Resisting Plutocracies In The World of Blockchain And Web3 by@kjmorris

Resisting Plutocracies In The World of Blockchain And Web3

PoW and PoS blockchains lead to plutocracies, where those with the most money have the most voting power. This means that poorer individuals lose their voice. The solution to this is to find a way to run a blockchain that does not use processing power or money as a metric for distributing votes. This is what the proof-of-person blockchains are focused on doing, with the aim of creating fairer decentralized systems.
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Kai Joel Morris

Web3 and Blockchain Ethicist // Writer // Philosophy & Law Graduate


In the blockchain and web3 space, it is common to see projects discuss autonomy, voting powers, and governance. These are some of the major driving forces that instil the community with hope for a new technological future– one that is fairer and more equal. However, there is a looming problem that holds back such ideals, stemming from how the industry acts and behaves.


Beware Plutocracies

One of the most exciting aspects of the blockchain industry is that it changes how communities congregate and organize themselves. This is known as self-governance, which has been around since the inception of Bitcoin, with miners voting on protocol changes and subsequently forming their own organisations. The fact that Bitcoin’s most instrumental figures have crucial voting powers is extremely significant as it allows them to shape the network into whatever they see fit.


This is a revolutionary feature, but it has a major problem. Votes are not counted as one-per-person, but essentially one-per-mining rig. The Bitcoin protocol is unable to count votes based on the actual people voting– the votes of one lone miner will never be equal to the votes of a corporate miner who can afford hundreds of ASICs. This is how all proof-of-work blockchains function, although this issue is not limited to them– it is even more transparent with proof-of-stake chains, where money is used to validate blocks, and therefore measure votes.

In other words, your finances determine how many votes you have.


This leads to plutocracies– systems where the wealthiest entities have the most leadership powers. The truth is the vast majority of blockchains are run by plutocratic means, as it is always those who can afford the most mining power, or who can validate the most transactions, that have the most votes.


To illustrate this, take a look at Bitcoin’s mining distribution. Despite having miners all across the globe, 60% of the BTC mining hash rate belongs to just 4 mining pools. Ethereum is not much better, with 58% of the ETH mining hash rate belonging to 4 mining pools. In other words, proof-of-work and proof-of-stake blockchains can easily foster monopolies, where mining corporations have the most power and influence.


This issue has gotten worse with the emergence of governance tokens, or assets designed specifically to provide voting power.

There is no Such Thing as a Fair Plutocratic System

So long as the richest members of a community have the most influence, the voices of the poor will never be heard. The vast majority of the blockchain industry is guilty of this, as tons of projects offer control via governance tokens, increased mining capabilities, or staking money. This limits the democracy of a project. If votes are weighted, then it creates a hierarchy of voters, which always leaves some disadvantaged people at the bottom.


Unequal distribution of votes may work in some select circumstances, such as how shareholder votes are counted in publicly listed companies, but when it comes to open networks that are designed for everybody, this cannot function as those with the most money are given a stronger voice, leaving the system open to abuse. Arguably, this violates article 1 of the UN Declaration of Human Rights, which demands all humans have equal rights. If there is no equality of votes, there can be no true democracy.


Plutocracies also prevent truly decentralized systems from forming. It does not matter how geographically distributed a project’s users are if power is not equally distributed among those users. True decentralization requires both conditions to be met.

Indifferent Developers

This is a widespread problem within the blockchain and web3 space, yet it rarely gets discussed. Why?


Because plutocracies make money. Developers are able to take advantage of this disparity by selling power to their userbase. It seems as though the industry has distanced itself from engaging in this socio-political issue as a means of building profits.


The selling of governance is so rampant that it leads many to believe there is simply no solution to this type of power imbalance. On the rare occasion when this problem is discussed, it is common to hear people say there is no alternative, but this is not the case. There are blockchains that exist where votes are not counted by mining power, staking of coins, or any other financial metric, but rather by a person’s individuality. These are often referred to as proof-of-person blockchains.

Understanding Proof-of-Person blockchains

Proof-of-Person (PoP) blockchains find ways to validate each person without using mining power, money for staking, or by verifying personal documents. This is, without a doubt, tough to do in a decentralized setting, as there is no simple way to figure out if somebody is a real person or if they are voting twice when you do not have a centralized intermediary to validate each individual. In fact, this is the crux of most research within the PoP space. There are several methods of doing this, one is using a set of unique tests that are designed to be easy for a human, but hard for a machine, and hard for one human to do twice at the same time. These would be CAPTCHA-style tests that need to be solved by using common sense, making them perfect for humans, but a nightmare for AI. Once somebody is determined to be a human, you can start treating them as a unique individual, providing them with voting capabilities.

Any project using a PoP blockchain can then be confident that the people interacting with their tools are given fair and equal opportunities, all without anybody having to hand over deeply sensitive data. In an age where people arerightfully wary of data exploitation by tech companies, it is more important than ever that people do not compromise themselves by being forced to distribute documents such as passports, bank statements, or birth certificates.

Compassion as a Technological Driver

Blockchain developers driven by the proof-of-person consensus are working to bring about technological change, instigated by the desire for a more compassionate system that cannot be exploited by bad actors. This makes them great solutions for bringing about social change. Once you start limiting votes to one-per-person, not only can you give users equal voting rights, but you can distribute wealth and resources between them. One of the most impressive use-cases of PoP blockchains is providing Universal Basic Income to its participants, helping lift people out of poverty and reduce stress without the need for means-testing or any intrusive weighting methods.


PoP blockchains are also great for DAOs, as they allow users to make decisions without worrying about wealthier members having the loudest voice. This allows for votes that better reflect a community.

Final Words

Proof-of-person blockchains are the perfect tool for helping make the web a more dynamic and individual-focused space. They should not be a niche alternative to the status quo– they should be the norm. If we want the internet to become a fairer place, then we need more plutocracy-resistant measures– and the push for that should come from developers, influencers, and enthusiasts alike.

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