Reimagining Democracy: What if votes were a currency? A crypto-currency?

Today, politics is a dirty word. The perception of political parties being corrupt seems widespread across the world.

Image Credits: Our World In Data

It seems that we live in a world where we do not trust those whom we elect to represent our choices, to make laws that govern us, to shape our society. Take a moment and let this sink in. Doesn’t this seem surreal?

Image Credits: Economist

Given this distrust in the political system, is it any surprise that voter turnaround in elections has been on the decline — almost everywhere in the world?

Corrupt political parties and falling voter turnout — what does this say about democracy as a form of governance? Isn’t democracy supposed to be the best form of governance mankind has invented? The peak of humanity’s socio-cultural evolution?

Maybe, it is time to ask if democracy suffers from systemic flaws? Maybe it is time to try something new, something radically different

Democracy: Principles vs. Tools: To begin, it is important to separate the principles of democracy from the tools used to realize these principles. Surprisingly, there is no consensus on what constitutes a democracy. In common perception, democracy is associated with elections, voting, presidents and prime ministers. However, it is important to realize that these are all tools to realize one particular form of democracy — a representative democracy.

Limitations of Representative Democracy: The first key tenet of this article is that the institution of representative democracy is a severely limited realization of democratic principles. These limitations span three dimensions:

First, citizen representation is extremely limited. The number of individuals whose preference an elected representative is supposed to represent is so large as to be essentially meaningless.

Image Credits: Economist

The problem is exacerbated in a rapidly urbanizing world with increasing population densities but without a corresponding increase in the number of representatives. Furthermore, since urban settings often have individuals from very different cultural backgrounds, their preferences are diverse too.

Is it realistic to expect that a single individual would be able to represent the preferences of such large & diverse communities?

Second, elected representatives have limited accountability. The only opportunity that citizens have to hold elected representatives accountable is often years away — ample time for incidents to be forgotten and perceptions to be manipulated. Since human memory over-emphasizes the recent past, elected representatives manipulate perception of their performance by populist measures closer to forthcoming elections.

Third, citizen cognition is not leveraged. The current model where default participation is limited to choosing representatives every few years does not engage the intelligence of citizens in solving the societal challenges we face today. Instead, it treats citizens as consumers offering them a menu card to choose their favourite representative.

To summarize, representative democracy does not scale well. With our societies becoming denser, more interconnected and more complex, the traditional tools of democracy are no longer effective.

We have created a Star Wars civilization, with Stone Age emotions, medieval institutions, and godlike technology. — Edward O. Wilson

Design Choices of Representative Democracy: Consider the following thought experiment: what would happen if we think of votes as a currency? Let’s call such a voting currency — GovCoin. In today’s representative democracy,

(i) GovCoins are in short supply — one citizen gets one GovCoin (vote) every 4–5 years.

(ii) GovCoins (Votes) have a very high negative rate: if you do not use them on election day, they lose all value.

(iii) GovCoins (Votes) are “accepted” by very few people: you can give your GovCoins to only pre-selected “candidates”

These design choices reflect fundamental design choices of representative democracy — they were well suited for the time when they were designed:

Since governance needs continuity and since elections were a costly and time-consuming exercise, citizens elected representatives once every 4–5 years. This also meant that elections had to be coordinated — so participation was coordinated to a particular election day requiring citizens to vote simultaneously.

Since the number of people who were interested in politics as a full-time profession was limited, the choice set of representatives was limited to a few candidates.

Are these design choices valid today? Do we really need citizens physically travelling to polling booths? With today’s technology? Must the choice of citizen participation in governance be binary: either jump in full time or be limited to vote once every 4–5 years? Aren’t there other forms of participation in this spectrum? Is limiting participation the only way to ensure governance continuity?

Rethinking Democracy: What if we reconsider the design choices of democracy? Let’s say we:

(i) increase the supply of GovCoins so that every citizen gets one unit every month;

(ii) relax the negative rate so that even if you do not “use” your GovCoin, you do not lose it i.e. you can accumulate GovCoins and use them at a later time;

(iii) enable you to give your GovCoins to anyone or any public issue / project.

Image Credits: Pixabay

What would be the impact of these design choices?

By increasing the supply of GovCoins, we inject liquidity into the system so that information (about citizens’ preferences & beliefs) can flow more fluidly. This effectively increases the participation potential of citizens in governance. Rather than limiting participation to once every 4–5 years, citizens can participate as much and as often as they want. This is a fundamental change when we consider institutions as information processing systems.

By enabling citizens to transfer GovCoins to anyone, we realize a form of liquid democracy where I can delegate my influence to you — maybe because I trust your judgement and believe that your choice will be beneficial to me as well. In effect, we have changed the default option of participation from ‘opt out’ to ‘opt in’ — every citizen can receive GovCoins from every other citizen. The total GovCoins a citizen holds is a measure of how much influence she holds in democratic decisions. We evolve from a binary system (elected representative or citizen) to a continuous spectrum where your GovCoin ‘wealth’ is measure of your social capital.

By enabling citizens to transfer GovCoins directly to a policy decision, we realize a form of direct democracy where citizens can express their preferences (and the strength of their preferences) on an issue directly rather than relying on a representative to do so.

By allowing citizens to accumulate GovCoins, we allow them to participate when they want. If I feel strongly about an issue, I can spend my GovCoins and influence this decision; If I am indifferent about an issue, I hold on to my GovCoins so that I can have a larger influence in future decisions. A small negative interest rate on GovCoins may still be needed to ensure that (i) citizens do not hoard the currency and (ii) to ensure that net influence of any individual is finite and time bounded.

Realizing Democracy: Given today’s technology landscape, realizing a democracy with new design choices is no longer a pipe dream. The potential to do this is here and now. A key enabling technology is blockchains (or Distributed Ledger Technologies) which allow the creation of new currencies. Implementing votes as a currency opens the door to realizing new forms of democracy. In fact, at koinearth we are developing these solutions using a combination of blockchains, mechanism design & machine learning.

At their core, Blockchain enables a secure, trusted ledger which can hold a record of account balances — in some currency. With votes considered a currency, blockchains have an immediate application of being used as a secure & trusted technological backbone of election systems. In fact, several such proposal are now actively being worked on. Some efforts are also underway to implement liquid democracy on blockchains and there are some very interesting problems to solve in this space. Important as these solutions are, let us try and push the boundary of how blockchains can transform democracy.

Blockchains enable the algorithmic creation, allocation & destruction of a voting currency (GovCoins).

Algorithm creation of GovCoins means a fixed & known approach to how many GovCoins will be created, how frequently will they be created and when will they be created. Since the algorithm for currency creation is implemented on a secure, trusted ledger which cannot be manipulated, the creation roadmap is fixed and non-manipulatable.

Algorithmic allocation of GovCoins means that the rules of who will be allocated new GovCoins are configurable and once configured are fixed & known. In accordance with the democratic principle of equal political opportunity, the allocation scheme may be ‘1 GovCoin for 1 Citizen every 30 days’. Interesting variants of this theme are also possible e.g. what is the equivalence of proof-of-work for GovCoins? Should some citizens get more GovCoins than others? What if they contribute more towards social welfare? Is there a way to earn GovCoins? These are interesting questions that we need to discuss as a society.

The maintenance of this currency (transfer, individual balance) are built in functionalities of the blockchain ledger anyway which enables transfer of GovCoins among participants and to public projects / issues.

Finally, the algorithmic destruction of currency can be realized using a negative interest rate where GovCoins lose their value over time — a scheme like this allows citizens to accumulate GovCoins but discourages long term accumulation. The exact form of decay is fixed and known once the algorithm for doing so is deployed on the blockchain. This is an important piece of the puzzle which can ensure governance continuity while still encouraging active citizen participation.

Beyond technical solution though, there are some interesting design choices in the interpretation of votes as a currency. Choices which will require discussion and intellectual contributions of political scientists, economists, designers, philosophers and the society as a whole for e.g. interpreting votes as a currency leads to a fundamental question about whether GovCoins can be exchanged for other currencies (e.g. US$). If I hold a certain number of GovCoins which I do not want to use, can I exchange (‘sell’?) them for another currency? Traditionally, selling votes for money is an unacceptable practice in most democracies and is punishable by law but new ideas like quadratic voting are beginning to challenge this. With votes interpreted as currency, it may be interesting to revisit these debates — controversial as they may be.

Key Takeaway: The primary objective of this article is to start the discussion on how democracy needs to evolve? Interpreting votes as a currency is one key theme — it is now technically feasible to do so. Is it desirable? Worth experimenting with? What are the benefits? What challenges remain to be addressed? Let’s start the discussion. Let’s take the first steps..


We are at the very beginning of time for the human race. It is not unreasonable that we grapple with problems. But there are tens of thousands of years in the future. Our responsibility is to do what we can, learn what we can, improve the solutions, and pass them on.- Richard Feynman.

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