''Digital democracy' refers to the use of digital technologies to enhance democratic processes and citizen participation. In the current era, digital democracy stands at an inflection point. On one hand, digital advances present significant threats to democratic integrity, including through misinformation, digital surveillance, and cyber attacks. On the other hand, these very technologies offer unprecedented opportunities for populations to take control of democratic rights and create more inclusive, transparent, and participatory governance systems. The digital landscape has become a central arena in the effort to expand and protect democratic rights.
While blockchain technology does not have all the answers, advancements in distributed ledger technology (DLT) represent a genuine attempt to build trust-less and permission-less networks at scale. DLT is particularly relevant to digital democracy for two main reasons:
- Direct - DLT can provide genuinely beneficial use cases within democratic processes, such as secure and transparent voting systems, public sector transparency, and combating corruption.
- Informative - the principles underpinning blockchains teach us a great deal about self-organising networks and decentralised decision-making, offering valuable insights into how democratic processes can be expanded and safeguarded in the digital age.
The DLT conceptual framework
DLT technology (including blockchain technology) extends far beyond its association with cryptocurrencies. At its core, blockchain is about creating decentralised networks where no single entity has control. Instead, control is distributed across a network of participants who adhere to a common protocol. This protocol, accepted and used by the network, ensures that the system operates without a central authority. If participants disagree with the protocol, they simply use a different one, or create a variation of the current one (a fork).
Consensus mechanisms
Consensus mechanisms are methods for ensuring that all participants in a network agree on the state of the blockchain without needing a central authority. Consensus mechanisms are themselves a form of protocol, since they are essentially rules for how consensus is to be established.
These consensus mechanisms inform our understanding of digital democracy more broadly because they illustrate how decentralised systems can achieve agreement and maintain integrity without centralised control. Not only can they potentially be used as part of a secure, transparent, and democratic process, they offer a model for such processes more broadly.
Blockchain technology is built on three fundamental principles:
- Decentralisation - no single entity controls the blockchain; instead, it operates on a peer-to-peer network of nodes. This decentralisation reduces the risk of corruption and increases the system's resilience against attacks.
- Transparency - all transactions on a blockchain are recorded on a public ledger that is accessible to anyone. This transparency ensures accountability and trust among participants.
- Immutability - once a transaction is recorded on the blockchain, it cannot be altered or deleted. This immutability ensures the integrity and reliability of the data.
Blockchain for voting systems
Blockchain technology has significant potential to revolutionise voting systems by addressing common challenges such as security, transparency, and voter fraud. It helps to offer:
- Security - each vote is linked to the previous vote, creating a chain of data that is nearly impossible to alter.
- Transparency - votes recorded on the blockchain are publicly accessible, allowing voters to verify themselves that their votes were counted correctly, helping build trust in the electoral process.
- Tamper-proof - once recorded, votes on the blockchain cannot be changed, helping ensure the integrity of the election results.
Has blockchain been used in elections?
There have been limited trials including:
- West Virginia’s mobile voting pilot - in 2018, West Virginia conducted a pilot project using blockchain technology for military personnel stationed overseas. The pilot aimed to provide a secure and accessible voting method. While the pilot showed promise in terms of accessibility and security, it also faced criticisms regarding the verification and anonymity of votes.
- Voatz - Voatz is a blockchain-based mobile voting platform that has been used in various pilot projects across the United States. The platform aims to enhance election security and accessibility. However, Voatz has faced scrutiny over security vulnerabilities and the transparency of its technology, largely at the intersection of the DLT and traditional technology which is a common security vulnerability.
These limited 'real world' trials have exposed some of the security and transparency issues with using DLT technology in democratic processes and there are other inherent risks. For example, blockchain governance protocols are not inherently immune to 'game theoretic attacks'. In fact, as Ethereum creator Vitalik Buterin put it: "in any vote, the probability that any given voter will have an impact on the result is tiny, and so the personal incentive that each voter has to vote correctly is almost insignificant [so] a relatively small bribe spread out across the participants may suffice to sway their decision, possibly in a way that they collectively might quite disapprove of".
Arguably, given that decision making still happens at the human level in any democratic voting system, there is no straightforward way to mitigate this risk except for greater transparency, which decentralised voting systems do at least help with. There is, therefore, an argument that informal governance, as used in Bitcoin and Ethereum's protocols, is underrated when compared to more complex blockchain governance systems with strict voting rules. Governance is about more than just voting, and if we separate the 'decision function' and 'coordination' views of governance, we get a multifactorial consensus model incorporating various coordination mechanisms. In this world, on-chain voting is one of many tools rather than the sole decision-making method.
There is also an issue with the evolving nature of truly decentralised protocols and consensus mechanisms. In a decentralised or permissionless DLT, there is scope for users to create governance rules and the protocol evolves naturally by way of market adoption. In a voting system introduced by a centralised entity like a government, any use of DLT is much more likely to be permissioned or closed with protocols and consensus mechanisms set centrally. The incentive to use DLT in this kind of democratic process is much more to do with security (which while extremely robust, is not immune from attack), transparency and immutability than with the lack of a centralised or hierarchical intermediary. In fact, most governments or other network control authorities would argue that the rules underpinning the DLT must be fixed, preferably through a democratic parliamentary process if the DLT is to provide certainty in a democratic context. And therein lies another problem. Who sets the rules? How are they made? How can they be changed?
Decentralised Autonomous Organisations (DAOs) and governance
DAOs are essentially digital organisations run by a set of rules encoded on a blockchain. They function autonomously according to protocols and are managed collectively by their members. Decisions within a DAO are made through a voting process where each member’s influence is typically proportional to the number of tokens they hold. This structure allows DAOs to operate without the need for a traditional hierarchical organisation, enabling a more democratic and inclusive approach to governance.
Many DAOs have been successfully implemented, demonstrating their potential in various applications. For example:
- MakerDAO is a decentralised organisation that manages the stablecoin DAI. It uses smart contracts to maintain the value of DAI and allows token holders to vote on critical decisions affecting the system.
- Aragon provides a platform for creating and managing DAOs. It offers tools for decentralised governance, including voting systems and financial management.
DAOs can be used for local governance and community projects, providing a transparent method for collective decision-making. By using blockchains, DAOs ensure that all decisions are recorded immutably and are accessible to all members, which can help to foster trust and accountability.
Examples of community DAOs
- Gitcoin DAO focuses on funding public goods in the open source development space. It uses a decentralised governance model to allocate resources to projects that contribute to the Ethereum ecosystem.
- Rarible is an NFT marketplace that operates as a DAO. It uses a token called RARI to enable users to vote on platform upgrades and decisions.
However, DAOs also face significant challenges. Security vulnerabilities in smart contracts can lead to hacks, as seen in the infamous hack of 'The DAO' in 2016. Additionally, the concentration of voting power among a few large token holders can undermine the democratic ethos of DAOs. Regulatory uncertainties and scalability issues are also common challenges that need to be addressed. They nevertheless represent a transformative approach to organisation and governance, leveraging blockchains to create transparent, democratic, and efficient systems.
Worldcoin and its relevance to digital democracy
Worldcoin is a project founded by Sam Altman, CEO of OpenAI, designed to create a global digital identity and financial network. It aims to provide every individual on the planet with access to the global economy through decentralised identity verification and financial transactions. It uses a unique identification system called World ID, using biometric data to ensure that users are real humans, thereby preventing fraudulent activities and sybil attacks (where one entity illegitimately creates multiple identities).
Worldcoin operates on a newly launched blockchain called World Chain, which is built to scale the Worldcoin protocol and the broader Ethereum community. The network is designed to prioritise human users over bots, a big problem to solve within the Web3 ecosystem and in a world with generative AI proliferation. Verified users receive benefits such as priority blockspace and a 'gas' allowance for transactions.
Digital democracy context
- Worldcoin's use of biometric data for identity verification addresses one of the significant challenges in digital democracy - ensuring that each participant in the democratic process is unique and legitimate to help prevent fraud and increase trust in digital voting systems and other democratic processes.
- By integrating universal verifiable ID with financial services, Worldcoin aims to democratise access to the global economy, which is key to participation in modern democracy.
Worldcoin has already created millions of World IDs for real humans. However, despite its successes, it faces significant challenges, particularly around privacy and regulatory scrutiny. The use of biometric data is a significant legal and ethical concern, leading to temporary bans in some countries. Ensuring the security and ethical use of this data remains a critical challenge.
What is the future of digital governance?
Innovations on the horizon
Innovations in AI and quantum computing stand to have a considerable impact on digital democracy. While much has been made of the threats posed by AI, the picture is arguably more concerning when considering quantum computing.
As quantum computing advances (maybe even nearing practical usability at some point!), it presents both a threat to and an opportunity for digital governance. Quantum cryptography offers the potential for quasi-unbreakable encryption, which might significantly enhance the security of blockchain networks against quantum attacks. However, quantum computing's ability to solve complex problems at unprecedented speeds could also be the very undoing of existing DLT systems and protocols.
This poses a risk to the security and integrity of digital governance systems, as sensitive data and transactions could be exposed to malicious actors. Not only would this undermine the democratic nature of any digital governance system, but the transparency enabled by quantum computing could lead to increased surveillance and manipulation if not properly managed, threatening the privacy and freedom essential for democratic governance.
Global perspectives
Decentralised governance has the potential to be adopted by various political systems around the world, each benefiting uniquely from its implementation.
- Democratic systems - in democratic countries, decentralised governance can enhance transparency and public trust by providing immutable records of governmental actions and decisions. It can facilitate more direct and participatory forms of democracy, allowing citizens to vote on policies and proposals directly through blockchain-based systems.
- Authoritarian regimes - while adoption in authoritarian regimes may be more challenging, decentralised governance can provide a way for information to be shared by individual people trust-lessly and without established control authorities, which is especially important when access to the traditional internet is restricted.
- Developing nations - for developing countries, decentralised governance can offer significant advantages by providing more accessible and transparent governmental services. It can help bridge gaps in infrastructure and trust, enabling more efficient delivery of public services and reducing corruption through transparent transactions. Arguably most importantly for developing nations, decentralised networks move power from existing market players and can expand economic participation.
As with so many developing technologies, those with potential to be used in digital democracy have strengths and weaknesses. Digital democracy promises much in helping to counteract voter fraud and bad actor interference in elections but, for now at least, is likely to be used for smaller scale voting processes, public sector transparency and prevention of corruption, rather than in general elections.
