The soul can be valued in tokens in a cyber utopia, but can it be sold? Not according to advocates of autonomous organizations of the future.
On May 11, 2022, a visionary article “Decentralized Society: Searching for the Soul of Web3” was published by Vitalik Buterin, co-founder of the Ethereum platform, economist Glen Weil and researcher in the field of exchange trading security Pooja Olhaver. The authors believe that a true decentralized society, called DeSoc for short, may emerge in the near future. It will develop on the basis of the new concept of the Internet Web3, which will cover not only financial, but also the social sphere.
“Decentralized Society (DeSoc)—a co-determined sociality, where Souls and communities come together bottom-up, as emergent properties of each other to co-create plural network goods and intelligences, at a range of scales.”– quote
Web3 concept relies on the blockchain. Nowadays, bitcoin transactions on the blockchain predominate. Although it is applied in other fields that call for greater cybersecurity, finance remains its primary field of application. At the same time, it is quite expensive: the amount of electricity needed to continuously grow the bitcoin chain alone and carry out transactions has already surpassed 100 TWh annually, or around 0.5 percent of all the energy used by humans, and the chain’s weight has gotten close to 400 GB.
Tokens With a Soul
According to a theory put up by the authors of “Decentralized Society,” the blockchain may take over the entire Internet, and the network itself would then serve as the primary information space for all transactions incl. financial transactions, and status confirmation. To do this, they introduce the concepts of “Soul” (Soul) and “Soulbound tokens” (SBT – tokens with the Soul) – such tokens should just be unique (as NFT).
According to the authors, the Soul is an account or repository to which non-transferable SBTs will be connected to determine a person’s responsibilities, abilities, and connections. SBTs with the potential for recall and accumulation in the user’s Soul are anticipated to be issued by other individuals and organizations. SBT will be able to store papers on education, seniority, hashes of essays or works of art, diplomas, attendance at conferences, driving licenses and other valuable marks and “achievements”.
Unfulfilled contracts and unpaid debts will quickly add up to breaches and violations. This opens up the option, for example, for unsecured lending or cooperation based merely on trust and reputation, or helps content writers to associate it with their identity.
The concept is based on SBT’s maximal transparency and publicity as well as the system’s complete decentralization: in a similar manner, Bitcoin’s inventor lost control of his progeny, and it now belongs to everyone. At the same time, the authors allow the use of private tokens and “multiple Souls” in the future, although it is unprofitable for a user who has accumulated a reputation to refuse it for the sake of “moving”.
Decentralized Autonomous Organizations (DAO)
Decentralized Autonomous Organizations, or DAOs, are a significant outcome of blockchain adoption that appear throughout the shift to a decentralized society. These online communities exist in both the virtual and physical worlds at the same time, and they only belong to their members.
The coordination of global communities across distance and difference is greatly enhanced by decentralized autonomous organizations (DAOs), but they are also susceptible to sybil attacks, in which a single user can control multiple wallets to increase their voting power, or in less sophisticated systems of one-token-one-vote governance, simply hoard tokens to gain 51 percent of the vote and displace the other 49 percent.
DAOs could mitigate sybil attacks with SBTs in several ways, by: ● computing over a Soul’s constellation of SBTs to dierentiate between unique Souls and probable bots, and denying any voting power to a Soul that appears to be a Sybil. ● conferring more voting power to Souls who hold more reputable SBTs—like work or educational credentials, licenses, or certications. ● issuing specialized “proof-of-personhood” SBTs, which could help other DAOs bootstrap sybil resistance. ● checking for correlations between SBTs held by Souls who support a particular vote, and applying a lower vote weight to voters who are highly correlated.– quote
The management of such a community depends on the agreement of the participants: each user and operator is forced to comply to the same set of hard-coded guidelines, known as consensus protocols, which guarantee user cooperation and network security. In other words, the DAO won’t be “captured” by a single individual or centralized entity, which would allow them to alter its laws. In such a community, no single person has authority, and everyone can be trusted.
Decentralized finance (DeFi)
Decentralized finance (DeFi) tools, which transfer money or asset values between accounts, is another product that DeSoc advocates are betting on. Users can securely and publicly lend to one another, tokenize their assets, invest, trade crypto assets, and interact in a number of ways with such tools.
New economies and business models can be created as a result of this strategy. For instance, advertisements might abandon the practice of selling user information to marketers in favor of rewarding users with tokens for viewing ads. This type of application is built on the Brave browser and their Basic Attention Token (BAT).
The main goal of Web3
The primary issue with the Web 2.0 system is centralization: the flow of user data goes through a select group of businesses and is then freely used by them for their own gain. Because new initiatives rely on the Internet’s established infrastructure and frequently mimic centralized institutions, along with its conventions and restrictions, Web 2.0 continues to dominate Web3.
However, Buterin, Weil, and Orhaven describe the possibility of a “pure” Web3 that extends to all of social life, which can put the management of a person’s reputation and data in their own hands and strengthen the institution of reputation itself. The authors expect DeSoc to increase the role of trust and self-organization of people instead of the current social distancing:
“Simply building on trust and cooperation is not enough. Correcting for biases and tendencies to over-coordinate (or collude) among trust networks is essential to encouraging more intricate, diverse relationships that span greater social distances than before. We call this ‘Decentralized Society (DeSoc)’: a co-determined sociality, where Souls and Communities convene bottom-up, as emergent properties of each other to produce plural network goods across different scales.” – quote
Criticism of the concept
The concept of a decentralized society built on blockchain faces criticism from a variety of angles: from a simple comparison of an idea with a local “fashion trend” to a balanced argument in terms of energy or psychology.
The energy expenses associated with operating decentralized systems are the first major barrier standing in the way of DeSoc. Bitcoin uses more energy than certain small but industrialized nations like Switzerland, and Ethereum is already close to reaching its capacity. The expenses may multiply many times over if every action and information release on the Internet were to be recorded in the blockchain. Considering electricity prices and upcoming potential energy crisis, this could become a serious issue.
The second issue is the trust of the masses. Only when “decentralized” applications and processes become more affordable and practical than current ones and earn trust, the shift to Web3 can occur. SWIFT and electronic signatures may someday be replaced by blockchain-based information sharing, not because the blockchain is “in trend,” but rather because it may become more useful and secure. However, these systems are still more expensive than traditional ones and can be too sophisticated and confusing to most users when used outside of a professional setting.
It is still to be seen how the network’s social and financial relationships develop. The authors of the paper call on everyone to participate in decentralized finance, join blockchain technology, support the system of developing decentralized societies, and build reputation in their Soul in the form of NFT coins.