Blockchains are internet-native governments. They replace
- paper forms with html forms
- hand-written signatures with digital signatures
- government-id with cryptographic ID
- paper-money with internet money
- the postal service with instant messaging
- laws with code
- ballots with liquid tokens
The Boomer-Gov vs the Zoomer-Gov
For those that don't see the full picture yet, I'm going to walk through the similarities and differences between the boomer governments (nation states) and the zoomer governments (blockchains):
Validators are Judges
The laws of nation states are decided and enforced by a system of judges, police, militaries, etc. - and they help turn fuzzy human langauge and circumstances into deterministic judgements and precedents. In the zoomer-gov, these "judges" are called validators or miners, and their job is literally deterministic: they execute code. There is no ambiguity: there is only one way the code should execute. If a validator screws this up the deterministic computation (maliciously or accidentally), the zoomer government will sieze your assets as punishment (we call this "slashing"). Certain laws and contracts in the boomer world will be reduced entirely to code: e.g. options/futures/other financial contracts. Other agreements will always require a natural language interpretation to judge what bounds of the contract were breached: e.g. what does it mean to act "in good faith"?
The Constitution is the Virtual Machine
Chains have judges and courts to execute the law, but that law can change over time. The boomer-gov would call these "constitutional amendments" - while the zoomer govs call these "hard forks". They can change everything from inflation or economic policies, siezing/freezing funds, speeding-up (or slowing down) certain procedures, change the costs for the entire system, literally anything you can imagine. When the boomer-gov "hard forks," it usually involves lots of violence, civil war, assassinations, asset siezure, revolutions, etc. Sometimes everyone just agrees that the system is broken and agrees to fix it non-violently (France is on it's 5th Republic but had less than 5 revolutions). The so-called "blocksize wars" in Bitcoin's history were literally digital wars that resulted in forks of the protocol; today, multiple chains claim to be the "true" successor of the Roman Empire.
Corporations are DAOs
On top of this constitution + legal framework, blockchains let you permissionlessly launch corporations (DAOs). A DAO cannot do anything that goes against the core rules of the sovereign, much like how a corporation ultimately respects the legal system it incorporates within. E.g. an American corporation could not start enslaving people because that's illegal in America (though maybe not in other parts of the world). In addition to respecting the sovereign, they can pass their own bylaws and the judges (validators) will enforce them at every step. These DAOs can take many forms, most commonly just a partnership (multisig) or a joint-stock corporation with voting shares. Most corporations could only move some of their operations to a DAO today - they still lean heavily on natural-language courts.
For thousands of years, we've only had natural lanaguage courts, which are good for handling ambiguity and edge cases, but are extremely expensive and slow. Blockchains are complementary: the are extremely fast but cannot handle natural language. There are two ways this can play out:
- Boomer governments introduce Fed-chains that are parallel fast finality legal systems for executing machine-language agreements
- Blockchains integrate judges and juries (human or AI) that allow natural language disputes to be settled natively onchain.