1 min read

Tyranny of the minority

If you're unfamiliar, the idea of "tyranny of the majority" is a criticism of democracy. Basically, whatever the majority of people want is what gets passed into law, so anyone in the minority just has to deal with that.

On a blockchain, it's really hard to give 1 vote to every individual. It's easy to create multiple accounts, and it's hard to verify identities. The (easy) solution is to just give people as many votes as coins they hold (you can use other factors as well, but this is the general idea).

From what we've seen so far, this works pretty well. People who hold a lot of the currency don't want to risk harming the network (and making their money lose value) by going against the majority (in theory).

But as discussed in the last two days (1, 2), the majority of the currency will eventually always be owned by a small percentage of people, giving all the power to the rich. In my opinion, this is fine for blockchains for two reasons:

  1. "The rich" presumably spent a fair amount to acquire your currency, so they're incentivized to ensure the value keeps going up.
  2. Blockchains can't (at least so far) impose the same kinds of restrictions/laws on people as governments/countries can. It's strictly economics and computing.

The main problem I see is that "the rich" may make decisions which make the blockchain less accessible to smaller/poorer people (EIP-1559 anyone? Why not just reduce fees?).

For Koinos to become (and remain) the most accessible blockchain in the world, those who hold the most Koin may eventually need to make decisions that favor accessibility over profits.

More tomorrow,


P.S. it also helps that participating on a blockchain is completely voluntary. Instead of being stuck with the rules of your country, you can always switch countries easily (or start your own).