Ethereum is a gamble. It always has been, from the moment it sprang to life inside the mind of Vitalik Buterin. But to the people who built it, who dedicated their lives to it, it wasn't a gamble. It was clear. And in many cases, it felt as though the future depended on their success.
Decentralization is the lever. Bitcoin showed the world an alternative path for organizing institutions, communities, companies, and self-governing bodies. But decentralization isn't just about how a computer network is set up, how it's organized. It's about data and who controls it. Decentralized systems have the ability to wrest your data from corporations that are using it to shape the world in ways that are completely outside of your control or consent. That's where Ethereum's most powerful potential lies. Deleting the middleman. Your Internet usage can be yours again.
It's a funny quirk of history that the Internet began this way. The lack of system-wide infrastructure meant many pioneers hosted their own servers in order to put web pages up. It was decentralized by necessity, networks jury-rigged all over the place.
By 2013, centralization in social media and Internet service providers had changed all of that. It can be argued that a company like Facebook allows its algorithms to be gamed, that it's a feature and not a bug that allows for dire outcomes such as subverting elections. The same argument can be made about Twitter, that it allows hatred and divisiveness to spread on its platform while at the same time it bans its critics. Real-world consequences can be directly linked to the concentration of power and data accumulation that the Internet era made possible.
Here's a slightly less heady example, but one that I find personally compelling. As I was writing a section of this book, I wanted to play the new National album. But I only had access to it on Spotify; I hadn't bought it yet through iTunes. I opened Spotify and I got a notice saying that Spotify wants to control access to my computer. I am being told to change my security settings if I want to use it. I have no idea what that means, but I don't like the sound of it. I don't want Spotify to have control over my computer: God only knows what it would do with all the personal information I keep on my desktop. But yet I don't have a choice – if I want to use Spotify, I have to give in to what feels like a security lapse.
In contrast, a decentralized version of Spotify using Ethereum would likely be built such that I interact with a smart contract to play the music I want to hear from the contract's music library. It's peer-to-peer in a way that Spotify isn't, so the decentralized version would never ask to reconfigure my computer or have more access than I allow. I would be in charge, not the program.
It doesn't have to be this way. Gavin Wood, one of the Ethereum cofounders, certainly thought along these lines when he discovered the project in late 2013. In the years since, he's honed his beliefs on how decentralization can help restore personal freedom, and he's one of the most articulate speakers around on this topic.
As Marshall McLuhan predicted, we have come to an era where “all of us have become the unwitting work force for social change.” We have all become users, and in the Internet era the number of users translates directly to profits.
Microsoft and Facebook and Google, as well as the corporate interests that benefit from them, like advertisers, all want the biggest user base they can get, Wood said in a Third Web podcast recorded in 2019. The number of users a company has equates directly with how much it will be valued by venture capitalists, for example. A social media company with five million users might get a $50 million valuation.
“In fact, it's increasingly not so much about that, and increasingly about the data these users generate,” Wood said on the podcast. The idea that user data is valuable on the Internet is still an idea many people don't understand. The scale of data now being generated and the ability to harness it has opened up new opportunities and huge economic incentives to companies that know what to do with the data.
“This can be things like targeted advertising, but it can also be other things like just learning better about how the world works,” Wood said. “You can start to predict what people are thinking. You can start to understand the political changes afoot in a country. You can certainly predict things like the outcome of elections.” Social media companies can then be used to refeed and recycle this data to the same set of original users after it's been manipulated or skewed, or what Wood referred to as “memetic feedback loops.”
“Basically, the sorts of clever shenanigans that Russia and Saudi Arabia, and probably a lot of other countries, are using to better control other country's populations,” he said.
Facebook has been a main engine of this disinformation. The US Senate Select Committee on Intelligence report on Russian interference in the 2016 US presidential election has an entire volume dedicated to the country's use of social media. The report noted how social media has changed the very nature of human interaction. During the 2016 campaign 128 million Facebook users in the US engaged in nearly nine billion interactions related to the presidential race between Hilary Clinton and Donald Trump. Fake accounts were created by Russian agents to sow discord and promote false news stories. The report notes that a 2016 analysis done by BuzzFeed stated, “In the final three months of the US presidential campaign, the top-performing fake election news stories on Facebook generated more engagement than the top stories from major news outlets such as the New York Times, Washington Post, Huffington Post, NBC News, and others.” Two of the biggest fake stories the analysis uncovered were about Hillary Clinton selling weapons to ISIS and about the Pope endorsing Trump.
While Facebook has made efforts to limit the spread of disinformation on its platform, many people feel it hasn't done nearly enough. Gavin Wood doesn't even want a Facebook in the equation to begin with. But preventing this type of misuse of Facebook and other Internet companies is an exceedingly hard problem to solve.
“It comes down to centralization,” Wood said on the Third Web podcast. “It comes down to there being a relatively limited number of organizations that have access to data and that are used to get access to data. The fewer search organizations – and the greater level of individual control within those organizations – the more they are able to be gamed, gerrymandered, and utilized to the desires and the needs of third parties that may or may not have the world's best interests at heart,” he said.
Ethereum is a gamble, but its creators wanted very much for it to be a bold gamble that could help solve this real problem in the world. Ethereum isn't some force for moral good: I don't mean to leave that impression. It can't be when Vitalik designed it specifically to allow all manner of applications to be built on it. There are gambling sites and scammers and frivolous endeavors on Ethereum, just like in any industry. The libertarian ideal is very much expressed by the free-for-all nature of what can be done with Ethereum. But the core of the Ethereum ethos, the guiding principle laid out by Vitalik and Wood and Lubin and Green and many others, has always been the idea of creating a better future.
Listening to Gavin Wood lay out his vision, I had the thought that he, like a lot of futurists, has the ability to be dystopian and utopian at the same time. He said he didn't want to sound like a doomsayer, and then laid out his thesis that most people are motivated by greed or power. On an individual level this is understandable to Wood, but he noted that on a larger scale it becomes a problem. The “magnifying glass” of social media and our Internet-based lives are combining to create “societies that are malfunctioning,” he said.
“What we need to do is restrict these nexuses of power to the point where they no longer suck in all that information and no longer give out all that information,” Wood said. “And any information they do suck in and give out should be transparent in its origin.”
Wood is standing on the shoulders of earlier thinkers like Lawrence Lessig. Code and Other Laws of Cyberspace, Lessig's 1999 book, has become a Bible to many in the cryptocurrency world. In it, the former Harvard professor and founder of Creative Commons argued that the dawning Internet era need not be regulated to death by government red tape. Instead, if code is treated as a form of law, cyberspace can be allowed to blossom into a new kind of social commons.
“The space promised a kind of society that real space could never allow – freedom without anarchy, control without government, consensus without power,” Lessig wrote. “In the words of a manifesto that will define our generation: ‘We reject kings, presidents, and voting. We believe in rough consensus and running code.’”
Lessig saw government agencies as the oppressors of online freedom, and in 1999 that made sense. Skip ahead 20 years and the scrappy startups Lessig wanted to protect – tech giants like Google, Amazon, and Facebook – have become the oppressors. A point he makes about the importance of how systems are built concerning decentralized systems and their ability to alter the power balance and about limiting government control of cyberspace is as apt today as it was when he made it.
“But as a culture we are just beginning to get it,” he wrote. “We are just beginning to see why the architecture of the space matters – in particular, why the ownership of that architecture matters. If the code of cyberspace is owned,” he said, “it can be controlled; if it is not owned, control is much more difficult. The lack of ownership, the absence of property, the inability to direct how ideas will be used – in a word, the presence of a commons – is key to limiting, or checking, certain forms of government control.”
Andreas Antonopoulos lived through the early days of cyberspace and the debate about control. One of the sharpest minds in blockchain, he's written books on how to understand the technical aspects of Bitcoin and Ethereum, as well as on the “Internet of money.” He wants Ethereum to “re-decentralize” the web.
“I was around for the first round and it was very decentralized at first,” he said, referring to the years around 1993–1994. “Everybody ran their own web server,” he said. “If you wanted to have your own personal Facebook page you ran your own web server where you put up your face.”
But it can't end with decentralized data; the code itself must be decentralized too.
“Until now we couldn't decentralize trust, so the trusted code ran in the hands of a trusted custodian,” Andreas said. That could be about how you log in to a web site or how much of your personal information is shown to someone else whom you don't trust.
“If you control the code, you control where the data is being processed,” Andreas said. “It therefore doesn't matter if the data is decentralized at first, it will centralize to the places where it's processed and manipulated.”
“With Ethereum, what we're talking about is breaking that control,” Andreas said. A key element here is the payment function embedded within Ethereum. It always comes back to the money. Because ether can be used as payment for smart contracts that control escrow operations, for example, a company like PayPal could be made unnecessary since it only exists to ensure payments are made. If you remove the problem of payments, lots of companies can be cut out of their middleman role, Andreas said.
“We couldn't re-decentralize the web without digital currencies,” Andreas said.
The control exerted by custodians has real-world consequences. Geoffrey Golberg knows this firsthand. In his own telling, he's been “at war” with Twitter for a long time over fake accounts and the real people who use them to amplify false news on the social media web site. In 2018, he exposed thousands of fake accounts in North Carolina that were working together to sway public opinion ahead of Congressional elections. One prominent account was @greensboro_nc, which in many ways tried to pass itself off as the official Twitter account of that city. It wasn't. And not only that, but the fake account dwarfed the real one, @greensborocity, in many ways. The first was in its number of followers: according to a news article in the Raleigh News & Observer, the fake account had about 256,000 while the real one was followed by about 46,200 people. Then there was the number of tweets sent out. The fake account logged more than one million while the real municipal account had tweeted 22,700 times, the newspaper reported. The fake account was also followed by prominent people in the state, including accounts associated with North Carolina's two senators, according to the News & Observer.
The fake account fooled people into believing it was authentic by posting things like local content, pictures of new restaurants that had opened, and announcements about local events. The problem is that the fake Greensboro account made a habit of sending out far right-wing news articles and retweeting similar messages every so often.
“They're trying to set a condition where you expect a certain type of content and then over time they'll start to increase the frequency with which they'll start to inject the stuff that they're truly trying to get your head around, to essentially impact your perception,” Golberg said. As an example, he wondered what would have happened in the November election if the fake account had said that polls were closing early. It didn't do that, but the potential to spread disinformation had been established.
Surely this is a problem Twitter should fix. Except it didn't. The News & Observer noted that the official Twitter account for Greensboro hadn't been able to get the company to remove the fake account, even though it violated Twitter's rules. Twitter didn't even respond to the reporter writing the story about its nonresponse to this fake account.
This is what Golberg is trying to expose. It's sometimes called astroturfing, and it shows up in many ways online. On Twitter, Golberg has battled tweets relating to US–Iranian relations and with the thousands of accounts – fake and real – that rally behind a divisive cryptocurrency project like Ripple (#XRPArmy). While it was hard for Golberg to quantify whether the fake North Carolina accounts had an effect on the congressional elections of 2018, real effects on the 2016 presidential election have already been seen.
Golberg became interested in analyzing the metrics of social media followers after he'd amassed about 40,000 people who followed his video blogging on Periscope. The data of his own group of followers was there for him to explore. He'd created a nice income for himself and had a deal with Heineken to create content during the Rio Olympics. But then he was alerted to some of the extremely disturbing ways in which Periscope, which is owned by Twitter, was being used.
He sought to expose “the rampant nature of these pedophile networks within the Periscope, the Twitter, live video ecosystem that were preying on and grooming children,” Golberg said. “I felt compelled to leverage my audience and status within the community” to do something, he said.
Golberg took an aggressive tack by livestreaming one of these videos to his followers while on a smart phone he searched for what other users were doing on Periscope at that same time. That meant that when he found disturbing content, like an underage Periscope user being encouraged to take off their clothes, it was shown in part to his own audience.
In April 2017, Golberg was kicked off of Periscope by Twitter. He tried to get an explanation of why his livelihood had been taken away, but to no avail. The most he was told was that he'd violated the service's rules. “In many ways I felt helpless, at the whim of some big tech that operates unaccountably, without any recourse.”
Moving to a peer-to-peer system is a step in the right direction, Golberg believes. Yet it's a challenge to say blockchain can fix the problems presented by monopolistic tech companies that can censor – or not – at will. What may be the deciding factor is whether Ethereum can benefit from the network effect. People need to use its platform, it needs to become something they can't avoid, and it needs to be easy. No one really needs to know about the blockchain or smart contracts that are working in the background. But they will notice that a ridesharing app based on Ethereum is 30 percent cheaper. And they might notice that they have more control over their Internet lives if they can pick and choose the social connections they make on their own, without a Facebook or Periscope or Twitter being able to impose their rules and allow their platforms to be abused without consequence.
Ethereum is a gamble. For sure. It could very well fail entirely. But for many of the people involved in building it, failure is a worthy risk if they can put a dent in the way the current technology landscape is fracturing lives and making it easier for hate and discord to spread. They'll gladly fail trying to right that wrong.