On-chain KYC is Coming

Neuron looked at the latest developments in blockchain research by two of the largest names in the industry. You won't believe what he discovered!

On-chain KYC is Coming

Universal Basic Income. Fair voting. Philanthropic fund matching that maximizes support for useful but underfunded projects. All great ideas, right? Dan Larimer of EOS, Vitalik Buterin of Ethereum Foundation and Glen E Weyl of Princeton University must truly be the most wonderful people, working for the benefit of the free people of Earth, transforming our society. Well, transforming they are, but in a very dangerous direction.

Let me explain.

  1. Universal Basic Income (UBI) on EOS
  2. Quadratic Voting (QV)
  3. Liberal Radicalism (LR)
  4. Conclusion: On-chain KYC is coming

Universal Basic Income (UBI) on EOS

UBI is a relatively new idea that instead of providing welfare and unemployment benefits to those who cannot be employed, taxpayers should instead pay a living minimum to both the non-working and working population. Basically, if you don't work and want to pursue art, research, or smoke weed every day, the government will pay you a bare minimum that should let you get some food and shelter and potentially dissuade you from crime. Unlike unemployment benefits, if you do decide to find a job though you won't lose this money - you'll get both the government paycheck and whatever your job or business pays you.

The idea recently became so popular that US presidential candidate Andrew Yang has UBI as part of his program. Yes, the same Andrew Yang that is into crypto.

No conflict of interest here!

In the crypto universe, the most active proponent of UBI is EOS's Dan Larimer. This video summarizes Dan's bullshit vision for UBI on EOS.

Most recently Block One, the company behind EOS (totally decentralized btw), has launched Voice - a twitter clone with built-in EOS token for content monetization (read: ad spending). Interestingly enough, the only way to get an account on Voice, a so-called decentralized social media, is to pass full KYC with Block.One.

Why would they need to do that? They say the answer is bots, but keep reading to find out the real reason.

Quadratic Voting (QV)

Political economist Glen E Weyl has been working on the economic theory for decision-making processes. How can various stakeholders, such as corporation's board of directors or members of parliament, make decisions that use the company's or state's resources more efficiently for the greater good and make sure that every voice is heard?

His answer is quadratic voting. The idea behind it is that the stronger you feel about an idea, the more you should pay to vote for it. Payment can be denominated in some sort of voting tokens that participants are given out and that they need to spend wisely on multiple votes. This way, underrepresented ideas get a larger chance to be heard, and it is supposedly economically sound (in theory, obviously, as all economic results are). Quadratic voting specifically removes power from one powerful/wealthy individual and spreads it across all voters. The powerful individual can still push his agenda - he'll just have to pay exponentially more for it, and the public will easily overwrite bad ideas.

Most recently, Vitalik Buterin has befriended Glen and together they're working on adopting Mr. Weyl's ideas to the blockchain world. In particular, the focus lies on governance of both blockchain foundations, such as the dysfunctional Ethereum Foundation, as well as on-chain DAOs. Let's ignore for a second that Mr. Weyl has a patent on quadratic voting and thus may at any point in time use the might of the United States enforcement system to demand royalties. He is clearly a good guy, nothing bad is going to happen, he says.

Ignoring the patent concern, which for a truly decentralized project is non-enforceable anyway, QV sounds like another great idea, right? Keep reading.

Liberal Radicalism (LR)

Most recently, the same duo of Vitalik and Glen has collaborated to bring us the following paper: Liberal Radicalism: A Flexible Design For Philanthropic Matching Funds.

In this paper, the dynamic duo adapts the mechanism behind quadratic voting to funding of public projects. Imagine Ethereum Foundation would commit to donate funds to ICO projects in order to grow its ecosystem (which they should do). What would be the most efficient way to do that?

A naive way of fund matching would be dollar-for-dollar (or ETH-for-ETH). Popular projects should be able to raise more ETH, and the foundation would send i.e. another 10% of collected funds. A smarter approach would be to look at who were the backers of these projects. If there are only one or two funds backing the project it might be a VC pump and dump scam that just wants to get easy money from EF. But a project like Saturn, for example, that collected a little bit of money from a lot of unique investors, should get a proportionally bigger share of the EF bonus.

This is a good quick explanation of V's and Glen's ideas

Another great idea, and one we would certainly benefit from financially! So what's the catch?

What do all these ideas have in common

They are incompatible with online privacy.

Bitcoin was designed to be sybil-resistant. In Bitcoin, I don't care if you are one person who runs thousands of blockchain nodes and uses hundreds of wallets. We all have our kinks and fetishes and I'm ok with that. As long as you send me the BTC and I receive it in my wallet we're cool. This design is what fundamentally allows people to keep their privacy online, and be able to selectively reveal their identity to their counterparts (or not, up to you).

Universal basic income, quadratic voting, and liberal radicalism are fundamentally incompatible with online privacy. If you implement UBI as airdrops to active blockchain addresses I'll just make more addresses. For quadratic voting, I'll just pretend I'm not one, but thousand people voting for the same results, also by creating multiple addresses. And for liberal radicalism, I'll just donate the same amount of money but in smaller transactions spread across many addresses.

Being able to create indefinitely many addresses is the key feature of decentralized technology and the key enabler of digital privacy. But if creating multiple addresses breaks Dan's, Glen's and Vitalik's ideas, how would they solve this problem? How do they bring their genius ideas to the world?

There's only one answer to this question: full mandatory on-chain KYC. Mandatory perhaps not in a sense that you must do it, like Voice. Perhaps the network will simply be unusable unless you KYC, i.e. certain features will be locked, or people who passed KYC will receive economic preference.

And yet nobody seems to talk about this issue, like it never existed. Like everybody is cool with being tracked online at a new, unprecedented scale, previously unavailable to Google, Facebook, and even the NSA.

Keep wanking your freedom away while your leaders build this dystopian future. Or share this blog to make sure this nightmare doesn't happen. Let's nip this disaster in the bud before it is too late.

Wake Up People!

What to see more content from Team Saturn? Never miss an article or update by subscribing to our newsletter, following our twitter and joining our community!