What’s Next for Ethereum After the Merge

GL: You’ve written a lot about governance and I’m interested in the potential uses of blockchains for governments and societies. What is the potential of using decentralized systems like Ethereum for running decision-making on social issues, and not necessarily crypto-related issues?

I think blockchains can be a good technical infrastructure for running a lot of these very base layer mechanisms. They’re good for currencies. They’re good for things like domain name systems. And I think at least the formal ingredients of a governance system can often make sense to put partially on a blockchain. Although I want to put in some caveats, because governance is also the communication and everything that goes around a system, and most of that’s going to happen on platforms that are off [block]chain.

Blockchains for things like voting are an interesting example. People talk a lot about blockchains providing censorship resistance, for example. And the phrase “censorship resistance” gives a lot of people the impression of, you know, I want to smoke weed and not have to ask the government, but people forget that voting requires censorship resistance. If the government can censor your ability to vote, that means that the entire democracy just completely stops working. It’s important for voting systems to have this really strong property, that if you want to vote, then you should be able to, and you should be able to be really certain that your vote actually went to where it was able to be counted. That’s something that I think blockchains, combined with some other types of cryptography that add things like privacy, can do a good job of providing.

LG: You write in one of your essays in the book that traditionally in governance, incompetent people have a way of buying their way into responsibility and leadership roles. Does the blockchain prevent that?

Yeah, good question. This is one of the reasons why I think privacy technology is important. I keep talking about zero-knowledge proofs over and over again because I really believe in the importance of privacy, not just in helping protect people from bad social structures, but also because it’s a necessary ingredient in making many kinds of social structure possible at all.

The corruption in voting issue, and people’s ability to buy their way into power, is one of those use cases where privacy is a really important ingredient. Because if everything is transparent, then everything that you do is basically subject to everyone else’s incentives.

GL: How should crypto be regulated?

Mmm. [long pause] I think it depends on what aspect of crypto is being regulated. So there’s the crypto base layer, and then there’s the application layer on top. For the base layer, we try very hard to prevent it from falling under regulations, especially any one country. It’s critical for the credibility of a platform in every other country for one country to not have too much power over it.

But then once you start getting into the application layer, there are applications that are in different industries. And the specific things that people do with blockchains are things that are more likely to be regulated already. It’s much more difficult to make a public argument that they should be completely free of any kind of regulation.