Democracy Earth Foundation (Democracy Earth) is a nonprofit organization that seeks to develop non-financial uses for blockchain technology. Democracy Earth intends to find ways to use blockchain technology’s decentralized structure for social and political communication.

Background

Democracy Earth was founded in 2015 with the intent to find solutions to challenges that prevent the use of blockchain technology for social and political communication. ¹

Funding

Democracy Earth began as a project of Y Combinator, a startup-accelerator firm that provides funding for some left-leaning causes as well as tech startups through a competitive model that parallels seed funding in private equity markets. ²

In 2019, Democracy Earth received 218,824 in contributions, ³ had $250,753 in expenditures, ⁴ and reported $-296,821 in net assets. ⁵

Blockchain Approach

According to Democracy Earth, blockchain technology is designed to allow peer-to-peer communication without the use of a financial institution as a necessary intermediary that verifies whether the parties to a communication or transaction are in fact who they claim to be. ⁶ Blockchain technology accomplishes this through two different mechanisms, the proof-of-stake mechanism and the and proof-of-work mechanism. ⁷

The proof-of-stake mechanism determines the identity of an individual through stake; in other words, cryptocurrency pledged as “collateral” for the opportunity to verify the transacting parties’ identities, and in turn receive a fee for serving as the “validator” for the transaction. ⁸ This mechanism is reinforced by requiring numerous individuals to pledge collateral, and all receive a fee in exchange for validating the identity of the individuals entering into the underlying transaction. ⁹

The proof-of-work mechanism, also referred to as “mining,” assigns a given hash, in other words a string of characters and numbers, to each transaction, ensuring that only the verified parties can be identified through that hash. ¹⁰ The hash is produced by cryptocurrency “miners” who use a large amount of computing power and compete with each other to quickly generate hashes for each transaction. ¹¹ Miners are rewarded for their work with cryptocurrency and fees on the transaction. ¹²

Both proof-of-stake and proof-of-work accomplish non-centralized verification through computations ultimately motivated by receiving a fee on the underlying transaction. ¹³

Democracy Earth seeks to find ways to utilize blockchain technology to verify non-financial communications, which cannot rely on proof-of-stake or proof-of-work given the profit motive that makes those mechanisms viable. ¹⁴

Proof of Personhood Protocols

Democracy Earth has produced two general conceptual categories as alternatives to traditional blockchain verification and refers to them as “proof of personhood protocols.” ¹⁵

Subjective Substrate

The first solution is called the “subjective substrate” approach. This approach theorizes the use of some form of unique human activity, either actual physical activity, such as being present at a certain place at a certain time, or cyber-activity, such as being present on a certain website or participating in a particular online activity, that the other side of the transaction can personally verify. ¹⁶ The main concern with this model is that thieves can mimic the subjective behavior being used to determine the identity of the individual on the other side of a given communication. ¹⁷

Objective Incentive

The objective incentive approach is an alternative to the “subjective substrate” approach that seeks to replicate the high level of security engendered by the profit-incentive driven proof-of-stake and proof-of-work models. ¹⁸

The objective incentive approach seeks to replicate the profit-incentive-based mechanism by providing cryptocurrencies to a community of validators that confirm the identity of the individuals who seek to communicate with one another on a decentralized platform. ¹⁹ However, Democracy Earth notes that such a model is confronted with challenges, including the value of holding such cryptocurrencies and the possibility of betrayal. ²⁰ This is because unlike staking where a validator puts up collateral in exchange for the right to be a validator and in turn receive a fee, under the objective incentive approach a thief could potentially bribe the validator to provide a false validation. ²¹

Use Cases

Democracy Earth has argued that beyond basic communication, blockchain technology can one day be used to replace physical voting because the identity verification mechanisms made possible through blockchain will ultimately be superior to the security provided by traditional physical identity verification methods. ²²

Leadership

Santiago Siri is the president of Democracy Earth. ²³ In addition to leading this organization, Siri is a partner in Bitex.la, a bitcoin fintech company operating in Latin America. ²⁴

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2. “About” Y Combinator. https://www.ycombinator.com/
3. Return of Organization Exempt from Income Tax (Form 990). Democracy Earth Foundation. Part 1, line 8.  2019.
4. Return of Organization Exempt from Income Tax (Form 990). Democracy Earth Foundation. Part 1, line 18. 2019.
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6. Siddarth, Divya, et al. “Who Watches the Watchmen? A Review of Subjective Approaches for Sybil-resistance in Proof of Personhood Protocols” Democracy Earth Foundation. 2020. https://arxiv.org/pdf/2008.05300.pdf
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21.  Siddarth, Divya, et al. “Who Watches the Watchmen? A Review of Subjective Approaches for Sybil-resistance in Proof of Personhood Protocols” Democracy Earth Foundation. 2020. https://arxiv.org/pdf/2008.05300.pdf
22. “The Social Smart Contract” Democracy Earth Foundation/Github. https://github.com/DemocracyEarth/paper
23. “Democracy Earth” WeTrust. https://spring.wetrust.io/democracy-earth
24. “Santiago Siri” World Economic Forum. https://www.weforum.org/people/santiago-siri