Like the internet, the backbone of Ethereum is its permissionless core. Anyone can go back to a more primitive stage and try sprouting a new limb. But Ethereum is more complex. It allows for the layering of rigid, nearly unbreakable structures in between a voluntary system of agreements. Out of the single spine of the internet, Ethereum combines cryptographically stiff bones and joints with the connective tissue of standards and cultural norms; all subject to the disorderly and competitive process of evolution. And it’s still early, so we have no idea what this thing will look like.
Coins and tokens tend to get all the attention. Everyone wants more money and the modern world is all about incentives. But permissions are more interesting. Because in the context of behavior, permissions are more primal. The social order of animals depends on who is allowed to do what.
Incentives drive human behavior. Permissions set the boundaries. More than incentives, permissions require agreement, negotiation, and sometimes conflict to change. Permissions from the top-down are easy to understand, but from the bottom-up, it’s all about coordination via mob, protest, or vote; or in the case of Ethereum, writing rules in code and having those rules adopted by people who use the code. Democracy allows the masses to peacefully wield the power of permissions. Ethereum is another way.
People rarely question permissions because, historically, there was little one could do about them. It was just the way of the world. But now that we’re building something new, basic permissions must be considered and decided as we layer complexity on top of the permissionless base. Rules and privileges in Ethereum are being set now and to prevent the new boss from being like the old boss, as many people as possible should understand and recognize that every existing permission was set by a person, which means they can be set again by a new person.
A blockchain is a shared history with sets of shared rules, and no single owner. In this digital reality, we can create collectives called Decentralized Autonomous Organizations or DAOs. DAOs can be thought of as group chats with well-defined permissions. At first, this may not sound impressive, but DAOs can hold billions worth of assets, define rules for social networks, and even functioning as its own political party. Permissions can hold and protect power. For example, by permitting some people to spend the DAO’s money, you are protecting this power from being used by others.
A DAO is a framework for group decision-making. They codify permissions. The DAO’s rules are not enforced by any country’s legal system, but in the self-contained world of Ethereum. If we use the analogy of American democracy, Ethereum functions as both the executive branch and the judicial branch. The rules are strictly interpreted according to the code. And the code is automatically executed. The work that remains is in the legislative branch: deciding and agreeing on what the rules should be.
DAOs are a form of self-government. They allow a collective to decide how they want to set hard permissions: strict, mechanical, enduring rules.
The idea of blockchains enabling hardness was first explored and popularized by Josh Stark in an essay called “Atoms, Institutions, and Blockchains”. And hardness is a good mental tool for understanding why crypto matters. Money is at the surface level. Blockchains can give digital tokens certain properties like guaranteed scarcity allowing them to mimic aspects of physical gold. But when you dig deeper, you discover that the complex mathematics of cryptography can also give digital objects, events, and rules a highly durable – or hard – quality. New ways for imbuing hardness or a degree of certainty across time is something we don’t see very often, and something we have never seen in the post-internet era.
A steel door is a good analogy. The metal divides the line between allowed and not allowed. The key gives permission to cross this line and the material itself makes violating this boundary very difficult. What the door protects and who gets the key is what must be decided.
Cryptography is much more like the steel door than most people think. Ethereum is not physically hard. It is logically hard. The rules are enforced by a network of computers that must follow the laws of mathematics. In the same way that you can’t force a calculator to turn 1+1 into 3 without changing its underlying logic, you also cannot give yourself permission to spend a DAO’s money unless you convince most people in the network to grant you this exception to the rules. Breaking a piece of cryptography is in many ways, harder than breaking open a steel door because in this digital realm, we can play with probability in ways that we can’t in the physical world.
The real world is thick with permissions. We have layered up rules and privileges in exchange for order and stability. Walls and gates are everywhere. Keys are not evenly distributed.
What systems like the Internet and Ethereum do is remove the barricades. They create a clean slate without rules. A layer where there is nowhere you can’t go, and nothing can’t do. But this leads to problems. So new walls are put up to make sense of the chaos and keep out the most unwanted behaviors. Disorder turns to order, and back again.
Clean slate. Rules decided by a small group. New people come in. They accept the old rules. New rules are made. But they can’t replace the old ones.Old rules become hard to change. Too much stuff on top.We forget how they got there but still follow.
A small group leaves the old world behind. In the new place, they can try again with a clean slate.
Ethereum makes the idea of starting something from scratch without having to ask for permission – an idea inherent with the early internet, but now rendered impractical by the gated networks of large corporations – a guaranteed right again. Because networks are very useful, there is an incentive to build walls around them. The harder you make it to leave a place where all your friends hang out, everyone speaks the same language, and all your stuff are kept, the more profitable the network is for its owners.
Ethereum is also a network. But in comparison to something like a Facebook or Twitter, ownership is meant to be decentralized, bigger, and more neutral. So instead of a highly defined, rigid boundary with elite gatekeepers, Ethereum is defined by a porous membrane; soft skin able to stretch over increasing mass.
When starting from zero, decisions must be made about what materials to use and how everything fits together. What are the atoms? How can they bind into stable structures to create molecules, and eventually cells? With no single hand guiding the process, builders of these structures must decide for themselves if and how everything connects and interoperates. A standard rule may start from a single person, but to permeate effectively, it must be adopted throughout the network. And when people voluntarily commit to follow the same standard, then a nervous system emerges where information can flow between boundaries.
Standards are not new. They are soft permissions. Like the metric system or Greenwich Mean Time, they allow for a shared reality across space and time. A similar interoperability connects the structures that make up Ethereum, creating a layer of the internet where you can leave a boundary and keep your friends, continue speaking the same language, and take your stuff with you. This is less profitable for an individual company but more valuable to the wider body.
Like the internet, the backbone of Ethereum is its permissionless core. Anyone can go back to a more primitive stage and try sprouting a new limb. But Ethereum is more complex. It allows for the layering of rigid, nearly unbreakable structures in between a voluntary system of agreements. Out of the single spine of the internet, Ethereum combines cryptographically stiff bones and joints with the connective tissue of standards and cultural norms; all subject to the disorderly and competitive process of evolution. And it’s still early, so we have no idea what this thing will look like.