SO WHAT? A Web3 Digest for Executives

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Must-know news and analysis from Web3 for busy executives. Brought to you by Terminal 3. Co-authored by Jon Russell and Gary Liu.

Anonymous and accountable: how blockchain can change the game for polls

A new service allows people to vote anonymously without polls being ravaged by spam or bots

Jon Russell and Gary Liu

Jul 08, 2024

Speaking your mind online can come at a price in some countries—even just indicating your preference can be costly in some, too. This week we are looking at how blockchain technology can have a tangible impact on free speech and opinion online.

We’ve written about zero-knowledge proofs (ZKPs) and decentralized identity in past issues. This week, those topics dovetail together as we look at how one company is emerging with a fascinating platform that could help bring people and their opinions together, without fear of repercussions.

Best,

Jon and Gary

PS: If decentralized identity and data inspires you—and it should!— be sure to check out the Terminal 3 deep dive on Verifiable Private Identity (VPI) which just went live

What’s going on?

Censorship resistance has been at the core of Web3 since its inception. The Bitcoin whitepaper sets out the vision of an asset that is immune to governments worldwide, while one of the key tenets of Ethereum to a tamper-proof internet.

Parts of Web3 decentralized have blossomed—wallets enable users to own and control their assets with full independence, for example—but the larger vision of censorship resistance and full decentralization has remained a fairly distant north star. But one new project is giving us a peek into a very interesting future.

Rarimo Protocol, a project founded out of Kyiv in Ukraine, is pioneering the concept of anonymous polls from authenticated voters using its Freedom Tool. That’s to say it avoids the current problem of online polling—how do we know if a person is eligible to vote and votes aren’t duplicated—whilst also giving voters anonymity to avoid potential repercussions. Authoritarian governments like Russia or China may take action against citizens that express dissent against the regime, for example.

It is early days, but systems like Freedom Tool illustrate the potential of zero-knowledge technology, a topic we wrote about in June, and decentralized identification, which we explained in May.

SO WHAT?

1. More freedom to vote and express opinion

Online polling was revolutionary. The internet gave pollsters a platform to reach thousands if not millions of people’s opinions instantly and without the constraints of face-to-face or postal canvassing. But qualifying who can vote and preventing spam or coordinated activity became a new problem.

That’s where blockchain-based voting can make a difference. The concept has been criticized because the blockchain would ultimately be controlled by an organization and therefore be centralized and no better than a secure database, but the differentiator is not that votes are recorded on-chain, but instead that it enables anonymous yet authenticated voters.

Rarimo Protocol’s Freedom Tool is being tested to allow users with Russian passports to sign up and take part in polls focused on the government and regime—an activity that would come with significant risk through existing social platforms.

With the Freedom Tool, voters can take part in polls that are relevant to them without fear that their participation or answers can be viewed publicly. That can bring about newfound freedom of expression that’s potentially particularly powerful in countries with restrictions on freedom of speech.

2. Censorship-free communication

The concept of safe polling can easily be extended in other ways, chiefly communication and social media.

Russia and China—again the two examples of authoritarian regimes—have taken action against local social networks, and even global ones such as Facebook, over the last decade. China has been particularly stringent, having introduced mandatory real names, forcing users to register accounts with national ID, and mandating platforms themselves to police their users against ‘unlawful’ content. China has jailed users, including a journalist in 2021.

ZK-based platforms like Rarimo could advance their services to include message boards and communication features further down the line. That could enable users to create and share content anonymously while ensuring that they are real people to prevent bots spamming.

3. But inherent weaknesses remain

The system is not without its challenges, however.

Already, RariMi has been challenged by the Russian government which has peppered the service’s iOS and Android apps with low quality rates, apparently through astroturfing—or paying for fake reviews.

Low scores may serve to put potential users off, but there’s a bigger danger still: that governments might rule the apps unlawful. In such cases, governments can order Apple and Google to remove apps from their iOS and Android app stores. Both companies adhere to the law when ordered to do so.

It is early days for censorship-resistant platforms, but Rarimo is one of the emerging players to keep an eye on.

News bytes

The price of Bitcoin has fallen sharply in recent weeks with speculation the cause is selling pressure from Mt Gox, an exchange that became insolvent in 2014 but is returning Bitcoin to its users, and the German government, which is selling Bitcoin that it previously seized.

Analysis shows the governments of the UK, Germany and US own nearly $18B in Bitcoin collectively due to raids and confiscations.

Taiwan has built a prototype platform for a potential central bank digital currency—it plans to hold multiple hearings and forums next year as its central bank continues to study and develop a CBDC.

In an effort to grow the appeal and usage of stablecoins Justin Sun, who created cryptocurrency Tron and owns leading exchange HTX, said he is leading a project to develop a stablecoin that won’t require Ethereum or other tokens for gas fees.

Meanwhile, Russia is reportedly considering a move to legalize stablecoins to help it with cross-border transfers.

It looks like hackers got access over 30 million phone numbers by attacking Twilio-owned two-factor-authentication app—though Twilio claims the attackers did not access more sensitive information or systems.