The blockchain system has daunting technical problems to fix. But first, its disciples need to figure out how to govern themselves.
It’s late October. Outside the sprawling Prague Congress Centre, not only is the weather turning, but the cryptocurrency world is crashing down, as it has been for much of this year.
Expectations for blockchain systems, sky-high just a year ago, are falling nearly as fast as prices for the coins based on them. But inside, the mood is rather different. Here, Devcon—the annual “family reunion” organized by the Ethereum Foundation—is in full swing, and there’s barely a hint of negativity to be found.
On the contrary, there is lots of hugging, unicorn-themed clothing, and a sense of excitement about the future. This crowd doesn’t give a damn about what’s happening outside. Whatever’s going on in here, it’s about much more than magic internet money.
Ethereum is already the most famous cryptocurrency after Bitcoin and the third largest in total value. Unlike the others, however, it aims to serve as a general-purpose computing platform that could, its adherents believe, make possible entirely new forms of social organization. The central topic of Devcon is “Ethereum 2.0,” a radical upgrade that would finally allow the network to realize its true power.
The nagging truth, though, is that all the positivity in Prague masks daunting questions about Ethereum’s future. The handful of idealistic researchers, developers, and administrators in charge of maintaining its software are under increasing pressure to overcome technical limitations that stymie the network’s growth. At the same time, well-funded competitors have emerged, claiming that their blockchains perform better. Crackdowns by regulators, and a growing understanding of how far most blockchain applications are from being ready for prime time, have scared many cryptocurrency investors away: Ethereum’s market value in dollars has fallen more than 90% since its peak last January.
The reason Devcon feels so upbeat despite these storm clouds is that the people building Ethereum have something bigger in mind—something world-changing, in fact.
Yet to achieve its goal, this ragtag community needs to crack a problem as complicated as any of the toe-curling technical challenges it faces: how to govern itself. It must find a way to organize a scattered global network of contributors and stakeholders without sacrificing “decentralization”—the principle, which any cryptocurrency community strives for, that no one entity or group should be in control.
Is this even possible? Other blockchain communities, including Bitcoin, have struggled with infighting and gridlock over the kinds of major software upgrades Ethereum is planning. Whether the community can make Ethereum 2.0 happen isn’t just important for crypto speculators and blockchain nerds: it may just go to the very heart of how society is run.