Understanding Crypto 15: Prof. Vili Lehdonvirta: Cryptocracy: The Obfuscation of Power

Today, we speak to Vili Lehdonvirta, Professor of Economics, Sociology, and Digital Social Research at the Oxford Internet Institute at the University of Oxford. Professor Lehdonvirta is a social scientist whose research focuses on ways digital technologies are reshaping the organization of economies, including their associated social effects. He is also the author of two books, Cloud Empires and Virtual Economies, which provide readers with an in-depth look into the power that crypto platforms hold and a well-rounded characterization of digital markets. In this episode, we talk about the ideological underpinnings of crypto and the role of governance in making cryptocurrencies possible. We discuss the role of states in scaling markets, how states and platform companies differ, the impacts of smart contracts on governance issues, and how control and power are centralized within crypto markets, as well as the social implications of blockchain technology. Listeners will also learn about past controversies within the crypto space, why people are still needed within crypto, and the blockchain paradox, plus more!

Key Points From This Episode:

• We start by learning about John Perry Barlow’s vision for cyberspace. [0:05:06]
• Find out about the role that states play in markets. [0:07:03]
• How markets function at scale if the state is not involved. [0:07:55]
• Professor Lehdonvirta’s view on whether governance may precede markets. [0:08:59]
• The role massive platform companies play in today’s economy. [0:09:44]
• Ways in which states and platform companies differ. [0:10:42]
• Why he thinks public blockchain technology has garnered so much attention. [0:11:27]
• An explanation of the influence John Perry Barlow’s vision had on cryptocurrencies. [0:13:04]
• Learn what a Kleroterion is and the role it played in Athenian democracy. [0:14:01]
• Professor Lehdonvirta shares what it means to ‘trust in the code.’ [0:17:05]
• An outline of the new properties smart contracts created. [0:18:59]
• Social and economic implications of unstoppable censorship-resistant contracts. [0:21:08]
• A brief rundown of how impactful smart contracts have been. [0:22:27]
• How the trustless and unstoppable claims of cryptocurrencies and DAOs were affected by the DAO story. [0:24:20]
• Whether the Bitcoin block-size conflict affected the perception of crypto as a trustless system. [0:28:17]
• We find out the current size of the Bitcoin development team. [0:31:05]
• Other examples of human discretion affecting the direction of Bitcoin. [0:31:46]
• Professor Lehdonvirta explains the strategies used to preserve trustlessness after the human interventions took place. [0:35:16]
• Details about an important strategy: the appeal to technical expertise. [0:38:53]
• Find out if the ability to fork blockchain networks restores trustless claims of crypto. [0:39:42]
• Whether users of a blockchain network, who are not miners, can influence crypto markets. [0:45:02]
• Professor Lehdonvirta’s opinion on who has the most control over cryptocurrency networks. [0:49:35]
• Hear what aspect of Athenian democracy Nakamoto failed to replicate. [0:54:26]
• We learn what the blockchain paradox is (also known as the governance paradox). [0:56:50]
• Find out if Professor Lehdonvirta thinks technology changes the fundamental aspects which shape how societies are organized. [01:00:11]
• Find out if blockchain has eliminated the need for nation-states. [01:02:11]
• What cryptocurrencies have accomplished since their inception. [01:03:40]