- “[digital citizenship is] the state of being vested with the rights and privileges of a citizen within a digitally organized society”
- “As the concept of digital citizenship becomes more accessible and understood, people will prioritize digital societies more for their financial, democratic, and transparent attributes”
- “state and non-state actors could gain or lose geo-political standing based upon actions taken on the digital plane”
Many who interact with cryptocurrency rarely look beyond its initial benefit of turning piles of money into larger piles of money. I don’t blame them, since the benchmark for performance has been set at a modest 264.92% by Grayscale’s Bitcoin Trust. Yet, for those lucky few who spend their mornings rifling through the neanderthalic wisdom provided by crypto Twitter we are left to ponder what happens after the Lambos and Gucci belts.
I define digital citizenship as the state of being vested with the rights and privileges of a citizen within a digitally organized society. In practice, digital citizens enter into a social contract with a state or non-state entity by consenting to surrender some of their freedoms in exchange for protection of their remaining rights or maintenance of the social order. There are varying degrees to this social contract just like any other between the citizens of the United States or communist China. This variation can be observed across four forms of digital society: on-chain governance, decentralized autonomous organizations (DAOs), metascapes, and state-crypto partnerships.
On-chain governance is “a system for managing and implementing changes to cryptocurrency blockchains. In this type of governance, rules for instituting changes are encoded into the blockchain protocol. Developers propose changes through code updates and each node votes on whether to accept or reject the proposed change.” A recent example of this was Bitcoin’s taproot upgrade. To approve this upgrade, Bitcoin miners voted by adding a “signal bit” to the blocks they mined on the chain over a set period of time. Additionally, the threshold for approval was set to 90% of mined blocks during that period of time. This type of governance generally can be considered a low degree of social contract since the miners aren’t giving up much freedom to maintain their society or in this case Bitcoin.
DAOs are organizations or companies operated by code instead of people. Token holders have the ability to vote with their token balance to pass referendums which are in turn implemented using preprogramed functions. Generally, DAOs emulate a form of direct democracy government with open access to the world and code that is open source. A complex example of a DAO is none other than my favorite blockchain platform Polkadot. A few weeks ago, I participated in a referendum on Polkadot by voting for its new logo and marketing style to be used for the foreseeable future. I signed my vote with a unique identifier and a ~$1 amount of my DOT tokens. This vote was a first of its kind amongst blockchains and cryptocurrencies. For perspective, this would be the equivalent of all shareholders of Chipotle or Ebay voting on a new company logo and marketing material, then having them instantly approved after the voting window closes. Overall, DAOs have a medium degree of social contract because stakeholders must spend or freeze capital for a period of time to maintain the status quo or affect changes to it. Especially, when one considers a recent vote that took place on Polkadot valued at $1.3B.
Metascapes are interactive digital instances or worlds that casually mirror modern society’s norms and construction. To clarify, I haven’t seen or heard the term metascape used before, but I want to distinguish unique projects and companies from the amorphous term they inhabit currently dubbed the metaverse. A popular metascape that recently raised $93M in a Series B funding round is The Sandbox. The Sandbox “is a community-driven platform where creators can monetize voxel ASSETS and gaming experiences on the blockchain”. In other words, people can create, share, or purchase just about anything they can think of in a virtual format. As well as, publish and play games, buy and sell virtual real estate, and develop unique virtual personas. Metascapes have a high degree of social contract since participants are not only expending capital in these digital societies, but also forming irrefutable identities to interact on them under a set of terms and conditions.
State-crypto partnerships are joint ventures between governments and cryptocurrencies or blockchains. The scale of these partnerships is quite variable from municipalities like Miami or New York to nations like El Salvador or China. An exciting example of these partnerships is CityCoins and its current projects MiamiCoin, AustinCoin, and NYCCoin. The purpose behind CityCoins is to “give communities the power to improve their cities, while providing crypto rewards to individual contributors and city governments alike.” Think of them as a new revenue stream for the city that rewards community members for participating and holds city officials accountable for their actions. For instance, if city officials govern unfavorably in the eyes of their constituents, then those constituents can allocate their capital elsewhere which decreases or entirely eliminates the city’s crypto revenue stream. Alternatively, city officials can legislate discounts on public services to community members who hold their city’s coin to bolster the population of coin holders and subsequently the crypto revenue stream. Of note, coin holders DO NOT have to be residents of that city. So, it doesn’t come as any surprise that the city of Miami has raised ~$21M USD worth of crypto revenue, approximately 20% of its annual tax revenue, in roughly 3 months. Overall, state-crypto partnerships have a variable degree of social contract from low to high since the level of freedoms exchanged for the protection of rights also varies when comparing anonymous holders of MiamiCoin to registered users of China’s central bank digital currency (digital yuan).
Now for the fun part as I posit three potential impacts of these different forms of digital society. The first is state citizenship becomes secondary to digital citizenship. As the concept of digital citizenship becomes more accessible and understood, people will prioritize digital societies more for their financial, democratic, and transparent attributes. This will accelerate voter disenfranchisement which in turn will further centralize state power towards more autocratic forms of state governance. Unfortunately, this impact has the potential to escalate itself if state-run societies continue to remain unfavorable relative to digital ones.
The second is the rise of global constituencies. Populations are no longer defined by traditional borders. Digital societies will procure unique mixtures of cultural identities, but similar social norms. For example, a person from Utah and a person from Spain have different cultural identities, but they both participate in the governance of Polkadot because of shared social norms such as support for democratic values. Therefore, digital organizations must be structured to be flexible yet well defined by standing for a mission and vision, but can evolve with the expansive society they serve.
The last impact is the redefinition of state and non-state power. Digital citizens can easily assemble, organize, and coordinate action. So, power is no longer only defined by traditional metrics of economic, diplomatic, or military power. This means that state and non-state actors could gain or lose geo-political standing based upon actions taken on the digital plane.
I hope this post produced many questions and thoughts on what digital citizenship is and could be. Please join the discussion in the comments section.
Here are crypto projects I am researching right now:
Helium, Pontem, Deeper Network, Ethereum Name Service, RMRK (pronounced remark), Guardians of the Metaverse (NFT)