Ingeun Kim | ingeun92@naver.com | CURG
This article was originally written in Korean, and you can find it here !!
Before diving into the main content of this article, let me first introduce two concepts: [fairness, equity, equality], [feudal society]. It is the author’s wish that you read through these first, even though they are a bit long, to aid in understanding the main content.
Fairness vs Equity vs Equality
Fairness is creating a system that allows capable people to win.
Equity is distributing equal probabilities of opportunity to everyone.
Equality is distributing the same outcomes to everyone.The Difference Between Fairness, Equity, and Equality (Author: Gini)
Nowadays, most people do not distinguish carefully between these three words when using them. While there may be no need to distinguish them in daily life, for this article we need to use the words more precisely, so let’s go over them.
The quoted passage above simply explains the meanings of fairness, equity, and equality, but let me elaborate with an example.
Ether Kim, who really loves chicken, invited his friends Eeveet and Ripple Park over for a chicken party after a long time. Upon hearing he would provide chicken, the invitees happily went to Ether Kim’s house. However, the stingy Ether Kim did not order a generous 3 chickens, but only 2. Since you can’t really complain to the host providing the food, the 3 of them had to share the 2 chickens. What are the ways they could divide it up?
- Fairness: Ether Kim has a Mario Kart game. They agree to rank themselves by playing, and the last place finisher alone does not get to eat chicken, then start the game.
- Equity: Ether Kim has a board game where a plastic figurine pops out when you stab it with a plastic knife. They decide order by rock-paper-scissors, then play and have the loser not eat chicken, then start the game.
- Equality: They weigh out the pieces of the 2 chickens to the gram and distribute them so everyone gets exactly equal amounts in grams. If it cannot be divided up exactly equally, they agree that no one eats chicken at all, then start weighing.
From this story, you can clearly see the differences between fairness, equity, and equality. With the fair method, the person who could not eat missed out because they lacked the capability to be good at Mario Kart. With the equitable method, the person missed out simply from bad luck in the board game. Finally, with the equal method, either everyone could eat the same amount, or if impossible to divide exactly, then no one could eat.
Feudal Society
Feudalism, also known as the feudal system, was a combination of legal, economic, military, cultural, and political customs that flourished in medieval Europe from the 9th to 15th centuries. Broadly defined, it was a way of structuring society around relationships derived from the holding of land in exchange for service or labour.
It was a past form of decentralization. Feudalism refers to a system where relationships between lords and vassals were formed through the ownership of land.
Feudalism was a form of politics and society naturally formed based on the class system rooted in the ownership of land, which was the source of power and wealth at the time.
Those who owned land could engage in productive activities on that land and live off the crops produced there, accumulating additional wealth to purchase more land. In contrast, those without land could only live by borrowing land from landowners and paying part of the crops produced to the landowners.
The Basic Philosophy of Blockchain
Now onto the main content, for which I have laid this lengthy introduction.
Introducing the decentralized concept to the forefront in 2008, Bitcoin has survived to this day, with its ups and downs, while still upholding its belief in decentralization. Many later blockchains, like Ethereum, do not deny the decentralized concept either (though there are blockchains that fail to properly maintain decentralization…).
Then what philosophical characteristics does decentralization, the core philosophy underlying the blockchain industry, embody?
Looking just at the word “decentralization,” it may seem closer to equality than fairness or equity. Since centralization typically implies concentration of power and wealth, i.e. vested interests, decentralization can feel like a distribution of those forces, suggesting equality. However, in blockchain, decentralization involves distributing power in a way more philosophically aligned with fairness.
The most representative example is Bitcoin mining. With better graphics cards or participation in better mining pools, returns correspond to the resources each person invests — a structure of fairness.
If you argue “Well that’s just because Bitcoin uses Proof-of-Work (PoW),” even with Ethereum’s recent switch from PoW to Proof-of-Stake (PoS), fairness is reinforced. Very intuitively, someone holding more Ether has a higher expected return from mining rewards.
As the implementation of blockchain decentralization requires investment of resources in this way, it appears very fair from the perspective of fairness, but unequal from the perspective of equality.
The Evolution of the Web 3.0 Concept
Web 3.0 essentially adds the concept of ‘ownership’ on top of the core read/write capabilities of Web 2.0.
The emergence of blockchain, more precisely Ethereum, marked the advent of the Web 3.0 concept. The arrival of Web 3.0 signifies the reclamation of economic self-sovereignty, meaning full ownership rights over all the fruits of one’s own labor as well as the freedom to utilize those owned assets however one wishes.
This may sound like an idealistic and desirable economic philosophy at first glance. However, from another perspective, it implies that by leveraging the results of one’s efforts, subsequent outputs become easier to produce, leading to a widening gap in asset accumulation over time.
Assuming the Web 3.0 world is built on blockchain systems, the nature of blockchains necessitates an environment of anonymity or minimal personal information disclosure. In such a case, a person’s worth can only be assessed based on the assets they hold. This inevitably translates the asset gap into a class divide, creating a world colder and more ruthless than reality.
Let’s consider an example of a future society with fully autonomous self-driving cars and traffic control systems. Even with autonomous vehicles, on the roads some cars would need to merge in while others yield. For the traffic system to operate fairly, vehicles in a hurry would need to pay from their assets to exercise a right-of-way, while unhurried vehicles could yield and perhaps earn assets in return. Just from this case, we can see how those with assets would receive preferential treatment in this traffic system, while the opposite would face greater exclusion.
The Digital Feudal Society
Based on the above, it is highly likely that the future Web 3.0 society will take the form of a digital feudal society.
Revisiting the concept of feudalism, it essentially means that those with more establish power through their holdings, and wield this power to create a class divide and hierarchical relationships, such as between landowners and tenant farmers.
In the past, land was power, while in the modern era, money is power. In the Web 3.0 world built on blockchain, money is also power. Inevitably, those with more assets will gain more power and attain higher class status.
A stark example demonstrating this is the Axie Infinity play-to-earn (P2E) workplaces.
The most successful P2E game so far, Axie Infinity, has in reality created a rather profitable business model in developing countries through word-of-mouth. Wealthy company owners prepare the devices, personnel, and spaces for playing the P2E game, taking most of the profits from the in-game earnings — essentially implementing a digital version of feudal landowners and tenant farmers.
Of course, if the tenant farmers are paid fair compensation transparently, those with greater capabilities and assets taking a larger share could be seen as a fair meritocratic society. Just as feudalism could have been fair if land management was ideal. This is the same rationale.
However, one question arises: Is a society overly centered on fairness ultimately the right one?
In the real world, the solution derived to address this question consistently across nations is precisely the welfare system. The welfare system refers to social and institutional efforts to improve the quality of life for members of society by redistributing gains from a fair system in line with the value of equality.
Then is implementing a welfare system possible in the Web 3.0 society as well?
To enable a welfare system from the blockchain and Web 3.0 perspective, there needs to be some technological support shifting slightly from the fair side towards greater equality. The PoW of Bitcoin and PoS of Ethereum mentioned earlier are both fair-based mining methods. Does a more equality-based mining method not exist?
For a more equal mining method, it should be based on a resource that can be utilized as equally as possible by everyone and that everyone possesses roughly equal amounts of. One such resource around us is “time.”
Proof-of-Time (PoT) is proof-of-elapsed-time, an consensus algorithm and mining method that provides the greatest rewards to those who spend the most time. Using this could achieve a more equal mining approach, free from all forms of individual classification by assets, status, etc. In a sense, welfare in the Web 3.0 society could potentially arise from some reward system based on PoT.
Conclusion
A Web 3.0 society where the principle of power derived from assets operates even more strongly than the real world has already begun. Those who jumped in earlier to acquire more assets and secure safer positions, acknowledging the risks and efforts, rightfully gain greater power — this is the path of fairness. These early movers will likely form a society taking on the shape of a new digital feudalism adopting the latest technology, albeit reminiscent of the feudal system of the past. However, humans are imperfect, so the ideal public utopia can never be perfectly realized. This is precisely why welfare based on equality is needed for those excluded.
In the Web 3.0 society as well, there will likely continue to be excluded individuals and subsequent issues raised. In the real world too, problems of wealth inequality and welfare are notorious areas that have caused ongoing labor pains. If we take the prolonged issues of the real world as a mirror and work to apply the lessons learned more swiftly in the Web 3.0 realm, perhaps we can address these growing pains more wisely. Especially if blockchain technology enables an uncentralized environment accessible to anyone, anywhere, at any time, we may be able to implement the values of fairness, equity, and equality more precisely and efficiently than the real world.
