Rules without rulers

**In state socialism, power is in the hands of the ruling elite.**In capitalism, power gravitates towards those that hold the most capital and stake in the corporations that are able to exert power over the people through their monopolies. Regardless of the political philosophy, the fate of the many is nearly always dictated by the few. In anarchism, power hierarchies are broken up and rules are made by consensus. Along these lines a distinction can be made between ruler based systems and consensus based systems.

Ruler based systems that give total power to a single person or an aligned group of people often pave the path towards authoritarianism— as the ruler has freedom to make rules that align with their ideals, enriching themselves in the process. Even when rule based systems are held to account by other entities, questions arise about who or whatthose entitiesare, what gives them the right to dictate the moral parameters of what is allowable and what isn’t. Are their decisions influenced by ideology or self-interest? A calamitous chain of corruptible humans inevitably form.

Decision making in ruler based systems are fast and efficient as consensus doesn’t need to be met, but consequences will be disastrous for their subjects in almost all cases. Even the most benevolent leader will likely cause chaos, as decisions made, even in the best interest would likely be more whimsical and less thought-out than a proposal in a consensus based system.

The road to hell is paved with good intentions

An old proverb

**This distinction can be applied to cryptocurrencies.**Proof of stake blockchains such as Ethereum give power proportionately based on size of stake. Power gravitates towards the most capitalised. Ethereum, in this example can be described as a ruler based system. Proof of Work blockchains of which bitcoin is one, guarantees that a person who owns a large slice of the supply has no more power than one who owns a significantly smaller slice. Bitcoin is entirely consensus based, from block validation to the changes to open-source bitcoin core software.

A monetary protocol like Bitcoin should not be able to change core aspects at the whim of a few, nor should a monetary system be at the hands of self-interested rulers who can be corrupted, coerced or co-opted. Political philosophy is far outside the scope of this article, but for a digital monetary protocol, it is with little doubt what is more suitable – a consensus based system, where there are rules without rulers.