The Second Power


The Second Power — A Technolibertarian Argument for your Decentralised Cybersoul

Blockchain’s first technical and cultural breakthrough was the separation of state from money and financial services.
The second will be the separation of big tech from data and identity.

In 2019, Andreas Antonopolous, a chief orator of the cryptocurrency movement, gave a speech on the psychology of the traditional financial system, describing how banker’s exploitative nature could be reduced to a ‘problem of architecture’.

Because the financial system allows for the exploitation of individuals via fees (what he describes as sticking a straw in the middle of each transaction), it’s not that the bankers involved are intentionally malicious, it’s just that if a human can get away with exploitation, they will always be tempted to do so. The architecture of the financial system is therefore constructed in such a way that there are middlemen involved, and those middlemen profit at the expense of the end user; of the person wanting to send money home in South East Asia, of you deciding to buy something abnormal or abroad with your credit card.

The natural solution to this, he concludes, is Bitcoin. Remove the middeman and separate the state from the control of money. I do not disagree with this solution, and neither do a growing body of people proclaiming the end times of Fiat and the rise of Bitcoin’s great techno-religion to embrace sound money that aligns with a deflationary world.

But Andreas’ ‘problem of architecture’ doesn’t end with the financial system. The plumbing runs deeper, to the base architecture of the internet itself, and how we as individuals have been conditioned to connect and consequently reflect with it. This is evidenced by the now growing call to migrate to decentralised/private equivalents of Social Media and messaging applications, as well as documentaries like The Social Dilemma highlighting the insidious addictive nature and behaviour modifications these apps are enacting upon us.

It is beginning to dawn on the collective that big tech’s own middleman effect is so great as to seem insurmountable, but yet it too, like the banks, must be somehow overcome, for the sake of both democracy and personal liberty.

Of Base Premises

In order to put forth a sound argument for an essential second use case of the Bitcoin blockchain (and by extension a second cryptocommodity), let us first consider the following questions:

A) Should your ability to transaction value with whomever be considered a basic human right, above state and corporate sovereignty?
B) Should ownership of your data, including the ability to control (offer and renounce) its usage be considered a basic human right, above state and corporate sovereignty?
C) Is it possible to answer yes to A and no to B and maintain a consistent Libertarian worldview?
D) If yes to C, do you not think it is possible that having solved A via distributed systems, that B cannot also be solved this way? Furthermore that it is not morally imperative that we do so, given big tech’s centralising dominance of the internet landscape?

I have selected Libertarianism with intention. For this argument makes its appeal to those most sympathetic to the Bitcoin maximalist view of the cryptocurrency movement. It is them I wish to convince of their Proof of Work blockchain’s second power through deductive reasoning.

These questions can be reframed to form two basic premises from which follow a conclusion I’ve eluded to above:

1) Your money should be under your control
2) Your data should be under your control
3) Both money and data must be under your control to realise a fully sovereign internet

A second, subtextual conclusion is implied here. One of which will require some elaboration…

There are two definitive use cases for the Proof of Work blockchain (sound money & decentralised identity).

While the first (sound money) is obvious to Bitcoiners, the second (decentralised identity) is less so. This is because to solve this second problem we require a greater system for which the PoW blockchain is but part of the proposed solution.

Simplified analogies to illustrate this point include:

  • The difference between Excel (representing Bitcoin’s ledger) and Windows (its operating environment).
  • Treating blockchain as an ingredient, rather than the meal.
  • Bitcoin as the nucleus (an organelle), rather than the cell in its entirety.

In order to control one’s data on a base infrastructure level we require a Decentralised Identifier (DID) for the individual. However, in order to preserve control and ownership of one’s data, such a DID cannot be loosely attributed to a blockchain, as this is the same argument that maximalists fairly use to critique symbolic Non-Fungible Tokens. Simply noting ownership of your existence on a blockchain does nothing to solve controlling the exploitation of that existence, just as noting ownership of an image on a blockchain does not mean you definitively control that image and how it may or may not be replicated. This is where we need to get into the weeds and then later introduce the proposed solution, The Smart Web.

Web 3’s Shortcomings

Foundations Matter.

As I mentioned at the beginning of this argument, there is growing awareness of the shortcomings of a data-feudal internet:

  • Your data is someone else’s profit
  • Your data is being wielded against you, to advertise to you, to influence your opinions, thoughts, beliefs
  • Applications are incentivised to hold your attention (to steal your time)

Decentralisation via the removal of central servers is an insufficient solution, as this action in isolation does not fully protect your personal data.

Much of the resistance to moving away from status quo social media is tied up in the lack of desire to begin from zero followers. If you’re going to provide an alternative, you require a unique selling point that is either complementary to the current system or vastly superior. This brings us back to the necessity and innovation of DID, as it provides a form of universal credential and a secure environment to house your data.

This means that when you engage with a decentralised social media application, you are the ultimate curator of content by default. Under this framing, social media applications become more so like shared protocols than specific platforms. Algorithmic influences become a choice and all of your digital life (including other applications and access to scarce programs and assets) stem back to this secure foundation exclusively under your control. We can think of DID as a meta-system layer that lives above or below that of whatever sound money or popular currency happens to be.

DIDs shape the secure 3D walls of your digital home, for which Bitcoin’s 2D ledger sits on your table.

Failure to acknowledge the need for a network operating system of this description entails both failure to address The Social Dilemma problem (that centralised applications are incentivised to both steal your attention and manipulate your behaviour), and to acknowledge the growing severity of this problem, both for democracies, as well as your own digital self-sovereignty.

This also implies that initiatives to create Web 3.0 (namely smart contract architectures like Ethereum) are currently failing to address the root flaws of the web’s current iteration. It is not enough to simply lay blockchain on top of the current, flawed framework, we must take everything we have learned and redesign and reestablish how we connect to the internet with blockchain security baked into its foundation.
Nurturing an environment from these first principles also expands the capabilities of smart contracts from being strictly limited to abstract or loose tokenisation to include truly scarce, digital goods (eBooks, music, video, games, VR art), as the underlying code is secured by the network operating system. A tradeable token simply represents the right to access said underlying code from the network; a degree of complexity above that of current, predominantly Ethereum-based trends that are subject to fair criticism from the Bitcoin community.
Furthermore, such a system is crucial to the development of the Internet of Things era throughout the decade ahead, as our devices will increasingly require a unifying, common tongue to communicate with each other, as well as the diamond-like security such a DID cyberfortress provides.

Arguments & Rebuttals

Sounds good. But Bitcoin can do this.

Not quite. As was previously discussed, if we believe DID to be infrastructural bedrock, AND that it is imperative that we must move to a world of digital self-sovereignty as soon as possible, then we must admit that the necessary network operating system is significantly more complex technically than Bitcoin. While one could make an argument that the creation of one’s DID should be denominated in Bitcoin (and it certainly could be on a user interface level, though not on the backend), it is very difficult if not outright impossible, to force Bitcoin (a coveted digital store of value) to change its stripes to become something that it fundamentally is not.
Strange as it may sound, separation of these two functions is the best case scenario for Bitcoin’s own longevity (symbiosis not just on the part of the proposed greater network OS, but from Bitcoin too). Otherwise on a long enough timeframe Bitcoin’s claim on sound money could potentially become subservient to the DID meta-commodity, especially if it presented all of the desirable attributes of Bitoin’s monetary policy, and then some.
Alternatively, there may be an argument that use cases could be muddied (a common argument against Ethereum from Bitcoiners). This is why the best solution is to merge-mine a separate commodity alongside Bitcoin, that bears sole responsibility for DID, for individuals and for the Internet of Things devices we wish to leverage PoW’s security for. This separation allows Bitcoin to do what it does best. Incentivising the long term holding of it as a store of value, rather than transacting with it for auxiliary purposes.

Another way of viewing it is to consider Bitcoin the global reserve currency, and DID as a form of digital good to be acquired; a scarce, symbolic representation of your sovereign cybersoul.

We don’t need a blockchain-secured network operating system for the internet.

Then we do not wish to overcome the behavioural exploitation of the data-king monopoly of the current internet. This would be akin to saying we’re okay with removing the middlemen banks, but not middlemen big tech. True, we could choose not to innovate in this direction, but it seems growing idealism is leading us towards such a solution. An operating system is the soul of software, and the inevitable bedrock technical solution for the cryptocurrency movement. It is also fundamental to the security needs of the Internet of Things future we aspire for.

DIDs don’t need a token.

On the contrary, they absolutely do, as a DID can only exist in its most full-fledged form if it is secured by Bitcoin’s blockchain (the most secure distributed network on the planet). In order to commit a DID to the chain (to harness this security), economic compensation must be provided. This entails the need for a second cryptocommodity and demonstrates a second purpose for the PoW blockchain; securing your cybersoul.

The Smart Web

Any Layer 1 blockchain) vs Elastos, a serendipitous visualisation (credit @AurelienVautier)
Layer 1 Blockchains vs ElastOS: A Serendipitous Visualisation (Credit @AurelienVautier)

So far I’ve refrained from highlighting a particular project in development. Through my own extensive research, however, I have come to the conclusion that only one project is far enough along to deliver the necessary network OS we seek that solves for all (not just some) of the growing cultural problems on the horizon.

That project is Elastos, founded by ex-Microsoft employee and foremost authority on operating systems in China, Rong Chen. Were it not for his tireless work, this argument would not exist, and I am sure fewer people still would realise the growing relevance of Decentralised Identity to the overall crypto-conversation.

But don’t just take my word for it. Here are the facts…

  • DIDs on Elastos are merge-mined with Bitcoin, currently capturing just over 50% of its hashpower at the time of writing
  • A separate carrier network for private P2P communication and decentralised network traffic (at last check 200,000 nodes currently active)
  • Built-in decentralised storage (Hive)
  • Smart Contract sidechains directly linked to Bitcoin’s own hashpower, or delegate nodes democratically elected for signing blocks at greater efficiency (all while maintaining a reversion to PoW function to preserve autonomy)
  • A private P2P messenger ( and decentralised Social Media @elastOSFeeds already exist today

These are just some of the impressive accomplishments of the project. For more information, visit to research yourself or download the secure browser/DApp store on Google Play or the App Store.
Try it and then tell me with a straight face that anything else in the decentralised application space even comes close from a UI/UX perspective.

The truth of the matter is we can begin a process of collectively moving to this new system today OR we can wait years, perhaps decades for someone to appropriate or develop the very same system. I favour the former approach, and I believe it is both reasonable and morally relevant to the future of humanity that we do so. I also believe the way forward for the cryptocurrency space is symbiosis with Bitcoin, and Elastos strengthens the cause of miners by giving them a new reason for being. Securing the Smart Web.

I ask Bitcoiners to put aside the noise of smart contract architectures and competitive monetary policies, and consider the broader, philosophical picture. Decentralised Identity is fundamentally necessary, morally necessary, to realise a fully sovereign internet, and this is the definitive second power of the Proof of Work blockchain.

Join the Cyber Republic today and help us evolve the conversation toward sound technology and legitimate, mainstream relevance.

The Second Power was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.