Cryptocurrency is rife with problems, we know that, otherwise Bitcoin would have been adopted years ago. The good thing is, a lot of these problems can and will be addressed. When we think of problems, we think of things like hacks, security, volatility and accessibility. Regarding cryptocurrency funding on the other hand though, a founder of Ethereum, Vitalik Buterin has located a major problem in a paper, co-written by Zoë Hitzig of Harvard University.
The problem, free riders.
By definition, a free rider is a person or entity that profits from the under-provision of goods. According to Buterin and Hitzig, this is an issue that plagues the development of many cryptocurrency projects, mainly those in ICO and coin offering stages. The paper; ‘Liberal Radicalism: Formal Rules for a Society Neutral among Communities’ also highlights a solution to this problem, a problem that works in a similar way to ‘Quadratic Voting’, called Liberal Radicalism.
According to Coindesk:Whilst free riders are causing an issue that will see funds drained out of various crypto projects, liberal radicalism aims to address this, in order to establish a format that allows funding to be increased incrementally.
According to Coindesk, Hitzig has referred to liberal radicalism as a real-world solution:This is an exciting cross over of crypto, economics and politics. Buterin and Hitzig are offering a very theoretical concept, one that could help to remove the free rider problem that currently cripples various cryptocurrency and blockchain projects. Of course, liberal radicalism isn’t a fully trialled and tested solution yet:
It looks like, this could be a solution to a problem we didn’t even know we had.
