In the U.S., elections occur on two and four year cycles for major political positions, and their positions tend to be the product of having proof of stake relationships to major universities, fraternities, law firms and financial institutions. Senators and Congressmen tend to work in lobbying after retirement—further leveraging their accumulated proof of stake in the system. Presidents retire to a life of speaking and writing about their time at the center of the proof of stake network, because those with the most stake are those who make decisions on the delegation of power in order to increase the amount of stake and power in the existing system. So, once someone has stake, it is easier for them to accumulate more stake, creating an oligarchy that is near impossible to break as the lower rungs of the ladder get so high that the only path to sovereignty is to be granted an entrance by the existing ruling class –or to burn the system down.
People may think this is a discussion of PoS or DPoS systems employed by the vaporware known as “Ethereum 2.0” or EOS or Tron networks—and, in some ways, it is, but truly these proof of stake systems have existed for thousands of years.
Leveraging accumulated stake to increase the stake of one’s stake is the cornerstone of the caste system, kingdoms, feudalism and modern bank/state-capitalism. When an entity accumulates stake, and all others must obey orders in proportion to the stake that one holds, systems become lazy, entitled, increasingly corrupt and more prone to be replaced violently by people who have no other means to express their own vote for the truth.
And it is hard to blame violent revolutionaries in such systems because the game theory doesn’t value the individual, their capacity to compete or anything that rewards value-creating incentives. These old, broken governance systems only value the stake, so after a certain point, those who cannot accumulate have little choice to but to overflow the system and attempt to start fresh.
This is why every U.S. President (except Martin Van Buren) has been a descendent of British King John who famously used his stake to grant rights to some barons over a tax feud; ushering in the document known as the Magna Carta. But the Magna Carta was a mere parenthetical in the sovereignty of the King, his state and his stake, and this is why, 800 years later, the most powerful nation in the world is ruled almost exclusively by leaders imprinted with his genetics.
That’s the power of proof of stake, the old world and the detached hierarchies. The only intercessions are the increasingly contentious elections where the commoners have their moment to intercede on the stake-holders once every few years while being told that a single vote is a powerful tool against thousands of years of accumulated stake.
Bitcoin. Fixes. This.
If you ever needed to trust a Byzantine general or elect the best block candidate, the proof of stake model is clearly not the best system for the job. That’s why elections of the Bitcoin sort occur every ten minutes, reward the hardest working enforcer of the law and usher in a system that praises honest actors over anything else.
If the U.S. Election was a proof of work model, like Bitcoin, the candidates would have had to show that above everything else they were willing to forgo all other opportunities and signal their love for the enforcement of the law of the land, and that law would be that which creates the most value for the most people in the most efficient way possible. If candidates became lazy, they would be replaced in the hierarchy by the next candidate who believed in giving an honest signal above all other priorities. To reward the candidate for his work, a reward from the system and small fees from all who benefited could be given, and competitions could start again. All the while, former centers of the system (leaders and kings) would move down in their influence in relative balance with their contributions to society.
In short, proof of work eliminates the necessity for revolution because tiny elections and tiny revolutions are occurring all the time on chain. Bad ideas are rejected, and good ideas are saved forever!
Inevitably, as the culture would shift toward understanding the value of proof of work governance, hierarchies could shrink as increasingly common people could cooperate to form more direct and competitive entities for self-governance and the pursuit of greater power through the system—creating opportunities that could not have existed in a proof of stake system all. The equity of a system built on this proof of work would favor each generation’s most valuable contributors rather than favoring the sons of yesterday’s most valuable contributors. And instead of contentious elections that occur every four years, in theory, we could replace many layers of bureaucracy with all the tiny things that could be fit into gigantic blocks of data to be mined every ten minutes in tiny elections that occur amid the humdrum of life in a proof of work network.
A more valid King
Someday, direct democracy will be seen as little more than honest nodes building blocks. As Satoshi said, “They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.” This is the closing edict of the Bitcoin white paper, explaining that as more and more of the world is settled on chain, national elections too will be decided by whichever blocks contain the most widely validated proof of work, but to see that requires a little bit of imagination and an understanding of Satoshi’s vision for Bitcoin.
Until then, Americans have to choose their leader between two representations of stake in the existing system. This election, like most others, should serve as an excruciating example for the need to be governed by honest nodes.
See also: Dr. Craig Wright’s CoinGeek Live keynote presentation, How One World Blockchain Powers a New Future for Computing & Cloud Systems
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.