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Hi, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Today is October 13, 2024, and we're making a video about something near and dear to my heart: blockchain tenets.
At the beginning of the year, Agalo and I were discussing a way to encapsulate almost like a Bill of Rights for Cardano. As you know, we're writing a constitution as an ecosystem. More than 50 workshops have already been held, with a total of 63 delegates being elected and 1,400 people participating. One of the things people are discussing is the idea of foundational rights embedded within the constitution of Cardano as a design steer or north star for where we want to go as an ecosystem.
We have a blog post that Agalo just pushed on the 10th, which was three days ago. It's titled "The 11 Blockchain Tenets: Towards a Blockchain Bill of Rights." This is not exclusive to Cardano; rather, it's a viewpoint on all these types of technologies and some foundational concerns that should be baked into the system as a whole. I'm going to read some of it verbatim, and then I have a whiteboard over here, and we'll go through a few ideas.
Designing blockchain systems is a challenging endeavor. It's also a continuous process as these systems are long-lived and aimed at capturing requirements that evolve during their lifetime. It follows that a blockchain project's community often faces difficult decisions that fork the future of a blockchain system in many different ways, with consequences that are hard to fully anticipate. Community decision-making frequently requires assessing highly technical proposals that can be mutually conflicting and impactful in various ways.
To meet these challenges, it can be useful for any blockchain project and its community to follow a first principles approach that evaluates whether a specific improvement proposal aligns well with a handful of general principles or tenets. The goal here is to take something specific that's been set to the government and compare it with something general—tenets that are widely accepted by the community, reflecting the basic rights community members expect to enjoy as users and contributors to the system.
These basic rights, when we look at them from the perspective of blockchains, tend to be implicit. When you use Bitcoin or Ethereum, we have a deep feeling inside about what ought to be true, but we typically don't write them down. This is the first time I think people are explicitly trying to write these things down. This methodology provides a common ground and frame of thinking that the community can use to deliberate, categorize, and prioritize different improvement proposals based on how well they align with their fundamental expectations from the system.
To showcase this way of thinking, we discuss our 11 tenets that aim to offer comprehensive coverage of how blockchain systems are supposed to operate and engage with their users and contributors. These tenets are meant to capture the natural dissonance of these systems and the rights of their users. Note that they are not expressed in a way that makes them necessarily mutually compatible or algorithmically enforceable. This is inevitable, as it can also happen in constitutional human rights law, where experts have to weigh between different and sometimes incompatible rights and their appropriate interpretation to find the best possible balance on a case-by-case basis.
It can be expected that no realizable system can offer a perfect embodiment of all 11 tenets simultaneously. These tenets are not necessarily independent and mutually consistent with each other; in some cases, they contradict each other. Ultimately, it is up to the community to decide at a specific point in time what is the most appropriate trade-off and interpretation in the context of a given improvement proposal. We list the 11 tenets next, each followed by a short explanation.
Taking this away, when you look at this as a whole, you have a situation where we have an on-chain government now, and that on-chain government wants to make changes to the protocol. It's going to fork it, and while it's working its way through that, a lot of the changes are going to be encapsulated in SIPs.
So, let's think about this. Our goal is that the on-chain government is going to fork or change Cardano. This will usually be in the context of SIPs or other packages, and these changes are likely going to be highly technical. If we're going to do this, it's probably worthwhile for these specific improvements to score them against general principles.
Let's take a look at these general principles.
**Tenant Number One:** Transactions cannot be slowed down or censored and will be expediently served for their intended purpose. This is a reasonable principle. The parallel here can be made to freedom of speech; transactions express the ways users wish to engage with the system. Users should be free and able to do so in a manner proportional to their intent. This excludes censorship but also mandates expediency in processing.
You have a finite resource, and transactions cannot be slowed down or censored. So, if Bob wants to send a transaction to Cardano, that transaction carries with it a fee, and it should result in outputs inside the system. The basic idea here is that this cannot be slowed down or censored and will be expediently served for their intended purpose.
In practice, this is really hard. What happens when you have not just Bob, but also Bob 10,000, and all of them are submitting transactions at the same time, but you only have room for 500 at a time inside a particular block? Naively, we can say the Bob who pays the most money wins, but what if Bob 10,000 has a very critical transaction but is kind of poor?
This is a bear of a challenge. You have things like fee markets as an example. We wrote a paper called tiered pricing, and we have concepts like intent-based ledgers, where you tell the system what you want and let the system figure out how to make it work. But in practice, this alone is a huge body of work.
**Tenant Number Two:** The cost of a transaction should be predictable and cannot be unreasonable. This is closely connected to the slowing down or censorship component. While it is expected that the system will impose costs to post a transaction, such costs cannot be unreasonable given the purpose of the transactions, and the cost should be predictable, enabling users to plan for long-term system use.
Every business in the world requires predictability. When one of these Bobs is interacting with the system, they should know what the cost of using Cardano is going to be for their application over a reasonable period of time, and that cost should be competitive with alternatives.
**Tenant Number Three:** No one should be prevented from developing or deploying their application as they intend. This is a utility view; I want to use the system to host a decentralized application. The system and its development environment should support users with different backgrounds and skill sets to launch applications that truly capture their intent.
There's a famous paper from Moxie Marlinspike discussing the lies of Web 3. The idea is that we say it's totally decentralized, but it's not really because behind the scenes, you have centralized infrastructure. The challenge is that this tenet would be violated if the surface is too large.
**Tenant Number Four:** Everyone's inputs and contributions to the system will be recognized, recorded, processed, and assessed fairly. While the system inevitably requires the expenditure of resources to support all of its operations, the value that different system contributors offer in terms of maintenance, development, or transaction processing time should be fairly accounted for.
This is a tragedy of the commons problem. When Bob is running a stake pool as an SPO, he makes blocks and acts as a relay. The challenge is that the compensation system rewards this kind of work but does not adequately recognize or compensate other contributors.
**Tenant Number Five:** The value and data users contribute and/or create will not be locked or processed without their consent. Users should be allowed to transfer their private data to any system or platform they desire to engage with. In the case of a blockchain system, the same should apply to the assets users possess or create.
**Tenant Number Six:** The system will safely preserve the value and information stored in it. Safety here can be interpreted in two ways: the integrity of the information recorded and value preservation. Users should have the option to use mechanisms such as stablecoins to preserve the value of their assets.
**Tenant Number Seven:** No resources will be unnecessarily spent. This means finding the best algorithm for a given task is important. We do not want the system to waste more resources than necessary.
**Tenant Number Eight:** The system will treat users fairly and will evolve according to their collective will, aiming at its long-term sustainability and viability. This refers to the right of users and contributors to participate in governance and development in a fair and representative manner.
**Tenant Number Nine:** Users' privacy, both in terms of their actions and their data, should be preserved. This is best understood in parallel with privacy requirements presented in relevant data protection laws.
**Tenant Number Ten:** The system will offer users ways to engage that do not require them to break local laws and regulations. This is about providing tools that do not require users to break laws.
**Tenant Number Eleven:** The system's operation should be transparent, predictable, verifiable, interpretable, and without asymmetries. This mandates that the system should operate in a manner that users can observe, verify, predict, and understand.
One way to put the above tenets to use is to assess how a blockchain improvement proposal aligns with them. Given a proposal, assessors may ask if it will improve the system's behavior with respect to some tenets. They can also ask whether the improvement is tangible and significant given the resources required to implement it.
It can be expected that on some occasions, such deliberations will not be simple or straightforward, and communities can become polarized around specific proposals. Debate is inevitable and important, given the breadth and scope of blockchain systems.
These tenets are currently being actively debated by the Cardano community as part of a series of constitutional workshops taking place across the globe, prior to the refinement, finalization, and approval of a Cardano constitutional text at a constitutional convention in Buenos Aires, Argentina, at the end of the year.
Hopefully, these tenets will act as beacons on the horizon that will guide Cardano and other blockchain communities to where they intend to travel, ultimately making it feasible to reach their destination. We're going to be hosting a special space on X on October 30th, with Agalo and myself, to discuss these topics.
These are not just Cardano tenets; they are blockchain tenets refined from understanding what Satoshi started and 15 years of history analyzing what has been done in the blockchain space.
Thank you for listening, and I hope this primes your pump and gets you excited about the whole topic of blockchain governance and fundamental rights. The Constitutional Convention is on schedule, and the last few workshops are underway. Every one of them is electing delegates and alternates who will descend upon Argentina in mass in December.
Thanks again, and I will see you on the other side. Cheers!
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