchain Cryptography and the Commons

Discussion

(with FairCoin project in mind)

Sam Dallyn, Fabian Frenzel:

"In De Angelis’ (2017a:241) analytical framework for studying commons, “boundary commoning” refers to interconnections and scaling by forging links or bringing in other collectives from different sites, which is itself a process of reconfiguring boundaries. Blockchain and peer2peer technologies are relevant here as they are devices that may facilitate commons scaling (see for example Bollier 2015; Gerhardt 2020; O’Dwyer 2015). Since its creation in 2009, Bitcoin and its blockchain cryptography have served as an important staging post for debates around the role of money in society (Dodd 2018; Du Pont 2019; Swartz 2018). The often repeated celebratory narrative propounded by a certain species of economic libertarian (usually a white, male and heterosexual one) attracted to Bitcoin (Du Pont 2019) is that the blockchain removes the need for third party intermediaries in systems of payment and can thus disintermediate transactions (Dodd 2018:50), thereby bypassing central authorities and banks. The blockchain can be described as a “shared ledger”, a shared record of transactions and essentially a “chain” of “blocks” (Swartz 2017:83). In Bitcoin cryptography these blocks are added to through an energy intensive process known as mining in which computers compete to discover a hash code. The growth of Bitcoin in the last 10 years has been accompanied by disappointment and extensive critique amongst those who stress the potential of open source blockchain technologies to develop scalable peer2peer commons alternatives (De Filippi 2015; Kostakis and Giotitsas 2014; O’Dwyer 2014, 2015). Bitcoin instead has become a plaything for libertarian investors and free market ideologues (see Golumbia 2016). As De Filippi and Loveluck (2016:5) note, Bitcoin’s design principles present a “profoundly market-driven approach to social coordination”—through the overarching focus on incentivisation through self-interest (O’Dwyer 2015), and the development of an elite “aristocracy” of powerful miners and a handful of developers who make the key decisions around how the blockchain develops (Kostakis and Giotitsas 2014).

In characterising different cryptocurrency and blockchain communities, Swartz (2017, 2018) makes a helpful distinction between “digital metallists” and “infrastructural mutualists”. Digital metallists stress the benefits of Bitcoin as an asset underpinned by “trustless” cryptography, in being both limited in supply in a similar fashion to gold and enabling “autonomous market relations” (Swartz 2017; see also Maurer et al. 2013). Radical infrastructural mutualists, meanwhile, believe in the potential of the blockchain as an autonomous and decentralised infrastructure that can enable the “collaborative creation and distribution of value” between peers (Swartz 2017:86). One distinct group that have emerged here can be described as commons based digital mutualists, who see blockchain technology and peer2peer as something that can help to facilitate commons based around sharing and open source cooperation (Bauwens et al. 2019; Bollier 2015; De Filippi 2015; Pazaitis et al. 2017). O’Dwyer (2015) for example points to the potential of the blockchain to generate new forms of “commons based peer production”, while Bollier (2015) argues that “blockchain technology could help us build some refreshing, effective and socially progressive types of commons”. One subspecies of radical commons digital mutualists are postcapitalist digital mutualists, who explicitly seek to realise scalable alternatives to capitalism through peer2peer blockchain technologies (see Bauwens and Pazaitis 2019; Economic Space Agency 2020; FairCoop 2017b; Gerhardt 2020).

In terms of its underlying cryptography, FairCoin was designed to help facilitate this transition to postcapitalist futures through an alternative, collectivist and sustainable blockchain design. The key innovation here is that of Cooperatively Validated Nodes (CVNs), in which rather than competing—as is the case with Bitcoin mining—a collection of between 10 and 20 computers take it in turns to validate transactions every three minutes which is then signed off by the other CVNs in a “consensus algorithm” (König et al. 2018), a process in which the total number of coins is fixed. This leads to dramatically less energy consumption than Bitcoin in validating transactions, and consequently participants often refer to it as an “ecological blockchain” design (König et al. 2018).

In addition, there is a meshing of the technical, social and political in the manner in which CVNs are approved by monthly online FairCoop general assemblies. Those seeking to run CVNs put themselves forward, explain why they would like to contribute and outline their credentials, which must be supported by two other participants and then approved by consensus. The CVN is described in the FairCoin white paper as “a socio-technical sculpture” which is authorised through a “social p2p consensus mechanism” (König et al. 2018:7). One interview respondent, Vale, who had been heavily involved in activism in Barcelona and is now based in the UK, explained her motivation for running a CVN as follows: The main reason for joining the movement was the proof of cooperation blockchain because I thought that was really something … I’m quite good with technology so I set up SiQuoBern, SiQuoBern is a node in the blockchain, I set myself up to run a node in the FairCoin blockchain but of course in order to run a node you need to demonstrate you’re a good person.

A key appeal of the FairCoin blockchain is the potential it offers as an alternative, radical currency that can scale to multiple regions through peer2peer technology, and this aspect was continually stressed by different interview respondents. Thus, before exploring FairCoop’s insufficient boundaries in relation to capital, we expand on the opportunities FairCoin offered for expansive, trans-local FairCoop boundary commoning."

(https://onlinelibrary.wiley.com/doi/full/10.1111/anti.12705)