"Greenpill" Chinese Reading Club: Greenpill and Governance Coordination Concepts for Human Society
The ultimate goal of Greenpill is to achieve the coordination of community governance models on a global scale.Preface
This reading club is an online reading group for the Greenpill Chinese community to learn and discuss Greenpill, divided into three sessions. Friends interested in web3 public governance are welcome to participate. We will provide knowledge consolidation and Q&A for participants after the sessions.
The second reading session is tentatively scheduled for Sunday afternoon, April 17. Friends interested in the discussion are welcome to join the Greenpill Chinese community!
About the Greenpill Chinese Community
The Greenpill Chinese community is a spontaneously organized group of web3 enthusiasts, social builders, future dreamers, and internet citizens influenced by Greenpill thought. The topics of focus revolve around blockchain, crypto-economics, sociological theories, game theory, and more. We aim to spread the spirit of "regenerative crypto-economics," advocating for carbon neutrality and the use of clean energy, building new coordination mechanisms, and funding public goods, using regenerative crypto-economics to expand human development space and build a better world.
Why initiate the "Green Pill" reading club?
We hope to attract and identify more like-minded individuals to join us in contributing to the industry. We aim to filter out those who are passionate about the Green Pill initiative and organize them to contribute to the next edition. We hope to gather those who love DAOs and are enthusiastic about governance topics to explore together.
Terry Tien:
Hello everyone,
I am very pleased to have this opportunity to communicate with you about the very cutting-edge book, Green Pill.
I have a background in political philosophy research, which is reflected in many related paths in Green Pill. As Owocki himself said, the current version 0 is actually a foundational structure, and many of the concepts proposed need to be enriched through the efforts of the community and other contributors to complete the subsequent versions in the form of web3.
Therefore, I personally understand that the reading club itself is also a process of reinterpretation and recreation, requiring everyone to exchange and contribute together.
Terry's Reading Section
I am very honored to have this opportunity to share my feelings about our joint reading.
First, I need to introduce myself: I actually started to get in touch with blockchain quite late, just beginning to explore and understand knowledge in this field earlier this spring. I am undoubtedly a novice in terms of the technical aspects. Therefore, what I share today regarding my understanding and doubts about the Green Pill is based on my own knowledge structure, and there may inevitably be shortcomings in understanding web3 and the technical architecture. I especially welcome guidance from all friends.
Greenpill is a book of horizon fusion
This image is from a podcast episode where V God was interviewed, and both parties discussed Green Pill and public goods extensively. The French philosopher Gadamer has a famous concept regarding the interpretation of textual ideas called "horizon fusion," which refers to the phenomenon where interpreters or readers, when interpreting, bring their own "pre-understanding" or knowledge structure, starting from their current situation, to engage with the "horizon" of the text and grasp the meanings revealed by the text. This leads to the fusion of the horizons of the interpreter, the text, and the current situation. "Horizon fusion" is not only the fusion of history and reality but also the convergence between the interpreter and the interpreted. As Croce said, "All history is contemporary history," historical texts and knowledge only gain meaning when they fuse with the present.
I personally believe that the above concept is quite significant for understanding web3 and Green Pill. Because web3 provides a feasible foundation for a broader horizon fusion, truly allowing for reinterpretation, re-reading, and re-creation in the sense of open-source, community iteration. This is not merely a dialogue with historical concepts in Gadamer's sense but a continuous fusion of possibilities under the same time and space.
The book Green Pill, or rather, this pamphlet, is the best interpreter of this idea. The current version 0 we have is a foundational structure waiting for all of us to recreate. Similar series of interview-type podcasts, reading club exchanges, etc., are all processes of interpretation and creation, until a consensus is formed in the community and a new version of Green Pill is recreated with more enriched content.
01.
Frontline Preface: Key Concepts
In the preview of the reading club, we mentioned the first four chapters, which I actually hope to express as the first four parts, including the series preface. I believe the frontline preface and introduction are crucial for understanding the initiatives proposed in this book and some key concepts related to public governance behind it.
Key Concept 1: Tragedy of the Commons
The tragedy of the commons, also known as Hardin's tragedy, was translated by Zhang Weiying in the last century as "public land tragedy."
A group of herders faces an open pasture, and each herder wants to raise one more cow because the additional profit from raising one more cow exceeds its raising cost. This seems profitable in the short term.
However, in the long term, the carrying capacity of a pasture is limited. If everyone raises one more cow, the average grass availability will decline, and the unit profit of all cows in the entire pasture will decrease. If every herder adds one more cow, the risk of overgrazing will increase, ultimately failing to meet the food needs of all cows, leading to starvation for all herders' cows. This is a tragedy of the commons.
In actual economic life, we see such scenarios quite frequently, especially in the environmental protection field. For example, in an industrial enterprise, the benefits of improving unit production efficiency go entirely to me, while the costs of pollution control are shared by everyone.
In this situation, there is a failure of coordination behind it, a market failure. There exists a contradiction in the rational person hypothesis.
Adam Smith stated that every economic agent would rationally maximize their interests. In the long term, each additional cow must harm the interests of other rational agents. So why do people only see short-term benefits? This is a conflict between a short-term rational agent and a long-term rational agent, which both conforms to and challenges the rational person hypothesis.
A simple explanation is that, in this pasture, perhaps my generation will not suffer the ultimate loss and negative externality effects, so I might not care about this issue, leaving it to future generations to handle. Many tragedies of the commons arise from such logic, ultimately leading to market failure.
Everyone's interest maximization ultimately leads to the maximization of negative externalities in the public domain.
The tragedy of the commons actually involves three discussion aspects: one is coordination failure, one is externality, and the last one is long-termism.
How to solve the tragedy of the commons off-chain? The economics community has two approaches: turn left and turn right.
Left: Move towards communism. Move towards nationalization, socialism, but in this case, the government needs to obtain all information at zero information cost, which is practically impossible. For example, in our country, there are policies in Inner Mongolia for returning farmland to pasture, and in North China, burning of cocklebur is prohibited. However, administrative power cannot completely penetrate this issue to achieve such thorough nationalization. The supervision cost is too high.
Right: Neoliberalism; privatize public resources; from a practical perspective, it is difficult to achieve fairness, which is akin to dividing a cake. However, it is challenging to delineate resources and the environment fairly. For instance, pastures have different climatic conditions, etc.
For a long time, mainstream economics has been caught between these two directions when facing the tragedy of the commons, trapped in the tension between market and state. In the last century, the representative of the public choice school, Ostrom, first explained through empirical research in the sense of political economy that the problem of public resources in common pools can be addressed through community self-governance, extracting and strengthening community power from the opposition of market and state: neither left nor right, community governance, local autonomy.
Ostrom believes that achieving such governance requires eight conditions:
7 and 8 are ideas about community stratification, while 3, 4, 5, and 6 are about how to design community mechanisms. 1 and 2 describe the foundational architecture. This is similar to DAO and on-chain governance.
Green Pill offers me two insights:
Community power can truly play a role in community governance and autonomy through web3 technology. Web3 provides a technical foundation, means, and bridge for theory.
Greenpill is not a way to solve problems but a sword, a tool of thought. Conflicts always exist in history, but regardless of the type of conflict, the underlying logic remains unchanged. "Responding to Changing Conflict Orders"
Key Concept 2: Can Blockchain Communities Become States?
Modern states have two concepts: sovereign states and nation-states. Sovereign states came first, followed by nation-states.
In modern states, citizens enter into contracts with the government, relinquishing part of their power to obtain protection for their individual life safety and property from the central government, and entrusting the central government to maximize their interests in competition between states through the exercise of national interests.
This image depicts countless British citizens facing the sovereign, with their backs to the observer. These citizens have transferred their rights to the sovereign, forming a powerful sovereign state.
The differences between blockchain and traditional states (there are two breaks):
Traditional states have territories, while blockchain is cross-ethnic and cross-regional;
Blockchain communities do not need to relinquish sovereignty. Although individuals may give up some rights, such as token staking, this is different from the relinquishment of sovereignty;
Traditional states have national identity, while in blockchain communities, this manifests as consensus.
Key Concept 3: Why Green?
The essence of the Green Pill is green.
In the podcast, it was mentioned that the Earth is green, and the community structure defined by the Green Pill should also be green; holders may lack professionalism and insufficient management of public chains, and large holders may pose a threat to decentralized mechanisms.
Short-term: From POW to POS, green and sustainable, carbon neutral.
Long-term: Solve the tragedy of the commons ------ for the sustainable development of humanity.
02.
Introduction: Definition
What is Green Pill? What is Crypto-economics? What is Regenerative Crypto-economics?
The term "Crypto-economics" has caused a lot of confusion, as people often are unclear about what it should mean. The term itself may be misleading, as it seems to imply that there exists a parallel "encrypted" version of the entire field of economics. However, this is a misunderstanding.
Crypto-economics is the application of cryptography and incentives to design a new system, network, or application.
Crypto-economics is not a subfield of economics but an application of cryptography that considers economic incentives and economic theory. Bitcoin, Ethereum, Zcash, and all other public blockchains are products of crypto-economics.
Regenerative crypto-economics: A regenerative version conducted when crypto-economics is unsustainable. It becomes a crypto-economic system that creates net positive externalities.
Disciplines related to crypto-economics include operations research and management, industrial and systems engineering, artificial intelligence, optimization and control theory, computer science and cryptography, psychology and decision science, political science and governance, philosophy, law and ethics, economics and game theory, etc.
From the perspective of a single discipline, conclusions can be quite one-sided. The following disciplines are all constrained by a core issue: how to allocate resources. In crypto systems, it provides a possibility for coordinated allocation.
In particular, crypto transaction systems networks provide coordination and scaling for resource allocation decisions of stakeholders with unique preferences, information, and capabilities. The allocation decisions made include:
• Physical resources, such as hardware and electricity;
• Financial resources, such as tokens or fiat currency;
• Social resources, such as attention, participation in governance, code contributions, or advocacy;
When resource allocation is unreasonable, uncoordinated, and unsustainable, traditional crypto-economics needs to transition to regenerative crypto-economics.
I summarize that regenerative crypto-economics has three characteristics:
Within the scope of sociological research systems, regenerative crypto-economics must combat tradition and normalization, as it is an innovation, and complete normalization is impossible for innovation; we need to re-understand normalization.
Regenerative crypto-economics must generate net positive externalities: more positives than negatives. (POW to POS) generates positives while avoiding negatives.
The basic building block is Impact DAO:
03.
Chapter One: Why?
What is Governance?
Governance can be broadly understood as a coordination mechanism for human activities. There are many governance models in human socio-economic life, but they can be simplified into three types: market governance, administrative governance, and community governance (Bowles, 2003). Market governance operates through market mechanisms, based on contractual voluntary transactions, characterized by "choice and competition"; administrative governance operates through administrative mechanisms, characterized by "command and control"; community governance operates through community mechanisms, based on community members' recognition and adherence to certain common values and norms, i.e., "trust and supervision."
In practice, these three are inseparable and mutually embedded. For example, a company in the market is subject to market governance but also cannot escape industry administrative governance, and internally, the company has community governance. In real life, market governance and administrative governance play the main roles, while community governance is quite weak.
In a fully competitive and well-informed environment, market governance can coordinate the autonomous choices of numerous market participants, achieving effective resource allocation. However, in the presence of monopolies, externalities, and information asymmetries, market failures will occur; among these, externalities and information asymmetries are common. When externalities are significant, price signals cannot achieve socially effective resource allocation, meaning the effectiveness of resource allocation cannot extend from the market transaction parties to the entire society.
The book mentions coordination failures:
Nation-states refuse to give up nuclear weapons because they want self-defense, but in doing so, they threaten the survival of the world.
Consumers refuse to give up fossil fuels because they want more convenient travel, even though burning fossil fuels poses a survival threat to the world.
Open-source software users use open-source software because they want to build things faster, even though long-term free use exhausts OSS maintainers.
Human cells coexist harmoniously, gathering all resources for better development of the organism; however, if a cell defects in this balance, it can become cancerous and ultimately destroy all other cells, taking over the entire body.
The essence of coordination failure lies in the non-cooperative behavior of mutually independent market actors (agents) in a game, which results in a lack of necessary coordination for many complementary, potentially win-win actions with positive externalities. In fact, coordination failure is a manifestation of the "prisoner's dilemma" game, and the "prisoner's dilemma" is universally present in human life; in a sense, governance coordination failure is the core issue of human social governance.
The phenomenon of non-cooperative behavior among agents, as described above, is very common. What we need to focus on is: what is the fundamental cause of coordination failure? How can Green Pill and web3 solve this problem?
There are many root causes for this phenomenon, one of which is the significant heterogeneity in agents' understanding, knowledge, and grasp of information. Insufficient information, uncertain information, and information asymmetry can lead to this heterogeneity, which can also lead to market failure. Another root cause lies in the credible commitment problem in dynamic games. In fact, the sufficiency of information and the credibility of commitments reinforce each other; even if market actors cooperate, externality issues can still lead to insufficient cooperation from the perspective of industry and overall economic development. Due to the widespread existence of coordination failures and externalities, market failures are inevitable in industrial development and upgrading, leading to the necessity of collective action ------ the possibility of community governance collective action.
However, in web3, information is public, and web3 has traceability, making deception carry a high cost of credibility. Web3 seems capable of solving this problem.
But it's not that simple; new tricks may arise ------ perhaps new monopolies may emerge on top of web3.
The above is my summary of coordination failure.
Coordination Failure of Public Goods
- Exclusive Public Goods Coordination Failure
Specific organizations and institutional constructions within the industry/organization domain, as well as corresponding public goods services:
Key technology development and standard establishment, quarantine of biological inputs and outputs, consumer rights standards, industry environmental protection and pollution discharge standards; digital infrastructure construction ----- 1. Lack of government administrative public service investment; 2. Lack of commercial operation models for maintaining off-chain infrastructure.
The foundational goal of the Green Pill: Establish a coordinated model for digital infrastructure construction in the web3 era - addressing public goods issues in blockchain cryptocurrency systems.
- Non-exclusive Public Goods Coordination Failure
Global, cross-industry coordination failure issues are not only market failures but also involve the mutual embedding of market governance, administrative governance, and community governance.
Back to Ostrom: The tragedy of the commons is a typical manifestation of coordination failure, and web3 provides the possibility of organizational forms for community governance to achieve transcendence: decentralization, transparency, sufficient scale, programmability, immutability, and global reach.
The ultimate goal of the Green Pill: Achieve coordination of community governance models on a global scale - envisioning governance coordination for human society.
There are also coordination failures of public goods in Web3:
Tangible investments.
Human capital investments: open-source software, love-driven initiatives that no one undertakes, including technological innovation and research and development.
Provision of exclusive public goods.
Exclusive public goods are currently provided through administrative management, with government investment; on-chain, it is digital infrastructure construction, with no government providing it, and lacking mature business models to maintain off-chain infrastructure; for web3, it is even more crucial that there is not even a traditional market and state image; how does the community organize?
Green Pill aims to solve the coordination failure of public goods in web3.
I personally summarize that the ultimate goal of Green Pill is to achieve coordination of community governance on a global scale. In one sentence, it is to use 21st-century technological means to realize a better human society.
At this point, I have some confusions:
How does web3 view the market and the state? Who plays the roles of the market and the state in web3, and in what form are they organized? Who guarantees the community's coordination mechanism and punishment mechanism?
How to face the rational person hypothesis directly?
04.
Chapter Two: For Whom?
The book discusses many points, which I categorize into the following six levels:
A Long-term Vision for Improving Human Society:
Long-term prosperity for humanity, achieving prosperity for higher-level needs.
Long-termism in prosperity, from me to us, from now to the future, from short-term to long-term.
B Improving Human Society at a Relatively Micro Level
Incentives for public goods resources and community creation.
Not just financial.
C Focused on Individuals
Critically-minded individual participants.
D Addressing Issues in the Web Era
Initiatives that have been launched, promoting development.
More efficient incubators.
Understanding super objects ------ which is also about constructing super objects.
E Focused on Sustainable Values and Social Forms
The equilibrium point of sustainable development economic models.
Finding a balance between institutional society and individual shaping.
More inclusive, open, and sustainable values, at both individual and social levels.
F A More Cyberpunk Future
The possibility of GameB.
Pioneers of the metaverse (in terms of anti-monopoly), more traceable public open-source incentives and exploratory incentives.
Discussion Q&A
Is community governance also part of market governance?
Terry: They are mutually embedded, rather than mutually exclusive.
What is the concept of GameB? Can you share a bit?
Xinyang: GameB is a social experiment initiated in 2013, gathering some thinkers who collectively address larger issues. In GameB, voluntary giving is encouraged, and collaboration benefits both individuals and the collective. They also mentioned using DAOs to learn from GameB's mechanisms. GameB is hard to explain in one or two sentences; you can refer to the following content.
Game B is a banner, a civilization of win-win, maximizing human prosperity.
Game B aims to create an environment that maximizes collective wisdom, cooperation, and promotes holistic thinking.
Game B hopes to create or develop the ability to penetrate complex matters without complex systems.
Game B establishes consistency within complex systems.
Game B is about a meta-protocol of super cooperation.
Game B is an infinite game, where the goal is not to exit; Game A is a finite game, where the goal is to win.
Game B theoretically provides the best environment for creative cooperation, thus maximizing inventive activities.
The most critical aspect of Game B is cultivating the sovereign capabilities of individuals and collectives, enhancing people's ability to discover different options and make decisions, rather than reinforcing the power of individuals and collectives.
Game B is a new type of social, economic, and political organization that uses people's real, long-term interests to achieve a healthier, cooperative society, improving the well-being of all.
Game B represents any cooperative, mutually beneficial system that defeats exploitative, adversarial systems through obvious appeal and addictive, voluntary participation.
Host Carol: Are there other applications of net externalities besides carbon neutrality, such as in governance?
Mian: DAOVC may have a positive externality effect, utilizing collective wisdom to create a decision-making organization.
Discussion on Carbon Neutrality:
Lightning: In 2013, there was a large-scale discussion, and everyone was criticizing POW; if we criticize the carbon consumption of cryptocurrencies (which is actually quite small), the SWIFT system consumes even more carbon; even if everything is based on Ethereum, it wouldn't be that consuming;
Host Carol: My research results also show that if the existing financial system also uses blockchain, it can save a significant amount of energy. Additionally, some Bitcoin mining uses clean energy because this clean energy is seasonal, and often mining uses wasted energy.
- There is a very classic saying that some mining machines in China previously utilized waste electricity in remote mountainous areas, which is actually a form of targeted poverty alleviation. The POW community has conducted extensive arguments on this, but it does not hold up because mining indeed consumes a large amount of energy, even more than some countries.
Yuxing Liao: I want to add something. I come from an environmental background, and many people are not only transitioning from POW to POS but are also exploring other solutions ------ carbon tokenization; VFI, Regen Network/Token Community. Additionally, mining does have environmental harm; there is energy consumption, and the updating of mining machines also involves environmental pollution (the manufacturing of chips uses heavy metals; wastewater and gas emissions). But why do many people still speak well of Bitcoin? Because it brings enormous economic effects.
Host Carol: Some teams claim to use clean energy; the comments say our Silicon Valley team is doing just that?
Remained to: We have done Sustainable Bitcoin Standard in Silicon Valley. In the environmental field, there is a concept called international carbon certification, which is a third-party certification for sustainable energy. We applied this certification concept to blockchain. If renewable energy is used for mining, using third-party agencies for verification, we grant them permission to issue green certificates, and the buyers are large asset management institutions.
Can you explain Ostrom's community governance methods in detail? Are there any cases?
Terry: The key point here is to break away from market governance and government governance, elevating community governance and community autonomy to a separate height for public resources and public governance. The case is quite complex; we can discuss it separately next time. Ostrom broke the opposition between market and government, innovatively proposing community governance.
Its application scenario is public resources, which are non-industry-specific, such as irrigation systems where farmers need to share public ponds.
Mian: What I can think of is the treasury.
Public Ownership Self-Assessment Tax
"Radical Markets" expresses an idea: possessing resources always comes at a cost; if you pay too low a cost, others can take that resource away. Similar to if the stability of a pegged stablecoin fails, then the upper layer will fail.
Implementing public ownership self-assessment tax on physical real estate has been proven impractical through practice, but it is a good inspiration.
Whether intellectual property/information economy is suitable for public ownership self-assessment tax is a question worth discussing.
Governance
Zhang Shengjie: Can community governance be understood as follows? Ten people are stranded on a deserted island, each with their own skills, and all production decisions are made through discussion; is this a form of community governance?
Terry: Definitely. I believe community governance generally has two basic forms: one is the survival community mentioned, and the other is industry associations or cross-industry associations, where everyone has their own identity and nationality, gathering together to solve a problem.
- Who pays for the infrastructure of Ethereum? Should users pay (by issuing more currency, issuing more tokens)? For example, who pays the Bitcoin developers? This is a form of governance. For Bitcoin developers, people donate to them. Ethereum completes this through ICOs and fundraising. Ethereum's governance is more responsible to the ecosystem rather than to shareholders. DeFi is the most classic example. For instance, if you hold this token, you do not make money; you only have voting rights, which goes against the principles of corporate governance.
Host Carol: I also have a coordination failure that was discovered while exploring in DAOs. Some proposals need to apply for funding, and Bankless has created a grant community organization to filter proposals and then publish those they consider acceptable. Now there is a veto problem here.
Zhang Shengjie: The whole world should also be a survival community, right? The operation of the entire world should also run in a DAO manner (the whole world is sufficiently decentralized, and everyone votes on the world with their own understanding through their actions).
Host Carol: I believe an ideal society is one where everyone has a weight; it is very difficult for everyone to vote.
Zhang Shengjie: The whole world should also be a survival community, right? The operation of the entire world should also run in a DAO manner (the whole world is sufficiently decentralized, and everyone votes on the world with their own understanding through their actions).
Host Carol: I believe an ideal society is one where everyone has a weight; it is very difficult for everyone to vote.
Event Announcement
The second reading session is tentatively scheduled for Sunday afternoon, April 17. Detailed information about the event will be posted in the Telegram group. Friends interested in the discussion are welcome to join the Greenpill Chinese community!
Green Pill Chinese Telegram group link: https://t.me/greenpill_cn
