Ethereum’s vision for a decentralized world is dependent on diversity.
In early January, ConsenSys announced its partnership with Black Girls Code (BGC), an Oakland-based non-profit aiming to increasing the number of women of color working in tech and STEM industries. Together, Black Girls Code and ConsenSys have launched the first training program focused specifically on blockchain technology for women of color.
The announcement comes at a time when the call to the Ethereum and blockchain community has become ‘BUIDL.’ As the community continues to build out open-source solutions, the partnership announcement with BGC gives rise to questions about who is in a position to build those solutions, and how to ensure more are involved down the road.
“The world is run by those who show up.” — Robert Johnson
Robert Johnson’s quote aptly describes the nature of how power, innovation, and opportunity are driven by stakeholder presence. However, the question behind the statement, “the world is run by those who show up,” should be “who was invited to show up in the first place?” When it comes to the Ethereum community and forums like DevCon, this is the core inquiry at hand as it relates to community diversity and inclusion.
DevCon is a microcosm of Ethereum’s global community, with all its brilliant developers, entrepreneurs, and academics. Last year, over 3000 people attended DevCon 4 in Prague, all yearning to network, learn, and party in Halloween costumes. Of the many walks of life that convened at the Convention Center in early November, seldom did you see any women or people of color. A $1200 ticket and a Prague destination will attract a certain type of audience — one that is able to attend.
However, what you may have seen is a community’s first steps toward recognizing it had a major problem of inclusivity and a few youthful pioneers that hope to solve the community gap.
Oakland natives and Black Girls Code (BGC) students Belle Reader, age 12, and Cadence Patrick, age 15, were two of the youngest attendees at DevCon 4. The two young women were some of the first awardees of the Ethereum Foundation’s newly instantiated DevCon Scholarship Program, and their attendance marked an actionable start toward increasing the crypto community’s inclusivity and diverse representation.
Only three months before this almost 6,000 mile journey from Oakland to Prague, Belle and Cadence had no knowledge of what blockchain was, or Ethereum for that matter. Like many people, they ‘had heard of Bitcoin before,’ but never had the opportunity to explore blockchain as a technology. Attending San Francisco conferences for $1,000 a ticket and enrolling in $500 per day developer courses aren’t remotely appealing or viable options.
The two students, like many community members of color, were caught in between a willingness to learn and the inability to participate.
How can we teach marginalized communities to master a nascent technology before an entire community misses out on the next wave of market disruption? In collaboration with Black Girls Code, ConsenSys Social Impact sought to answer this question by developing open source curriculum.
Our first step was to simply pilot a theory in blockchain course that dived into ethereum 101 topics, novice solidity development, and crypto philosophy. The pilot merged interactive activities with incentivized learning using BGC’s ‘DOPE’ tokens (now #BlackGirlsMagic Tokens — BGM), a vanity token based off the ERC20 standard, to intrinsically motivate students to participate and ask questions. Throughout pilot courses in Oakland, San Francisco, and Atlanta, over 60 young women of color quickly mastered an understanding of cryptographic hashing, consensus algorithms, and even made their own smart contracts and cryptocurrencies.
“Sometimes the biggest opportunity is the privilege of being present — to know that an idea exists and how that idea can transform what you’re passionate about. Communities of color haven’t been afforded this privilege in the blockchain community.”
By exposing international communities like the Black Girls Code student cohorts, a whole new host of problems can be attended to by to-be developers, designers, entrepreneurs, and entrepreneurs of color that might have never been fully considered by a more homogenous crypto-community.
The State of Diversity in the Crypto-Community
So total cryptocoin market cap just hit $0.5T today. But have we *earned* it?
— vitalik.eth (@VitalikButerin) December 13, 2017
How many unbanked people have we banked?
— vitalik.eth (@VitalikButerin) December 13, 2017
The answer to all of these questions is definitely not zero, and in some cases it's quite significant. But not enough to say it's $0.5T levels of significant. Not enough.
— vitalik.eth (@VitalikButerin) December 13, 2017
Beyond the memes, HODL schemes, and token sales, public blockchain technology is tasked with disintermediating systems of power that deprive our rights to self-sovereign identity, self-sovereign finance, increased social mobility, and our ability to participate in radical markets.
A lot of progress has been made. Since the inception of Bitcoin, we’ve seen a decade long movement toward renewed peer-to-peer ecosystem building, scalability development, asset tokenization, and the birth of the decentralized application (“DApp”) age, albeit with a sometimes perverted, commercial bent.
However, many of these ventures attempt to solve problems that don’t directly affect the lives of their co-founders. We have systems of digitized governance that don’t seek the feedback of mainstream consumers, ‘decentralized banks’ that hope to affect change in geographies that their startup team members have yet to set foot in, and ecosystem meetups, conferences, and forums that are devoid of participation from marginalized stakeholders.
The greatest irony of the crypto-community’s evangelism of a decentralized future is its passive negligence of the communal diversity required to accomplish such a radical vision. The emerging blockchain sector is doomed to inherit the inequities of the traditional technology sector if it continues to convince itself that intellectual diversity is detached from socioeconomic, cultural, gender, and ethnic diversity. To be candid, you can never maximize the former without maximizing the latter.
By becoming an increasingly inclusive and accessible community, DApps can become usable across a growing plethora of cultures and geographies. Technical documentation and education becomes available in more languages. Ethereum becomes a more efficient tool in the context of Sharia Law. Crypto-wallets become viable solutions for remittances and financial services in Venezuela and the Philippines. In essence, the sweat equity we put into imagining how helpful these tools can become materializes into the social good that we had all hoped for.
Bias is built into every product by its creators. The less diverse the product’s authors, the more prejudice the algorithm.
So how can we take our first steps as a community to ensure we have what it takes to build for the world, and not just the West? In this brief article, I’d like to more seriously consider, and discuss, the following:
- The growing concern of plutocracy in a ‘decentralized’ ecosystem and the buy-in blockchain economy
- Inherently centralizing qualities of Ethereum that we need to overcome
- Design and user experience assumptions made in the crypto-community that are naturally exclusive, assuming technical literacy and access to smart-devices
- Actionable next steps major community stakeholders can take to ensure Ethereum grows into an equitable, inclusive, and diverse community
Plutocracy is a Threat to ‘Decentralized Equity’
“Decentralized Equity is the measure of a public blockchain ecosystem’s ability to provide fairness and impartiality to its participants in order to maximize their potential success in learning, evangelizing, building, and scaling the technology.” — Robby Greenfield 😉
A plutocracy is a society that is ruled or controlled by people of great wealth or income. Many of us have come to realize, through global events like the 2008 recession and a multitude of incidents involving fraud in the financial services industry (e.g. Wells Fargo creating millions of fake consumer accounts), that unchecked capitalist societies naturally devolve into oligarchies, controlled by a few wealthy individuals and or families who can dictate the state of government, law, and other core aspects of society.
The cryptocurrency market has been in a constant state of plutocracy for the past seven years or so. Just look at any exchange chat room for the term “Whale” and you’ll quickly realize why. For blockchain ecosystems that tout utility token incentive structures, consumers that hold a majority stake of tokens hold an undue amount of influence over the entire system. A simple reference of AreWeDecentralizedYet.com demonstrates that networks like Ripple, NEO, and IOTA, in particular, have incredibly centralized sources of influence over the rest of their respective networks.
No existing public blockchain is decentrally equitable. In fact, they’re all, more or less, plutocratic and western-centric. If we look at node diversity geographically, we can see that even though Ethereum boasts the most number of public nodes (light nodes* and validating nodes, the former aren’t really nodes), many of these nodes aren’t replicated in diverse geographies — meaning that node representation lacks cultural diversity (and thus, the network lacks culturally diverse input).
The only way you could have possibly amassed an incredible amount of one of these cryptocurrencies was to:
- Have founded one of these networks and hold vesting tokens
- Have already had a lot of fiat money at the time one of these networks was made public
Wealth in the crypto-community is derived from wealth and privilege in the traditional economy; it is not a meritocracy or a holacracy (not that it was built to be either of those). I often wonder, if marginalized communities had even known that Bitcoin was a thing at a time that it was 10¢, would we see more women and people of color driving crypto lamborghinis?
Economies of Natural Exclusivity
Buy-in economies, or economic ecosystems that require a minimum amount of capital and or resources to participate in, have a natural bias against the disenfranchised. To participate in any of the top 100 cryptocurrency ecosystems, you’ll typically need Internet access and hold that network’s native token. For example, to use 99% of DApps in the Ethereum ecosystem, you need to have Ether (ETH), which means you must have money beforehand.
Consensus mechanisms also have an attribute of natural exclusivity. (Note:developing a good consensys mechanism is damn difficult, so any commentary on pitfalls should be taken with a grain of salt). However, it is true that many of the existing consensus mechanisms are biased toward the development of plutocratic dynamics.
For example, in order to maximize the number of tokens mined in a Proof-of-Work (PoW) network, you must have the resources to purchase thousands of computational devices to maximize your hash power. The more hash power you have (and the cheaper your nation’s electricity costs), the more decisive power over the network’s decisions you’ve come to wield, and thus, the more money you have, the higher the probability it is that you will be a major stakeholder in the network’s evolution. Currently, the Bitcoin hash race has Chinese mining pools control an estimated ~81% of BTC’s network hash rate, which is far from decentralized.
Proof-of-Stake (PoS) and Delegated Proof-of-Stake (DPoS) encounter the same issues. Vitalik warned against the development of voting cartels, or groups that purchase votes from participants in a DPoS ecosystem to influence how delegates are chosen . But I don’t think Ethereum’s future PoS mechanism has faced enough plutocratic scrutiny. Simply put,
- The more money you have → The more tokens you can HODL (in a PoS system) → The more tokens you have to stake → The more validator dividends you earn → The richer you become
Even simpler, just as in a PoW economy, a PoS economy favors already wealthy participants. In fact, the Ethereum Wiki is rather open about this:
A benefit of proof of stake as opposed to proof of work is reduced centralization risks, as economies of scale are much less of an issue. $10 million of coins will get you exactly 10 times higher returns than $1 million of coins, without any additional disproportionate gains because at the higher level you can afford better mass-production equipment, which is an advantage for Proof-of-Work.
Favoritism is even demonstrated in validator selection in a PoS system:
In any chain-based proof of stake algorithm, there is a need for some mechanism which randomly selects which validator out of the currently active validator set can make the next block. For example, if the currently active validator set consists of Alice with 40 ether, Bob with 30 ether, Charlie with 20 ether and David with 10 ether, then you want there to be a 40% chance that Alice will be the next block creator, 30% chance that Bob will be, etc
Of course, none of these criticisms are made in an effort to over-simplify the reality of how difficult some cryptoeconomic obstacles are to overcome, particularly regarding the development of consensus engines that drive the foundation of an entire network, but they are important to highlight and reconsider as we develop the new economy.
The Argument Around Ethereum’s Inherent Centralization
Ethereum 2.0 is set to introduce some great features to the existing ecosystem, including a number of cost, speed, functionality, and miner issues. However, there is a great debate as to how decentralized the future of Ethereum remains, particularly given its gradual transition toward Proof-of-Stake and the use of sharding. The criticism, provided by StopAndDecrypt, is as follows:
Blockchain-based networks, depending on their architecture, will inherently centralize or decentralize over enough time. Blockchains leveraging larger blocks centralize validators, which represent the most direct representation of how decentralized the network is. The basis for this claim is that the rate of growth of the blockchain “size” directly correlates to the amount of data a node needs to process at max block capacity. If the data a node needs to process at max block capacity is static over time, then the blockchain size grows linearly. However, never-ending block size increases make the rate of growth for both the blockchain’s size and the amount of data a node needs to process exponential. Thus, in order to be inherently decentralizing, a protocol needs to be designed in a way that ensures the validating node count will grow over time. In essence,
- No block size cap = Exponential chain growth
- Exponential chain growth = Growing node requirements
- Growing node requirements = Node count goes down over time
- Node count goes down over time = Inherent centralization of the network
The technical observation is a strong one, and, even as an Ethereum optimist myself, I agree that the position needs to be taken seriously as to how the network can resolve the issue of inherent centralization due to never-ending block size increases. In addition, the ever-diversifying node types in Ethereum (miners, fully-validating nodes, and light nodes) segregates who has undue influence on the network. For example, miners, and miners alone, set gas prices, which dictate massive scalability and DApp on-boarding implications if the price is set too high. If processing needs increase for fully validating nodes, block difficulty increases over time (via difficulty bombs and Ethereum’s difficulty algorithm), and block rewards trend downward, then there will only be a select few plutocrats with enough resources to run validator nodes and miners who will be incentivize to keep gas costs high to recover previously realized profit margins. The result is a network governed by a handful of for-profit stakeholders that dictate transaction fees, network upgrades, and thus the future of the root chain’s ecosystem.
The introduction of PoS will maintain the already existing plutocratic constraints that a PoW network has maintained since the dawn of Bitcoin’s network, substituting the need for energy intensive devices and cooling warehouses for inordinate amounts of Ether to stake towards the network. Sharding, a proposed flagship feature of Ethereum 2.0 that proposes to split up validation responsibilities across multiple nodes, only serves as a “scaling in” methodology that contributes toward temporary increased transactional throughput at the cost of reducing the number of fully-validating nodes.
What does this mean for Ethereum if it rings true? If, at the end of the day when sharding is realized in an Ethereum 2.0 ecosystem, that there are even fewer miner companies that effectively control the network? If we cannot, as a community, develop EIPs that speak toward the innate need for Layer 1 (i.e. upgrades to the root chain) solutions that ensure the inherent decentralization of fully-validating nodes by setting block size caps, metering gas cost limitations, and eliminating node classifications that segregate network responsibilities (i.e. validation, block size determination, block creation, gas limits, etc.), then we will fail to establish an inherently decentralizing network.
As was true in the beginning of blockchain, more full nodes with greater geographic diversity makes for a more scalable and decentralized network. A more diverse blockchain is a higher functioning blockchain. When thinking of the blockchain trilemma in attempts to solve for scalability, decentralization, and security, we should choose the latter two and developer Layer 2 and Layer 3 solutions to attend the the first attribute.
Naturally Exclusive User Interfaces & DApp Architectures
Decentralized applications across the blockchain ecosystem still make very novice user experience assumptions. The greatest design challenges that plague the issue of adaptability in the crypto-ecosystem include the following:
- Buy-In Economics: Assuming users will have access to Ether or any secondary market utility token (and that they can afford such a token)
- Wallet Literacy: Assuming that users will have smartphones to operate lite-client wallets, and, if they do, assuming that they know how to securely manage their private keys and memorize a 12-word seed phrase
- Transaction Fees: Assuming users are okay (and should, and can afford) paying transaction fees associated with using the DApp
- Cryptocurrency Volatility: Assuming users can leverage utility tokens, or tokens made for payment, that are volatile (and zed users can afford liquidity slippage)
- Language: Assuming users care that the blockchain makes that DApp function, and the usage of overtly technical language that confuses an otherwise intuitive user interface
Diversity is a Technical and Social Need
Increased diversity and inclusion isn’t a supplemental good to appease marginalized communities, it is a strategic attribute that any sustainable blockchain ecosystem will need to invest in if it hopes to reach global, mainstream adoption. An investment in diversity will ensure that blockchains like Ethereum can reach their maximum participant appeal and utility.
To make a blockchain ecosystem truly, decentrally equitable, the ecosystem will have to accomplish the following:
- Increase geographic node and or miner diversity and create/support node development programs with universities, particularly across the continent of Africa, the Caribbean, and South America
- Incentivize the development of EIPs/BIPs/etc. that target more effective solutions for maintaining inherently decentralizing Layer 1 attributes (i.e. putting new policies delineating gas limits, block size caps, and validator node responsibilities) by leveraging bounties and community grants
- Develop long-term programs and partnerships that support the institutionalization and increased availability of blockchain education and skill development with geographic diversity (e.g. Organizations like Public Universities, Black Girls Code, The Last Mile, Society of Women Engineers, etc.)
- Support hackathons and research grants that look to increase protocol and application layer development across neglected, cultural contexts (Sharia Law, Need for DApps/Clients that work on Mesh Networks, UX best practice templates, etc.)
- Hire new employees that differ in ethnic, gender, sex, and cultural backgrounds from your existing team to become more effective at developing holistic solutions
- Don’t wait to promote and empower marginalized identity employees to ensure that the voices of leadership directing your organization are as diversified as possible (in particular, the empowerment of technical voices at the leadership table)
The result of these efforts lead toward (1) increasing network security and diversified validator representation, (2) encouraging new generations of designers, policy-makers, and developers to continuously scale and mature the network, and (3) increasing open source tools to ensure the Ethereum network properly operates across cultural contexts.
ConsenSys looks forward to these collaborations and it’s our responsibility as an ecosystem, if we truly want to materialize a decentralized future for everyone, that we make diversity and inclusion a core attribute of our network, rather than simply an occasional symptom.
For those organizations interested in supporting Black Girls CODE’s inaugural Blockchain program, or helping instantiate an initiative that fits one of the categorical statements above, you can email me personally at email@example.com. Let’s get to work.
Disclaimer. The views, information and opinions expressed are solely those by the author above do not necessarily represent the views of Consensys AG. This article is a general interest piece and is not an endorsement of any betting or gambling platforms. Any reference in this article to any person, organization, activity, products, or services does not constitute an endorsement or recommendation of ConsenSys. This article does not constitute legal or other professional advice or services. ConsenSys is a decentralized community with ConsenSys Media being a platform for members to freely express their diverse ideas and perspectives. To learn more about ConsenSys and Ethereum, please visit our website.