All new money that comes into existence does so as debt. People talk vaguely of “printing money” and the problems associated with it, but that has not been a helpful shorthand for many decades. The fact is, new dollars are made by being loaned into existence. The Federal Reserve loans them out to its member banks, then those member banks loan them out to their customers. Thus, banks are the gatekeepers of all money. Through their lending, they decide how much is created. Even the government has little influence on this. Banks also loan money to the state, and in doing so hold future generations hostage.

This pyramid of wealth and power — dominated by the few at the top — has failed and is beyond reform. This failure is not rooted in superficial issues such as politics or governmental regulations; the failure is an inherent structural feature of the connections between the state, politics and business. These inherent flaws are so severe that it’s really a miracle the system has taken so long to fail. But it is failing, and fast.

Cryptocurrencies as equity-based systems provide the first fundamental steps towards the money of the future; where new coins are minted into existence as equity, not debt. New cryptocoins aren’t owed to any central authority as soon as they are created. In fact, they are created without the need for a central mint at all. They are apolitical and not governmental owned, not based on debt and non-discriminatory. They are in the hands of the people. Freedom of money and freedom of banking, with no government or semi-private banking cartels involved.

At least in theory. But the first-generation of cryptocurrencies has not lived up to its promise.

How Current Cryptocurrencies Are Limited
Today’s major cryptocurrencies such as Bitcoin and Ethereum have some inherent flaws. These industry-wide limitations can be fixed, but this first requires us to accurately identify the problems.

For Bitcoin and Ethereum, two of the most well-known cryptocurrencies, these problems include:

1] Excessive transaction fees

2] Excessive resource requirements

3] Slow transaction times

4] Protocol centralization due to the influence of mining pools

5] Excessive energy requirements for security

6] Inability to provide on-chain microtransactions

7] Centralized decision power over block creation

8] Inadequate incentives for individual nodes

9] Less trustless than originally conceived

10] Poorly thought out smart contract design (Turing completeness is mathematically interesting but provides limited practical benefits in exchange for enormous security and operating issues)

The Solution: Hydra
With Hydra, we at Libertaria are working to fix these problems by building a better system: a connected system of distributed ledgers with a next-generation consensus mechanism and no wasted energy. The idea of cryptocurrency as digital gold used to store and transfer value will be kept and optimized to provide better monetary policy. At the same time, the wider network will support any and all other types of cryptotokens which communities might desire. By keeping them linked but distinct, we avoid the problems of the one-size-fits-all approach taken by the current leaders in the crypto market. Cryptocurrencies allow us to create a free market of monetary systems, allowing individuals to freely choose which best suits their needs.

With Hydra and Libertaria’s other P2P economy technologies, communities will have the ability to design a sustainable system that is neutral, trustless, permissionless and is not skewed toward arbitrary hierarchies — a system that works from the bottom up and transfers production of equity and wealth back to the hands of the people. Value will be created without any connection to a fiat-backed system.

The money of the future should be transparent and mathematically regulated based on contracts or community charters. Changes to monetary policy will be made by all participants via a governance system and not by the few at the top who luxuriate in ivory towers making thoughtless decisions which have repercussions for generations.

We have just released our Hydra vision paper, which provides a more in-depth explanation of the philosophy behind Hydra, the problems we hope to solve, and a vision of how Hydra will ultimately work. You can download it from our website at https://libertaria.world

Our teams are currently working on the technical details and we expect a white paper to follow in the next two months as we create prototypes.

Hydra and the P2P Economy: Fixing Our Broken Monetary System was originally published in Libertaria on Medium, where people are continuing the conversation by highlighting and responding to this story.

The combination of robust communications infrastructure and affordable and powerful computing devices means we are finally at the stage where global decentralized networks can match or surpass centralized systems in terms of scale and power. And thanks to the open source movement, these technologies are themselves decentralized, making them resistant to control, disruption and manipulation. At a user level, people’s acceptance of technology and willingness to learn to interact with new systems has never been higher, with almost six billion people worldwide having access to a mobile phone.

And it goes deeper than that. The average person is still unlikely to promote or understand the benefits of decentralization, but they are at least waking up to the problems of centralization, even if they can’t articulate the cause. In just a few years, there has been a huge surge in public discontent at how governments and businesses reap the benefits from centralized economies of scale, all while collecting, exploiting and ultimately failing to secure our personal data.

Combined with the phenomenal rise of bitcoin and other cryptocurrencies, decentralization is now in the mainstream like never before. Admittedly, it’s still treated with confusion, suspicion and often even derision, but when every major news site is running almost weekly articles about cryptocurrencies, it’s clear the genie is out of the bottle.

But for all its new-found momentum, the decentralization movement feels like it might be in danger of stumbling at the final hurdle.

Yes, recent advances in computing and communications infrastructure have helped decentralized technologies become a reality, but centralized platforms seem to be benefiting even more.

Yes, discontent at centralized platforms among regular people is growing, but this doesn’t seem to be translating to any kind of migration. People are complaining, but they’re staying put.

Yes, cryptocurrencies are receiving daily mainstream attention, but the stories are all the same: price talk, more price talk, and endless “So what is cryptocurrency?” guides that are more confusing than helpful. The news is there, but it’s already stale and shows little sign of growing more nuanced.

Ironically, if the decentralization movement does falter, the culprit may be the movement’s biggest success story:

Bitcoin.

A Victim of its Own Success

Bitcoin, and the blockchain in general, is nothing short of incredible. A system that ensures that even unscrupulous users are compelled to play by the rules, it revolutionizes transacting and accounting, promising a global, transparent payment system with no bottlenecks or middlemen.

But as anyone who has actually used bitcoin will know, the reality falls far short of the promise. The wallet and key system is mathematically elegant, but practically off-putting. You pay enormous transaction fees in exchange for transactions taking hours or days to resolve. And far from freeing us from the whims of powerful individuals or groups, the battle between the mining pools and wealthiest token holders is proving just as destructive as any bricks and mortar banking scandal, just without the safety net of government oversight or regulation.

In fact, the only regard in which bitcoin can be considered an unqualified success is that it’s made a lot of people a lot of money.

But it’s that very particular success that’s the heart of the current problem. With the scent of money in the air, the vultures have descended. They don’t care about decentralization, they don’t care about blockchain. They don’t even understand it. They don’t want to understand it. Their motivation is the same as everyone who is already rich: they want to get richer. And there’s no shortage of people happy to oblige. Even the few people who started off with strong principles have found themselves swayed by the siren song of vast riches.

In the frenzy around the massive increase in the value of bitcoin, people are rushing to hitch their wagon to blockchain in whatever way they can, no matter how flimsy, whether or not a project actually needs to be decentralized, tokenized or have its data publicly recorded in a blockchain.

People who compare bitcoin to the Dutch tulips don’t understand bitcoin OR bubbles, but there is a very real sense in which this current gold rush is unsustainable. People are greedy, but they’re also suspicious, and they know when something is too good to be true. Look how quickly people bolted from the recent Bitcoin Cash price surge, a move which now seems to undeniably have been an orchestrated manipulation by a few very powerful crypto owners.

Exactly the kind of abuse of power and resources that decentralized technology and philosophy is trying to stamp out.

Even if it wasn’t deliberate, and the price jump really was a reflection of a shift in the ongoing debate in whether bitcoin’s true utility is as digital cash, digital gold or something else entirely, the huge swings in value meant that investors were spooked and the money poured out of Bitcoin Cash almost as quickly as it poured in.

At the moment it doesn’t matter which side of the bitcoin vs Bitcoin Cash debate is right: Those are not graphs of anything useful.

Ethereum

So what would a useful token look like? Well for one thing, its value would be relatively stable. To be useful, tokens need to provide utility commensurate with not just their current value, but also their potential future value. Whatever a token is used for, whether it’s transacting or voting or running programs on the big decentralized world computer one line at a time, the act of using it means you can no longer sell it, because using the token means it leaves your wallet.

People don’t mind there being a cost to use things. But they really hate missing out on increases in value. No-one is going spend tokens to vote in a decentralized governance system or notarize official documents in an offline storage system if they could do nothing with them instead and watch them increase in value by 10 or 20% overnight. If tokens are ever going to be truly useful, people have to not feel like they’re missing out on huge windfalls by using them. For that, the price needs to be stable.

Is there anything that fits the bill here? There are certainly lots of coins with relatively stable prices, but they usually have limited value and very low market caps. It’s important to distinguish between stability and flatlining. In fact, the only token which really seems to buck the trend here is cryptocurrency’s other, slightly more modest success story: Ethereum.

In previous articles, I’ve been less than complimentary about Ethereum, especially the proliferation of ERC20 tokens. The idea of all these apparently different tokens actually sitting on the same chain always seems like a textbook definition of a centralized bottleneck. But it can’t be denied that, unlike any other token, people are mainly using ether for something other than speculating on its value. That’s a huge improvement over bitcoin.

It’s important not to overstate the success of this. Ethereum was pitched as a world-changing decentralized computer, but what it’s become is a repository for tokens to power ICOs. So once again a decentralized technology has been corrupted and diminished purely for the pursuit of wealth, and it’s very possible that the only reason Ethereum seems to be immune from the whales’ market manipulation is because they have too much locked up in ERC20 based ICOs to risk screwing with the platform that supports them all.

But even though ICOs, at least in their current form, are a far cry from the promise of decentralization, the case of Ethereum is still notable. The question is how to take this kernel of success and transfer it to another project, one whose tokens have real utility beyond supporting the current investment boom.

In fact, some would argue that this has already started.

(F)Utility Tokens

On July 25th 2017, the US Securities and Exchange Commission issued an excruciatingly unclear and unhelpful report and investor bulletin on ICOs.

In the aftermath of this, many projects have begun to insist that their tokens are “utility tokens”, tokens which are primarily designed to be used within a system and which are not intended as investment vehicles.

This could be seen as evidence that the shift to more varied and useful tokens has already begun, and my complaints in this article are just impatience. Yes, the crypto space moves incredibly fast, but it’s unreasonable to expect new useful tokens to spring up overnight. Despite raising millions of dollars upfront, crypto projects are still beholden to the usual cycle of development, testing, release, adoption, etc. Maybe in six months as these project mature, we’ll see a whole new generation of truly useful cryptotokens that puts all my concerns to rest.

But I wouldn’t bet on it.

You only have to read the latest round of white papers or talk to people at any of the many ICO conferences that have sprung up overnight to understand that the shift to utility tokens is just preemptive semantics to avoid legal repercussions down the road. 90% of people are in the ICO game for the money, and they don’t care if their greed brings down the whole of crypto, as long as they get their piece before everything collapses.

(And the utility token gambit probably won’t even work. The harsh truth about going toe to toe in a legal battle with government institutions is that it’s not enough to be right. You have to be so obviously, staggeringly right that they don’t even bother you in the first place. If the case makes it to court, it will cost you so much to defend that you’ll be bankrupt before it even reaches a verdict. Sticking a couple of lines of disclaimer at the end of a white paper isn’t going to cut it.)

Which is not to say that every new crypto project or ICO is pointless. There are many good ideas out there, and the rushed nature of ICOs mean there will be many projects that turn out to be good despite currently seeming half-baked. But even if we’re genuinely seeing a new wave of useful crypto tokens, the overwhelming influence of bitcoin makes it very hard for these projects to thrive.

It’s difficult to convert bitcoin back into fiat, especially if you want to avoid having your private data harvested by centralized authorities, but it’s trivial to convert bitcoin into other cryptocurrencies. So when bitcoin plunges, the whales retreat into other coins, increasing their market cap by several orders of magnitude overnight. The whales don’t care what those projects are: they’re just a temporary safe harbor during the storm. But for the people genuinely invested in the utility of those projects the effects are devastating. Remember, people only use tokens if they’re confident they’re not missing out on huge increases in value. If bitcoin money floods in, even if it’s only for a few hours, any utility those tokens once had is obliterated as they become nothing more than a temporary store of bitcoin value.

And even when bitcoin is relatively stable, other tokens aren’t safe. “Pump and dump” groups, presumably unhappy with their mere 5% daily gains in bitcoin, make their money by artificially inflating the value of coins and then quickly leaving again.

And that’s just what’s happening when crypto is thriving. If (whisper it) bitcoin really does see a proper crash, the repercussions for every other project will be seismic. If bitcoin goes, is the rest of the crypto market really stable enough to survive, or will everything collapse like a house of cards?

A Solution?

So what should we do? What can be done to inject some essential stability into the whole crypto ecosystem?

Given the politics of many in the field, I suspect a common answer would be: “Absolutely nothing”. Decentralization is about dismantling centralized control and regulation, and many would claim it’s important to let market forces do their work as a matter of principle. Yes, there will be blips and corrections, they’ll say, but eventually everything will settle in its proper place and find its proper value.

It’s hard to understate the naivety of this position.

First, crypto markets aren’t operating in a vacuum. There are powerful outside forces at work, and this means that regulation is inevitable in some form or another. What isn’t inevitable is the kind of regulation we end up with. If crypto can get its act together quickly and present to the world a variety of different tokens with different values and uses, then the regulation, when it comes, will be much kinder than if crypto is still a free-for-all Wild West dominated by flimsy ICOs and an ideological price battle between bitcoin and Bitcoin Cash.

Second, the huge chasm between bitcoin and everything else may mean it’s too late for market forces. Market forces are a good way to nudge back towards an equilibrium, but there’s less evidence that they can correct for potentially market breaking disequilibria.

Finally, the “leave well alone” argument would be a lot more compelling if people weren’t manipulating prices and markets on a daily basis, at which point “leave it to market forces” starts to sound at lot like “leave us to rig things in peace or else”.

This all sounds pretty dire. If the markets are in the hands of the miners and the major token holders, what hope is there of making a useful correction before the regulators step in and hamstring everyone?

Ultimately, the only solution is to try and change regular people’s attitudes to crypto in general. Once people see a blockchain-based tech that has changed people’s lives in a way they understand other than just suddenly getting rich, they will be more willing to accept the promise that this is a useful technology with world-changing potential.

At Libertaria, we’re creating decentralized technologies to help communities of real people all around the world. Over the coming months, in addition to showcasing use cases for this technology, we’ll be highlighting the stories of real people whose lives have been changed by blockchain and other decentralized tools. We’ll also be showing you how crypto and decentralized technology might help you and people you know, in ways that having nothing to do with the price of bitcoin. In doing this, we hope to raise awareness of one of the greatest technological advances of our lifetimes, one which is in real danger of being dismissed before it’s had the chance to show its true potential.

If you’re interested in learning more about Libertaria technologies or the practicalities or theory of decentralized living, there are lots of ways to get involved. Sign up to the Libertaria newsletter, follow this blog or the Decentralized Society Blog, or come and join us in our Discord. We hope you’ll join us on our decentralization journey!

Beyond Bitcoin was originally published in Libertaria on Medium, where people are continuing the conversation by highlighting and responding to this story.

Yesterday, Markus wrote about the philosophical underpinnings of the Libertaria project, and our focus on bringing blockchain and other decentralization technologies to communities. Today, as the technical coordinator of the Libertaria project I’ll be providing a similar overview, but from a slightly more technical standpoint. Note that this is still just a broad overview of the technologies we are building. Readers interested in the full technical details should take a look at the technical papers for each project. These are being released over the next two months, starting with the Libertaria white paper next week.

Libertaria is building the tools to make a real decentralized peer-to-peer (P2P) economy possible. We intend to build the full decentralized stack, with no unwanted interference, in a way that’s accessible to everyone, including non-technical users and people with limited resources and technological infrastructure.

This is obviously extremely ambitious, but we have already completed several of the key technologies needed to make this a reality. And by keeping the scale manageable by focusing on serving smaller, like-minded communities congregating around specific use cases, we have the scope to experiment and expand cautiously and purposefully, to ensure our systems work the way they’re supposed to and actually bring meaningful improvements to users’ lives.

The Libertaria network is a stack of three main technologies: the Titania operating system running on hardware nodes, the Mercury framework and the Hydra blockchain protocol. Each project is led by the member of our core team with the deepest understanding of the relevant technology, and as technical coordinator my role is to understand their decisions and make sure they serve the overall Libertaria vision. What follows is a brief explanation of all three projects and how they will fit together.

Mercury

Mercury lays the foundation for the federated Libertaria network by enabling secure communication and offering services on a decentralized network.

Mercury allows users to open P2P communication channels over a network maintained by independent nodes. Clients can connect to these nodes to find other clients and initiate direct or relayed client-to-client communication using this federated non-permissioned network. A content-addressable network (CAN) and a location-based network (LOC) allows users to find each other and the nodes that host their profiles and information shared by them while retaining full control of their personally identifiable information (PII). Our identity system supports multiple, unrelated profiles belonging to the same person to let users separate their family life, professional contacts, leisure activities, etc.

We want Libertaria to be usable by as many people as possible. Therefore, many clients are expected to be mobile devices with weak hardware or limited batteries. In current attempts at peer-to-peer communication networks, the large number of open connections to other peers can consume a significant amount of resources. We address this by opening only a single connection to the profile server, and sending most communication through this connection.

The Mercury network will be:

• open, so anyone can add or shut down a node they own
• reliable, so it tolerates node failures or network problems
• trustless, so the system is self-validating
• robust, so it is prepared for malicious nodes
• permissionless, so anyone can join or leave

But Mercury doesn’t just provide basic communication. The Mercury protocol provides the foundation for any kind of decentralized app (dApp). dApp developers can easily build apps that are private and secure from the outset without worrying about the stability of the network or excessive battery use caused by constant sending and receiving actions between the connected smartphones.

Current Status: Mercury currently has a complete functional implementation with prototypes of dApps. We are planning to add implementations in other programming languages of the different components and will incorporate changes to the protocols based on real-life usage. We are currently improving the documentation of the APIs to attract more community developers.

Titania

Titania is our custom operating system designed to be installed on various devices, including smartphones, old devices and IoT appliances. We envision a large network of small, low-wattage devices that Libertaria communities all around the world will set up, install and use to connect to each other. Titania makes it easy for anyone to have their own network node at home without running a PC all day or running through a technically demanding initial configuration, although naturally power users will be able to fully customize their devices. With Titania, nodes will be securely deployed to our P2P Mercury network in a very easy, convenient way. The user has full control over their own node and can connect to it via their smartphones.

Titania Boxes are a specific implementation of the Titania OS on Raspberry Pi and Banana Pi devices aimed at people who have minimal technical expertise, limited resources or are in parts of the world with limited infrastructure. The Titania Boxes are designed to be as close to turnkey as possible, with a minimal, intuitive setup allowing users to customize their node for their requirements by answering a few simple questions.

Current Status: The first prototypes our customized embedded Linux operating system are running on ARM-based hardware, running Docker containers for Mercury components and some popular blockchains. We are currently working on an easy-to-use monitoring system that will help power users support less experienced users. We hope to extend our official support to other selected devices in the future, preferably with fully open-source CPUs, network chipsets and printed circuit boards.

Hydra

Hydra is a multichain protocol which supports the decentralized P2P economy built using Mercury and Titania. Communities will be able to easily set up their own blockchain with its own consensus protocol and token, if desired.

Hydra consists of a parent chain and many customizable child chains. The parent chain secures all the child chains, combining the power of all nodes involved in any of these chains. The parent chain can also be used to exchange value between different child chains in atomic swaps, but because these child chains represent local economies, most transactions stay on the individual chains.

All child chains are technically independent, but by being added to the parent chain, the users of the child chain gain access to the complete Libertaria network and its entire user base. We also provide templates of child chains for different purposes. These templates can be easily parametrized to fine-tune the chain for the needs of its community.

Thus the entire network has the security and power of a global blockchain, but the child chains retain the efficiency and privacy of being self-contained networks.

Status: Our team has gained insights and experience from its involvement in many blockchain projects, having contributed to the development of Bitcoin (BTC), Ethereum (ETH), Internet of People (IOP), PivX and BlockStack. We are currently finalizing the design of the Hydra network of blockchains, but there are already proof-of-concept implementations of some algorithms needed by the Hydra network, and we hope to show a prototype of the system in early 2018.

How does it all fit together?

The Mercury framework runs on the Titania OS or any other flavor of Linux. Its components also have binary builds for Windows and MacOS/X.

Users will flash Titania OS to their low-power ARM-based devices or use the ready-made Titania Box to quickly and easily connect to the Libertaria network.

Once their nodes are set up, users will connect to each other through the Mercury framework, form communities, and on top of this build the backbone for what later will be the real decentralized P2P economy.

A new child chain can be configured by anyone at any time. The Hydra project will provide easy-to-use templates that support a variety of common use cases.

People will group around their preferred node types and form self-governed chapters — the communities that Markus talked about in his article — to collaborate in a truly decentralized fashion. As the network grows, DAOs and corporations that are ready to fully commit to decentralization will find a supportive customer base who share their values and are eager to buy their services.

In combination, these technologies should provide the tools for a truly decentralized society.

Who is Libertaria for?

The glib answer is: everyone! We certainly hope that anyone who wants to be part of the Libertaria network will be able to join, because technical and financial barriers to entry are minimized. Nodes and apps are low-power, intuitive to use, can be set up and run on almost any device.

But, more specifically, we’re designing Libertaria with the following classes of user in mind:

• dApp developers: These are people who want to build decentralized Apps on the Libertaria network. They will obviously need some technical expertise, but they don’t need to understand how the P2P network operates specifically.
• Node operators: These are people who want to support the network by running a node, either as a commercial service for end users incentivized by monthly micropayments, or as a favor for friends, family or other community members to dispense with the need for cloud-based centralized systems. Node operators will need some small understanding of the network, but Titania will do most of the heavy lifting here.
• End users: These are people who want to live a more decentralized life by joining communities and using dApps on the Libertaria network. They don’t need to understand how the network works at all; they can simply enjoy the comfort, privacy and security that dApps provide them over the Libertaria network.
• Groups and Communities: These are like-minded people who want to collaborate on a particular project in a decentralized way. Some technical expertise will be needed to set up and coordinate this collaboration, but this will be minimized if their use case fits one of the standard Hydra blockchain templates.

What next?

The project leads of Mercury, Titania and Hydra will be presenting a more in-depth look at each of these technologies over the next few weeks. We’ll also be releasing technical papers for each project and a more general Libertaria white paper. To stay informed, follow our blog here on Medium and sign up for our newsletter. If you have any questions for us, want to know more about Libertaria or want to meet other people interested in decentralization, we’d be delighted for you to join our Discord channel.

Presenting: Libertaria was originally published in Libertaria on Medium, where people are continuing the conversation by highlighting and responding to this story.

That may seem a rather abstract approach, but at Libertaria we know it’s essential to tackle these philosophical problems in tandem with the technological ones.

Still, looking to the future can only get you so far. And designing Utopian systems in a vacuum ignores the fact that conceiving a new and better model is often the easy part: the problem is how to transition smoothly and stably from the current system.

For example, whether you think it’s a good idea or not, it’s not that hard to imagine a transport system populated entirely by fully automated self-driving vehicles, all communicating with each other and overseen by a variety of navigation and safety protocols. The complexity comes in the messy intermediate stages, where the automated vehicles have to safely coexist with human controlled ones. Established systems don’t disappear overnight, and the early transition phases are often the most precarious.

Decentralization comes with the added problem that often it’s the systems and actors we hope to improve or replace which benefit most from new technologies. The very fact that they’re established gives them the resources and the widespread acceptance needed to adapt the new technology for their own ends, while new or radical approaches are looked on with disdain, suspicion or even outright fear.

Libertaria has strong philosophical underpinnings, but we also realise the need to be practical. There’s no point dreaming of a future that cannot be reached. We may dream about our own Libertopia, but we have to be realistic and implement Libertaria.

So in that spirit, today I want to look to the present and assess the current status of technology when it comes to decentralizing the four pillars and society as a whole. Are we any closer to decentralization, or is the dream further away than ever?

Finance

Let’s start with finance, as this is where you’d expect to see the most progress. People have dedicated a lot of time and energy to decentralizing finance, and with good reason. The problems with traditional centralized systems are well documented, with near daily stories about data breaches compromising users’ financial information.

Finance is also the context in which blockchain, one of the key decentralization technologies, is most commonly talked about. If people have heard of blockchain at all it will be in the context of Bitcoin, and the limited (and always inaccurate and misrepresentative) attention that blockchain receives in the media is almost all about Bitcoin and what it means for traditional finance. Online coverage is often more accurate, but the focus is still firmly on finance, with other applications of blockchain seen as niche or a long way off. In online communities, a huge majority of the dialogue revolves around token value.

But for all our talk, our best attempts to decentralize finance haven’t fared well. The ASIC race has seen Bitcoin become increasingly centralized, with a handful of mining pools dominating control of the network. Attempts to address this by replacing proof of work with other consensus protocols are promising, but still largely untested.

From an individual perspective, it is still incredibly difficult to separate yourself from established financial systems. Cryptocurrencies are mostly bought on platforms that are centralized and require personal information for transactions of any meaningful size. You always have a public entry point, and if that entry point is known, the transparent nature of blockchain ledgers means your transactions may actually be more visible than under traditional systems. Unless you’re lucky enough to be paid in cryptocurrency, it’s almost impossible to acquire them privately. Platforms like LocalBitcoins attempt to address this, but they do not scale and are banned in many countries, paradoxically making it harder for cryptocurrencies to escape from their unfair associations with illegal and immoral activity.

As for security, cryptocurrencies may be theoretically more secure than entrusting your data to centralized systems, but practicalities matter. For the vast majority of people, using crypto is still cumbersome and fraught with risk.

I don’t want to understate the massive achievements here. Bitcoin and other cryptocurrencies are incredible achievements, but there’s still a long way to go before we reach anything close to true decentralization. To address this, Libertaria is developing its own Hydra blockchain protocol, which will be fully integrated with the other parts of our network. By tackling the problem holistically from the outset, we hope to resolve a lot of the problems we’ve seen so far in this area.

Communication

The problems of centralized communication are getting more widespread attention. Facebook and other centralized communication platforms are losing some of their sheen as people realize how their data is being horded and sold.

But even though people are growing suspicious of the social media giants, this has not translated into any noticeable migration away from the platforms. With no viable alternative, most people have viewed recent data scandals with a resigned indifference.

Encrypted communication (WhatsApp, Telegram) is a noble attempt to restore privacy to users, but the data still travels through different servers outside of the users’ control. There are also persistent rumours that these services are compromised at the behest of state actors.

But some projects have made good progress on a truly decentralized solution.

Tox Messaging has found a good solution for P2P messaging, but like every other P2P messenger it has battery life issues on smartphones. Users are also bound to this specific application, so you can only receive and send messages from and to Tox applications.

Blockstack has a web-based solution for a decentralized internet by providing a special browser with web apps. But the browser is still at an early stage, which presents obstacles for users without good computer knowledge. There is currently no mobile version, although one is promised. But from experience it seems certain Blockstack’s mobile version will suffer the same battery life issues as Tox.

Libertaria is ahead of the field here. Our Mercury protocol is truly decentralized and the method by which the P2P connection is established minimizes resource use, making it viable for use on mobile phones or other lower power devices. Mercury will also support all kinds of decentralized apps.

All in all, then, communication is one pillar in which we’ve made great progress, although the problem of mass adoption is still enormous.

Production

Although privacy and control issues receive the bulk of attention in decentralization circles, centralized production may actually be the biggest problem we face. The ability for companies to easily create and manage the logistics of global supply chains has transformed every aspect of our lives. For many of us in wealthy countries this change can seem positive: over the past few decades globalization has given us cheap and easy access to food, products and services that would have been unimaginable a few decades ago. But the system is out of control. Millions of people across the world find themselves in an impossible situation, unable to make a living outside of the system, but barely making enough to live if they choose to work within it. Almost every product we buy has someone living on just a few dollars a day hidden somewhere at the start of its supply chain.

And once again, the decentralization tools that currently exist are likely to make the problem worse, not better. Smart contracts will help global corporations automate complicated logistics processes and become even more ruthlessly efficient. True, in theory the marketplace is opened up for smaller operations to connect and transact, but in practice only the existing behemoths will have the resources to pay the gas prices to force their contracts through the network.

But there are some rays of light to illuminate this bleak picture.

More and more people are seeing the value in buying locally, especially when it comes to food. More and more research is being done on how to create smaller, sustainable local supply chains to reduce our reliance on global shipping. Going even further, projects like Lifecycle are building self-contained units which contain an entire sustainable food ecosystem, which would allow families to feed themselves indefinitely with minimal resource input.

There are also major strides being made with energy. Solar panels and turbine technology have improved massively in recent years, making off-grid living a viable option for the first time. There are also several blockchain projects hoping to make community energy possible, allowing communities to share energy locally without relying on inefficient interactions with national grid systems.

Finally, projects to tokenize natural resources using blockchain technology will hopefully provide people access to new sources of income while encouraging them to live more sustainably.

Law

Law is the hardest of the four pillars to decentralize, so it’s not surprising that there has been limited progress here. There are several projects attempting to use blockchain technology to improve governance, but this is mostly in the form of improvements to existing centralized systems, such as a proliferation of projects aiming to improve vote transparency using the blockchain.

In decentralized projects, there is a dispiriting tendency to handwave governance issues, asserting that thousands of years of human development in this field can be encapsulated through proper use of smart contracts. But the real problem here isn’t the contracts themselves, its dispute management, and this is very difficult to do in a decentralized way.

Some cryptocurrencies like Dash, PIVX or Decred have governance systems to bring decision-making to the whole community rather than having control rest exclusively with miners (like in Bitcoin). But these are “coin-only” projects, concentrated on the development of the currency. These are good and necessary, but without decentralized alternatives to trading platforms for goods and services and/or decentralized communication, the benefits are limited.

Reputation and Identity Systems

Here, sadly, the problem is even worse. Countless projects and whitepapers include sentences like “obviously this will require some kind of reputation system” or “for full security, an identity system will be necessary” but there seems to be very little actual work or research being done in these fields. The few instances of blockchain-based identity systems which have got off the ground are large-scale state-funded projects, once again showing that centralized entities will be the main beneficiaries of these technologies in the short run.

So Where Do We Stand?

It would be unfair to call the decentralization project of the past few decades a failure: we’ve made huge strides, and there are now a variety of amazing technologies which show that decentralized living is not just a naive dream. But it can hardly be called a success, either. You don’t have to look very hard to see that my warning above is distressingly accurate: It turns out that almost every technology which helps the decentralization cause can be co-opted to make centralized systems even more powerful and efficient. Far from being freed, centralization and control of our data are stronger than ever.

But it’s not all in vain. As we’ve seen, there are many projects working on individual parts of the decentralization problem. But more than ever, it’s clear that we need to consider all four pillars of a decentralized society together, to give the best chance that these technologies aren’t co-opted by the very centralized entities they’re designed to disrupt.

Libertaria is the only project working on the full decentralized stack. We’ve looked at the real progress made in all these areas and combined them in a community-focused approach that will give people their first real shot at truly decentralized living, as well as providing major advantages to people who just want to decentralized individual aspects of their lives.

If these ideas resonate with you and you want to learn more, join the Libertaria project by signing up to our newsletter, following us on Medium or joining our Discord channel to talk to the Libertaria developers and other like-minded people.

Decentralization: Where Are We Now? was originally published in Libertaria on Medium, where people are continuing the conversation by highlighting and responding to this story.

Libertaria is a huge project, and it’s going to produce a lot of technologies which are extremely useful on their own.

But the ultimate goal is that people who want to should be able to combine these technologies to live a fully decentralized life.

For a lot of people, that’s going to conjure up an image of adventurous individuals living independently off the grid, like a cyber Swiss Family Robinson, and that’s something Libertaria will fully support! But we’re also imagining something that’s simultaneously more mundane and much more ground-breaking: whole communities, living together in a way everyone would recognize as “normal,” except they are free from any central authorities or control.

In fact, we go further: we imagine a decentralized society based on many of these federated, self-governing communities following shared principles and core values. As long as these principles and values are agreed upon, different communities or chapters are free to follow their own charters, allowing them to adopt any political or economic approach to self-governance.

This is, of course, extremely ambitious. Libertaria is the only project trying to create the full decentralized stack in this way. And extraordinary claims need extraordinary proof, especially in a time where projects are raising millions with just a thinly sketched white paper. Luckily, at Libertaria we’re in a position to provide all this. We already have working prototypes of much of the technology needed to make this decentralization dream a reality.

We’ll be showing off different parts of Libertaria over the next few weeks. For now I just want to give a theoretical overview of the kind of society this technology is being built to support.

There are many ways to approach this problem, but here at Libertaria we’re thinking in terms of the pillars which must all be in place for a society to function. We call these pillars rather than the more traditional layers, because there isn’t a clear hierarchy. Each pillar provides a vital function, and any of them can be built on their own. But if any one of them is missing the whole edifice becomes shaky.

The Pillars

So, what do we need to form a society?

• First, we must be able to communicate with each other, share ideas and decide whether we want to cooperate.
• Next, we need to discuss terms and define the terms of our cooperation.
• We then produce what we agreed to cooperate on, in the way we agreed to do it.
• Finally, we trade and share the goods and the services we have produced, rewarding and supporting everyone who contributed.

Thus, a modern civilized society is based on four pillars:

Communication, Law, Production, and Economy

This is true whether the society is centralized or decentralized. However, to live in a truly decentralized way, all four of these pillars must be decentralized.

Let’s look in more detail at how we can decentralize these four pillars.

Decentralized Communication

Before we can do anything with someone else, we need to be able to communicate. In a decentralized society, this communication needs to be private and not travel via any centralized third-party. There are two main requirements: First, a truly decentralized internet, as it was originally conceived, without ISPs and centralized data hoarding. This will involve peer-to-peer networks like BitTorrent or Libertaria’s own Mercury network. Second, we need strong cryptography so we can trust that our communications can only be seen by the people we want. There are many well-tested options for this, including newer approaches if we’re worried about attacks even from quantum computers.

With these technologies in place, people will be free to communicate with whoever they want, however they want.

The good news is that these issues are largely solved. There are efficiencies to be gained, and mainstream adoption is still a long way off, but the technologies for decentralized communication exist and work well. Our Mercury network already supports truly decentralized chat, and the infrastructure can support almost every kind of app.

Decentralized Law

Once we can communicate freely with each other and need to reach an agreement, we need to be able to rely on common standards that we can choose to form a contract, or define new ones ourselves. We then need to ensure that this contract is enforced.

Here, the current focus in crypto is on the contracts themselves. Various protocols, most famously Ethereum, support so-called smart contracts which automate the maintenance and resolution of contracts. Unfortunately, this is really the least interesting and difficult part of a contractual agreement.

Streamlining the contract making process is certainly an impressive achievement, but what happens when things go wrong? If one party breaks their contract, in theory the cryptocurrency held in the contract can be transferred to the other party. But what if the parties disagree about whether the contract is broken, or disagree about what the contract stipulates in the first place?

The flippant answer is “Write better contracts!”

But flawlessly enshrining a contract in code is beyond the skills of most non-technical people (and most developers, judging by the huge number of bugged smart contracts). If most people are ill-equipped to use a system, that’s a problem with the system, not the users. Most current smart-contract systems will be very useful for large corporations, who have many business processes which can be automated and streamlined in this way, but they will be far less useful for regular people (and that’s even before we get to the gas fees that power the network, which boils down to a simple resource race that only large entities can win).

Ordinary people have complicated needs and will make mistakes and change their minds. Thus there will always need to be some kind of arbitration system, and this is extremely difficult to decentralize. We imagine providing people various choices here, including a choice of adjudicator, a choice of enforcer and even a choice between multiple legal systems.

These ideas may sound radical, but they are not: This is the original way our legal systems operated in the past, before the invention of centralism. Libertaria’s focus on smaller communities will make many of these old approaches viable again, only this time radically improved through the use of technology.

Libertaria is tackling this in its Themis project, which we’ll be writing more about in the coming weeks. This is another area where Libertaria’s focus on smaller communities can pay off: by experimenting with various approaches in different communities, we can see which ones work without jeopardising the whole network. We’ve identified several such communities which can benefit from small-scale implementations of these systems. We’ll be showcasing some of these over the next few months.

Decentralized Production

Centralized production and logistics has transformed our world, in many ways for the better. But many people are ill-served by this system, especially in developing countries, because they either have no choice but to work for minuscule rewards in the early links of the supply chain or they’re forced out of the system entirely.

Decentralized production is important to provide opportunities to these people and others who would like to forge out on their own. Decentralized production can circumvent unfair tariffs and generate wealth, even spontaneously, where and when it is needed, without third-party involvement.

There are two main types of production to consider here: the materials and processes used to create products and the energy used to power these processes. Both can be decentralized, and Libertaria has links with other projects in both of these areas.

Decentralized production would entail decentralized resource cycles. Resources would be used in closed cycles and are reused and recycled. The profit and management of natural resources can also be decentralized. In a few weeks, we’ll be looking at an interesting Romanian project tackling this very issue.

Together, these will allow us to move from single companies controlling huge numbers of underpaid workers to smaller decentralized systems where people can produce their own goods, grow special food and provide services at/from home. People can set up co-working spaces and co-producing firms. As well as empowering people, this will also be better for the environment, as smaller more geographically contained supply chains will encourage efficiency and reduce waste.

People will collaborate to produce whatever they’re skilled at making, but the most important products for a fully decentralized society are food, clothes and building materials.

Knowledge about how to produce these should be public domain, and low-cost tools and solutions should be available for those who want to produce these goods. But with decentralized communication in place, this is easy to achieve.

Decentralized Finance

Finally, we need to be able to trade freely without intermediaries including banks, if we so choose. The financial system is a network of contracts. The people are actors and their transactions are contracts. As you can imagine, given people’s love of money, this is the most well-explored of the four pillars!

While the technologies here are widespread and proven, much has been made of the scaling issues. Bitcoin can handle a mere 10 transactions per second, and the various cobbled together workarounds are only temporary solutions at best. Some sacrifices in speed and efficiency are necessary in exchange for decentralization, but a global transaction network needs to be able to cope with global demands. Otherwise it will only be of use to those who can afford the transaction fees, and we’re back to square one, with those with less power and resources priced out of the system.

Once again, Libertaria’s vision of practical decentralization holds the key. Libertaria’s blockchain protocol is called Hydra, and it’s designed with Libertaria’s vision of federated decentralized communities in mind. By working to support these smaller groups, Hydra provides all the members of the network with the security of a global blockchain while keeping as much of the data as possible within the individual communities themselves.

Tying it all together

So those are the four pillars. But that’s not all we need. To make these systems work completely without central authorities, we need two other important things: trustless identity and reputation and decentralized governance.

As long as these problems remain unsolved, it will be difficult to achieve true decentralization at any large scale, even with the four pillars in place. Libertaria is also working on these issues, and our technologies are designed with these problems in mind, but work is just starting in this area.

Luckily, we don’t need to scale as much as other projects, or at least not in the same way. Many of the communities we’re focusing on are small enough that they can still achieve meaningful results by simply decentralizing the four pillars. Better yet, this will put us in a position to experiment and gauge the true scale of the identity, reputation and governance problems, rather than dealing with them purely theoretically or in isolation, which seems to be the current approach of other projects. We’ve identified specific communities which might benefit from small-scale attempts to decentralize governance, reputation and identity, and we’ll be presenting these as case studies over the coming months.

What Next?

Libertaria is huge, and there’s going to be a lot to see and learn over the next few months. If you’re interested in learning more about our technologies or the practicalities or theory of decentralized living, there are lots of ways to get involved. Sign up to our newsletter, follow this blog or the Decentralized Society Blog, or come and join us in our Discord. We hope you’ll join us on our decentralization journey!

The Four Pillars of a Decentralized Society was originally published in Libertaria on Medium, where people are continuing the conversation by highlighting and responding to this story.

In the right hands, technology can do an immense amount of good. It can give people the tools and resources to free themselves from poverty. It can connect people from across the globe and help them solve shared problems through collaboration. Most importantly, technology can empower people to live free, dignified lives by providing them with a voice and an opportunity to thrive.

But in the wrong hands, these same technologies can be used to divide people and hold them back. Governments and global corporations have carelessly rushed to adopt centralized technology, without considering how it will impact people and society.

At LIBERTARIA, we want to use technology to help build a more just, more decentralized, freer world by giving people the tools they need to govern themselves, build their own economies, and above all protect their individual rights.

It’s a grand vision, but we know we can achieve it. We’ve assembled a team of dozens of talented developers from across the world to build all the technologies needed for fully decentralized communities.

LIBERTARIA is one of the most wide-reaching decentralization projects, a multi-year adventure to create the full decentralized stack, from peer-to-peer communication all the way up to decentralized governance, identity and reputation. We know this is ambitious, but it is no fantasy. Our international team has been working hard in stealth mode for six months and have already finished Phase 1 of our roadmap, slightly ahead of schedule.

As I write this, we have completed working prototypes of our Mercury peer-to-peer communication network and our Titania hardware node, a robust, low-power, smartphone-sized node that will allow anyone to connect to the network, even if they have limited resources or infrastructure.

Coming soon, our Hydra blockchain protocol will let local communities quickly and simply build their own blockchains and issue their own tokens, providing the security of a global blockchain network without the scaling problems and power imbalances that plague first-generation platforms like bitcoin and Ethereum. Finally, our Themis and Fides projects are tackling the problem of decentralized identity, reputation and governance, with prototypes scheduled for 2018.

Over the next few months, we’ll be releasing weekly information about these and other LIBERTARIA innovations, along with case studies showing how blockchain and peer-to-peer technology are not just toys for geeks and investors, they’re already transforming the lives of vulnerable and overlooked people across the world. This starts with the LIBERTARIA team itself: we’ve gathered a truly global team of experts from five continents and over a dozen countries, providing work to developers facing difficult circumstances in countries such as Ukraine and Venezuela.

But LIBERTARIA is not a political or anti-corporate project. In fact, our technologies will support societal and business models from every economic and political school of thought, as well as enabling brand new ones that are only possible through decentralization. The only guiding principle is freedom: freedom to communicate, collaborate and do business without centralized chokepoints.

If these ideas appeal to you, we’d love to have you on board. Join our Discord, sign up to the LIBERTARIA newsletter or learn more about the wider issues surrounding decentralization at the Decentralized Society blog.

We invite everyone to join us. Let’s build a free world, together!

Markus Maiwald,
Founder, LIBERTARIA

Welcome to LIBERTARIA! was originally published in Libertaria on Medium, where people are continuing the conversation by highlighting and responding to this story.