The Crypto-democracy and the Trustworthy

In the current architecture of the Internet, there is a strong asymmetry in terms of power between the entities that gather and process personal data (e.g., major Internet companies, telecom operators, cloud providers, ...) and the individuals from which this personal data is issued. In particular, individuals have no choice but to blindly trust that these entities will respect their privacy and protect their personal data. In this position paper, we address this issue by proposing an utopian crypto-democracy model based on existing scientific achievements from the field of cryptography. More precisely, our main objective is to show that cryptographic primitives, including in particular secure multiparty computation, offer a practical solution to protect privacy while minimizing the trust assumptions. In the crypto-democracy envisioned, individuals do not have to trust a single physical entity with their personal data but rather their data is distributed among several institutions. Together these institutions form a virtual entity called the Trustworthy that is responsible for the storage of this data but which can also compute on it (provided first that all the institutions agree on this). Finally, we also propose a realistic proof-of-concept of the Trustworthy, in which the roles of institutions are played by universities. This proof-of-concept would have an important impact in demonstrating the possibilities offered by the crypto-democracy paradigm.Comment: DPM 201

Conceptualization of a Blockchain Based Voting Ecosystem in Estonia

Demokraatia on iidsete kreeklaste poolt välja töötatud mõiste, mille tähendus on "inimeste valitsemine". Maailm on arenenud sellest ajast kaugele edasi – impeeriumidest kuningriikideni ning lõpuks jõudnud demokraatiani nagu me seda tänapäeval teame. Praegustes demokraatlikes riikides põhineb rahva poolne juhtimine perioodilistel valimistel, mis viiakse läbi otsese või kaudse hääletamise teel. Hääletamisviisid on olnud kuni 20. sajandini ühtsed, kasutades hääletamissedeleid ja füüsilist loendamist. Tehnoloogia ja tehnika on sellest ajast alates olukorda muutnud, juurutades elektroonilised hääletamismasinad, näiteks Indias, ja elektroonilised hääletamisvõimalused Interneti kaudu, nagu näiteks Eestis, mida kasutatakse järjepidevalt. Kuid kõige selle juures jääb midagi ikkagi lahendamata. Peale kandidaatide või valitsuse valimist võivad ja saavad nad oma kohustusi ja ülesandeid täita ebapiisava korrektsuse, vähese või puuduva vastutuse ning järelevalveta. Isegi pärast valimisi võib valitsus olla oma kodanike seas ebapopulaarne, kuid enne järgmisi valimisi ei ole kodanikel võimalust midagi muuta. See väitekiri aitab selle lünga täita värskelt kasutusele võetud plokiahela ja hajusraamatu tehnoloogia kasutamisega ning ka äsja väljatöötatud uuenduslike kontseptsioonide abil.Democracy is an age-old concept coined by the ancient Greeks meaning, ‘Rule by People’. World has come far from that, from empires, to kingdoms to finally democracy as we know it. In current democracies, the exercise conducted to be ‘Ruled by People’ is based up on periodic elections and those elections are conducted via voting, direct or indirect. The ways of voting have been consistent up until the 20th Century with the use of ballot papers and physical counting. The age of technology and engineering since, have brought about changes to the status quo, with introduction of Electronic Voting Machines such as, in India and Electronic Voting via Internet such as, in Estonia which are practiced in every election. But in all of this, something still remains unresolved. When candidates or in turn a government is elected, they are meagre obliged to perform their duties correctly, with little or no accountability and oversight. Even after elections, a government might be unpopular among its citizens, but the citizens don’t have means to change anything, before the next elections. This thesis helps to fill this gap with use of newly introduced technology of Blockchain and Distributed Ledgers, and also with the help of newly conceptualized innovative concepts

SoK: Diving into DAG-based Blockchain Systems

Blockchain plays an important role in cryptocurrency markets and technology services. However, limitations on high latency and low scalability retard their adoptions and applications in classic designs. Reconstructed blockchain systems have been proposed to avoid the consumption of competitive transactions caused by linear sequenced blocks. These systems, instead, structure transactions/blocks in the form of Directed Acyclic Graph (DAG) and consequently re-build upper layer components including consensus, incentives, \textit{etc.} The promise of DAG-based blockchain systems is to enable fast confirmation (complete transactions within million seconds) and high scalability (attach transactions in parallel) without significantly compromising security. However, this field still lacks systematic work that summarises the DAG technique. To bridge the gap, this Systematization of Knowledge (SoK) provides a comprehensive analysis of DAG-based blockchain systems. Through deconstructing open-sourced systems and reviewing academic researches, we conclude the main components and featured properties of systems, and provide the approach to establish a DAG. With this in hand, we analyze the security and performance of several leading systems, followed by discussions and comparisons with concurrent (scaling blockchain) techniques. We further identify open challenges to highlight the potentiality of DAG-based solutions and indicate their promising directions for future research.Comment: Full versio

Proof of witness presence: Blockchain consensus for augmented democracy in smart cities

Smart Cities evolve into complex and pervasive urban environments with a citizens’ mandate to meet sustainable development goals. Repositioning democratic values of citizens’ choices in these complex ecosystems has turned out to be imperative in an era of social media filter bubbles, fake news and opportunities for manipulating electoral results with such means. This paper introduces a new paradigm of augmented democracy that promises actively engaging citizens in a more informed decision-making augmented into public urban space. The proposed concept is inspired by a digital revive of the Ancient Agora of Athens, an arena of public discourse, a Polis where citizens assemble to actively deliberate and collectively decide about public matters. The core contribution of the proposed paradigm is the concept of proving witness presence: making decision-making subject of providing secure evidence and testifying for choices made in the physical space. This paper shows how the challenge of proving witness presence can be tackled with blockchain consensus to empower citizens’ trust and overcome security vulnerabilities of GPS localization. Moreover, a novel platform for collective decision-making and crowd-sensing in urban space is introduced: Smart Agora. It is shown how real-time collective measurements over citizens’ choices can be made in a fully decentralized and privacy-preserving way. Witness presence is tested by deploying a decentralized system for crowd-sensing the sustainable use of transport means. Furthermore, witness presence of cycling risk is validated using official accident data from public authorities, which are compared against wisdom of the crowd. The paramount role of dynamic consensus, self-governance and ethically aligned artificial intelligence in the augmented democracy paradigm is outlined

The private governance of entrepreneurship: an institutional approach to entrepreneurial discovery

This thesis develops and applies an institutional governance approach to the economic problem of entrepreneurial discovery of market opportunities. In doing so it expands understanding of one of the fundamental drivers of economic growth, innovation, and contributes both to institutional economics and entrepreneurial theory. This thesis applies the analytical approaches and theories of institutional mainline economics—including transaction cost economics, entrepreneurial theory, common pool resource management and new comparative political economy—to analyse the governance choices of entrepreneurs in the earliest stages of entrepreneurial discovery. Early stage entrepreneurs face an economic problem of coordinating non-price information about future market opportunities with others, under uncertainty, with non-zero transaction costs. This new contract-theoretic approach to the innovation problem does not emphasise a market failure of a misallocation of investment to innovation activities, but rather emphasises the entrepreneurial problem of the governance of knowledge under uncertainty to discover actionable market opportunities. The main proposition is that it may be transaction cost economising for an early stage entrepreneur to privately self-govern opportunity discovery in polycentric hybrids called innovation commons. This theoretical development is applied to the cases of hackerspaces and the hybrid organisations coalescing around blockchain technology. The role of innovation commons also has implications for the political economy of the institutions of innovation policy. As such, this dissertation has three structural parts—theoretical development, application and political economy—that converge on the theme of the private collective action governance of entrepreneurial discovery. The first part of the thesis theoretically develops a transaction cost economics approach to entrepreneurial discovery of market opportunities. The first contribution is to shift the conventional choice-theoretic market failure analysis of the innovation problem—which focuses on allocation and investment of innovation resources—to a contract-theoretic analysis, which focuses on the entrepreneur and the transaction costs they face. In the earliest stages of entrepreneurial discovery the primary economic problem facing the entrepreneur is coordinating distributed, uncertain and non-price information to reveal actionable market opportunities. Given the information proto-entrepreneurs require to solve their economic problem is distributed about the economy in the minds of others, and that coordinating this information faces non-zero transaction costs, the proto-entrepreneurial innovation problem is primarily a comparative institutional governance problem. Given that the structure of transaction costs shifts throughout an innovation trajectory—as the economic problem moves from one of discovering opportunities to exploiting those opportunities—so too may the economising governance structure. As proto-entrepreneurs begin to solve their economic problems and market opportunities become clearer, their level of structural uncertainty falls and the potential for opportunism over quasi-rents increases—that is, there is an entrepreneurial fundamental transformation. The second contribution is to introduce and define a potential transaction cost economising governance solution to these earliest stages of the proto-entrepreneurial problem. The innovation commons are introduced as polycentric collective action governance structures where proto-entrepreneurs coordinate distributed and uncertain information to whittle away uncertainty over potential market opportunities. The theoretical characteristics of these innovation commons are predicted to be transaction cost economising in the beginning of new industries and technologies, where structural entrepreneurial uncertainty is highest. This new type of innovation commons is compared to existing physical and knowledge commons, revealing several unique institutional behavioural characteristics. Innovation commons are predicted to only be transaction cost economising for a temporary period of time because they process uncertainty and in doing so their success may instigate their decline into other institutions of firms and markets. Further, an innovation commons is not an economy-wide phenomenon, but is rather likely to emerge around new technologies and industries, where there are potential gains from trade of non-price coordination with other proto-entrepreneurs. The second part of the thesis applies this theory to the private governance of entrepreneurial resources, demonstrating that proto-entrepreneurs are privately governing early stage entrepreneurial resources under collectively developed governance structures—in both hackerspaces and around blockchain technology. An analysis of secondary data of the governance of hackerspaces reveals micro-institutional mechanisms including graduated social ostracism, costly signalling to facilitate ordering, reputation-based coordination, and nested hierarchies of rules. The analysis also reveals that hackers are at least temporarily choosing to secede from other institutions of innovation, including innovation policy, to solve their economic problem through private governance rules. The second application is to the nascent but potentially general technology, blockchain, revealing collaborative private governance structures including hack-a-thons, embassies and conferences. A higher order institutional explanation for the emergence of blockchain innovation commons is also proposed. The process of crypto-secession creates a new decentralised society called the crypto-economy, which, when seen from the perspective of new development economics, the core problem facing blockchain proto-entrepreneurs is to coordinate non-price information about the institutional complementarities of blockchains to develop ‘protective-tier’ institutions. Because there is no sovereign state, the development process for the crypto-economy must be privately governed by entrepreneurs, and providing a higher order explanation of blockchain innovation commons as examples of private economic development. The third part of the thesis develops a subjective political economy framework, and then applies the framework to understand the political economy of the institutions of innovation. The institutional possibility frontier (IPF) framework is extended to incorporate the notion of Austrian subjective costs into institutional choice. Subjectively perceived institutional costs imply that each individual subjectively perceives their own space of cost minimising institutions. This subjective political economy framework demonstrates the choice by the proto-entrepreneur to govern their economic problem within polycentric innovation commons. The institutional choice to enter the polycentric innovation commons reveals a perception of the transaction cost minimising point with the IPF space. This understanding also has implications for the scope and application of the institutions of innovation and innovation policy. Privately governed innovation commons suggest a subjective systematic overweighting of the costs of disorder in the study of the institutions of innovation. Innovation policies must themselves be understood as the product of a discovery process over subjective costs, framed through the ideas and rhetoric