Can We Build a Post-Feudal Web 3?

By March 12, 2020DApps
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Twenty-first-century digital technology is rarely discussed in terms of eleventh-century political systems, but sometimes it’s the comparison we’re forced to make. Today, the creators of platforms for blockchain-powered, decentralized apps claim that they are building a more open, democratic, and fair digital future. But, instead of implementing positive change, have they merely revived feudalism for the internet era?

Most decentralized applications, “dapps” for short, rely on a much larger pre-established “main chain” in order to process transactions. The main chain was not built with any particular dapp in mind, but each and every decentralized app relies wholly on the continued desire of the main chain to collect fees. And, just as serfs could do nothing to effect real change on the lands they didn’t own, developers of decentralized apps have ceded their power to an unworthy sovereign. As quickly as a petulant king or aggrieved noble could banish serfs, main chains can wreck any peasant’s dapp.

Much like the serfs, developers don’t have any say or ability to appeal any main chain decisions that may lead to their project’s demise. A medieval serf was “free” to farm the land they lived on, but they would be punished if they failed to turn over a portion of the crop, let their fields lie fallow, or devised a new use for the acres that weren’t really theirs. Much like how serfs had to pay tribute to the lords or nobles who owned the land, third-party projects built on smart contract platforms don't own or have a say in the platform, and must pay volatile fees (in that platform's coin, rather than their own native currency) to the network every time they want to conduct a transaction or process a line of code.

Kings and princes and nobles are always outnumbered by their peasants and serfs. In the blockchain space, the greatest dapp king by far is Ethereum. At present, 2,667 dapps run on the Ethereum network; all of them are, according to feudal logic, second-class “citizens” of the chain. The developers of a particular dapp depend on Ethereum’s whim: If the individual application’s code needs to be updated, the dapp developers must wait for de facto approval from their majesty, Ethereum. This situation is bad enough in principle, but in practice, with the developers of thousands of apps all clamoring for attention to specific needs, it becomes plainly insupportable.

Even should every dApp developer be satisfied with the state of their own code and their particular chain, the speed of the main chain remains a problem. Ethereum processes around fifteen or twenty transactions each second; Visa processes exponentially more, about 45,000 every second of the day. Ethereum’s speed wouldn’t be enterprise-appropriate for a single dapp, much less for 2,000. As history shows, when developers continue to swear fealty to the Ethereum chain, and dapps begin fighting for space on the main chain, the transaction bottleneck only grows. Finally, there’s the question of posterity. The feudal era ended; there are no absolute monarchs around in the twenty-first century. If Ethereum goes the way of the Capetians, Stuarts, and Plantagenets, what becomes of the apps that rely on it to function?

Some blockchain projects have recognized the problems of Ethereum and other single-chain entities. Unfortunately, whatever they might claim, their solutions remain incomplete. In some cases, each dapps or enterprise client has their own individual blockchain. These individual “parachains,” however, usually must remain subordinate to a Relay Chain that still lords over the lesser chains, which must defer to the Relay’s say. Other projects toss feudalism in favor of anarchy: Developers are on their own and must “bootstrap” security. For some developers, this is an exciting proposition. For mainstream enterprise and risk-averse CIOs, it’s a nightmare.

Businesses today recognize that blockchains can improve productivity, save on cost, and streamline processes, but every business has its own needs and desires for a blockchain implementation. A healthcare company might emphasize HIPAA data protection on its blockchain, for example, while a food and beverage company must devote itself to recording the provenance of every food item in its supply chain. Then there’s the matter of updates and changes: What corporation will want to be hostage to the whims of an unaffiliated developer community? Enterprises need flexibility on their blockchains, and flexibility requires self-determination.

Mainstream enterprise adoption of blockchain and distributed ledger technology is on the way: The advantages it offers corporations are too powerful to ignore. The abolition of historical feudalism made the world wider and inaugurated a world of change and progress; the end of blockchain feudalism, in favor of a more self-sovereign, decentralized future, will do much the same for twenty-first-century technology.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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