# Ethereum Against Darkness // From Democracy to Dictatorship and Back ![pic](https://hackmd.io/_uploads/rkMN1Td_ex.png) _Special thanks to valdorff and [jasperthefriendlyghost](https://x.com/drjasper_eth) of the Rocket Pool community for review and feedback._ ## Hierarchy, a pyramid that attracts robbers We, humans, love cooperation. It allows us, living in societies, to achieve things no human can do alone: catch a mammoth, build a longship, govern states. For cooperation to be efficient, we need to organize in some way to coordinate our efforts. The most important element of coordination is a separation of responsibilities, so everyone knows their role and what part they play. Like gears assembled in a clock mechanism create a whole new dimension, people working in harmony can produce amazing things. Historically, we mostly use hierarchies as organizational structures for coordinating both our living in societies and our businesses. A hierarchy is a battle-tested (I mean, literally) way to effectively coordinate large groups of individuals. But of course it's not the only way, it's just fairly simple and familiar to us. A hierarchy has one specific feature—the higher the rank, the more steering power it gives to a person. You may see it as a power steering system in a vehicle. It allows those on top of it to guide human communities more smoothly, with less effort, to a brighter future. In theory, at least. Of course, it's rational to give the steering wheel of our social vessels to those who genuinely wish their community to thrive and reach its ambitious goals. But in practice, positions of power are usually occupied by selfish people who serve their own interests. The reason for this is simple. When a lot of people cooperate for a great cause, a huge amount of resources also gets involved. This includes both the resources required to achieve a goal and the resources created as a result. We may even see people themselves as the first resource that's available at the disposal of higher ranks. But also money, supplies, natural resources, legislative power, etc. And the power to decide on how to use resources—an essential part of coordination—can be easily used to extract wealth and other benefits[^1]. Thus, top positions in hierarchies attract self-interested individuals, while we wish for altruists. ## Dark triad and the natural selection of dictators It may seem logical to think that real altruists are as likely to get into higher ranks as those who only pretend to be altruistic, but I argue that power exploiters have a much higher chance in this "king of the hill" game. Unfortunately, many of those people cheat and exploit our trust. It's natural for them due to the very special traits they possess. Those traits are generally referred to as the dark triad in psychology, but you may have heard of psychopathic, narcissistic, or Machiavellian personality types out of an academic context[^2]. Associated with selfishness, deceptiveness, manipulativeness, indifference to morality, and a lack of empathy, they make their bearers ultimate champions in the sport of climbing through the ranks. Why? Because they simply don't abide by the rules. And just as with gaining trust, cheating often helps them to avoid punishment. Furthermore, being amoral and having impaired empathy, they do not shun foul play, which further repels (and sometimes eliminates) honest players. So you see, they have a greater variety of means to achieve their goals and thus get a much higher chance to win top seats. And once they are on top, they want to cement their position to preserve benefits and avoid punishment for their unfair play. This means seizing enough steering power to maintain or dictate a status quo—bam, and another authoritarian regime is born. At the same time, the more power our societies harness with technological progress, the more powerful dictators become. The Internet, big data, and AI made surveillance and propaganda so much more impactful. So, to recap, a hierarchy is a ubiquitous organizational structure we use to cooperatively achieve complex and maybe otherwise unreachable goals. Cooperation usually involves and generates a great amount of wealth and other benefits that are possible to extract. In a hierarchy, with its rank–power identity, the higher the rank, the bigger the opportunity to exploit this. The opportunity attracts self-interested individuals, and those of them who are ready to do anything, no matter how immoral, to reach their goal, have higher chances to climb to higher ranks. Further, they have to hold on to their position of power to save their benefits and avoid punishment. Therefore, they hoard all power in their hands. So, perhaps a once-democratic regime naturally tends towards corruption and eventually turns into dictatorship. ## Ethereum, a culture and technology of the next democratic revolution Ethereum is a new technology, and as with any technology, it can be used both for good or for harm. I argue, however, that Ethereum, due to its unique properties, has a great chance to help us fix the issues in our organizational structures and cure our societies of the spreading authoritarian plague. The first of its important properties is the Ethereum ethos, the values[^3] which its creator, Vitalik Buterin, and a myriad of developers and builders around the globe broadcast. This is the beacon that will guide future generations and shape their culture. And the culture is a cornerstone of the new coordination mechanisms we are about to build. Two other properties are the transparency of the blockchain and the ability to create immutable smart contracts. If we have to deal with cheaters—and we can't fight them directly[^4]—immutable rules are exactly what we want. The same is valid for transparency, yet one may argue that transparency is not new or unique to Ethereum. That's true, but what's important is that while it's present by default and we are getting used to it, it becomes our culture. And here come DAOs... DAOs are organizational structures born in that culture, built on Ethereum, transparent, and utilizing immutable smart contracts for the management of steering power and resources. They are especially interesting because they allow the distribution of ownership over a product or a company among a great many people—be it its users, developers, or even sympathetic bystanders—from the very beginning. This becomes possible with Ethereum due to the ability to easily and transparently operate with money, including fundraising and the sale of shares. Achieving the same crowdsourced and crowd-owned company with traditional finance is nearly impossible. At the same time, this approach of inborn crowd ownership, leads to a serious shift in how power in a business is distributed. At present, in traditional corporations with a hierarchical structure, the steering wheel is completely in the hands of a few: founders, early investors, and top management. And they exploit it for their benefit—they pocket most of a company's profits, while ordinary employees have to work more and more for less and less money. Most employees simply have no voice, and because every company in the world works the same, they have no choice either. With DAOs, where every involved person has voting power from the start, the chance that most generated wealth goes to a small group of people is significantly lower. Distributed ownership means fair distribution of profits. At present, DAOs are in their infancy yet, many still resemble traditional corporations and are virtually owned by venture capitalists. And those on the other end of the ownership distribution spectrum may be extremely slow and inefficient when it comes to reaching decisions and coordinating actions. But we are learning. In the near future, we may see the advent of DAO-led companies that are owned by a vast spectrum of stakeholders from the birth: mostly by employees themselves and users of their products and services. They will inherit the best business management practices from traditional companies and combine them with agile coordination built on principles of direct democracy (or rather, liquid democracy). They won't be inferior to traditional companies in any way and are set to compete with them. Due to fair distribution of profits, their employees will enjoy much higher wages. This is going to result in a workforce exodus from today's corporations and a Cambrian explosion of new companies adopting this new culture. These DAOs' organizational structures will be hard or simply pointless to corrupt. With the steering power spread thin across an organization, there's just no power pots to attract power exploiters. With transparency, fair power distribution, and direct democracy ensured by immutable rules, it's meaningless to accumulate power, and hard to cheat. And as the last old-world corporation bites the dust and we find ourselves completely used to our new transparent, fair, and truly democratic organizations—like tiny states where equality is innate, and there's no more place for cheating and corruption—we will be ready to scale this approach and the culture to our nation states. And so another chapter in human history begins... --- [^1]: For example, one may trade their steering power for other resources, offering favorable conditions for one party compared to others (we call this bribery). Or one may simply steal resources if an organization is not transparent enough. [^2]: See [https://en.wikipedia.org/wiki/Dark_triad](https://en.wikipedia.org/wiki/Dark_triad). Below are a few recent, and quite interesting in my opinion, publications on the topics of psychopathy, narcissism, and Machiavellianism. It's important to be informed, and it's crucial to remember that people are not bad innately. Somebody's negative traits are likely the result of either a difficult upbringing or harsh life conditions, both of which are our failures as a society. i. [Psychopaths: why they’ve thrived through evolutionary history – and how that may change](https://web.archive.org/web/20230523130700/https://theconversation.com/psychopaths-why-theyve-thrived-through-evolutionary-history-and-how-that-may-change-199534/) ii. [Narcissistic leadership in Hitler, Putin, and Trump shares common roots, new psychology paper claims](https://web.archive.org/web/20250716102925/https://www.psypost.org/narcissistic-leadership-in-hitler-putin-and-trump-shares-common-roots-new-psychology-paper-claims/) iii. [Massive psychology study reveals disturbing truths about Machiavellian leaders](https://web.archive.org/web/20250715071111/https://www.psypost.org/massive-psychology-study-reveals-disturbing-truths-about-machiavellian-leaders/) [^3]: Those values are fairness, inclusiveness, equality, and transparency, which manifest in Ethereum as permissionlessness, neutrality, minimization of trust assumptions, and transparency of a blockchain. [^4]: Fighting them is not a good option—an unarmed person can't beat a gunman, and an honest player can't win against a cardsharp. And despite having law enforcement, we still have crime, so direct fighting is obviously inefficient.