- This paper presents Kokoro, a novel blockchain-agnostic method which allows for a Sybil-resistant decentralised identity verification (in this case, a verification of the fact that a certain amount of addresses to-be-credited with coins/tokens belongs to a corresponding number of unique, real humans and not to a bot or bots) of an arbitrarily large number of people, without introducing any centralised element.
- The method is scalable (an arbitrarily large amount of human provers can prove humanness any time it is required) and solves the Decentralized Identity trilemma, that is allows for self-sovereignty (anyone can prove their identity without the involvement of a third party), privacy-preservation (no uniquely identifying information is disclosed in the process) and Sybil-resistance.
- We find that Kokoro allows for a periodical crediting virtually any desired number of addresses with some coins/tokens, while being certain that approximately the same share of coins/tokens goes to each individual, real person (behind a credited address), all in a completely decentralised manner.
- Furthermore, we argue that AI models pose no threat to the method’s Sybil-resistance in the foreseeable future.
Kuroi Hakuchō, “Kokoro: an algorithmic wealth redistribution”, April 2023.
Core Research Question
- How to design a decentralised and censorship-resistant method of crediting, in a distributed ledger operating on the basis of a PoS consensus protocol, an arbitrarily large set of addresses with coins/tokens, while making sure that each of the addresses credited belongs to an individual, real person?
- PoS protocols, and in fact the legacy financial system as well, tend to lead to the centralisation of ownership of monetary units, which, in the context of blockchain, is known as the “rich getting richer” problem. Since the ownership of wealth in a PoS protocol tends to centralise, so does the control over the protocol itself. This inevitably leads to the emergence of self-serving plutocracies and could be counteracted only through redistributing wealth (coins) to individual actors independently of their financial status or control over any assets or resources, i.e., on the basis of their humanness. Furthermore, in order to be effective, this would need to take place without delegating the task of said redistribution to any centralised entity which could exploit it to its advantage, i.e., it would need to occur in a decentralised manner.
- Minting coins and allocating them to some addresses is a trivial task. The challenge lies in verifying that each of the credited addresses is associated with an individual human and not a bot. Sybil-resistant decentralised identity verification is a subject of ongoing research, with projects such as Idena, Humanode or Encointer spearheading the effort. However, the dilemma between scaling such verification and maintaining its decentralisation remains unsolved. By delegating the task of verifying humanness to a centralised entity, decentralisation is lost; trying to keep the process decentralised means that the amount of verified personhoods increases very slowly.
- We propose a blockchain-agnostic method of an algorithmic wealth redistribution, where approximately the same share of coins/tokens goes to each individual, real person. From day one, it allows for a periodical identity verification and subsequent allocation of an equal share of newly minted coins to almost any person on the planet willing to receive it.
- The proposed method is presented in a detailed way.
- We argue that said method is AI-resistant.
- Implementable within almost any PoS protocol, Kokoro can facilitate the creation of coins which can be easily adopted worldwide (as everyone can get a share of them and start using it) and which redistribute wealth (and, implicitly, power in underlying protocols).
Implications & Follow-ups
- While financial systems in general, and PoS blockchain protocols in particular, tend to centralise ownership of and control over money in the hands of relatively few individual participants, no simultaneously decentralised and scalable method of counteracting this was invented. The present paper proposes such a method.
- The paper presents the first method for redistributing wealth and control in a PoS consensus protocol in a perfectly decentralised (i.e., no centralised element is needed), scalable (i.e., any number of people can participate) and secure (i.e., no bot can successfully claim a share of coins) manner. In fact, it is the first decentralised and trustless method of global wealth redistribution in general.
- If implemented within a PoS blockchain protocol which allows an arbitrarily large number of nodes to take part in consensus, such as the protocol proposed in Karada: an objective and truly decentralised Proof of Stake protocol (Kuroi Hakuchō, “Karada: an objective and truly decentralised Proof of Stake protocol”, https://docdro.id/iSg1jx8), the sustainability of the decentralisation of ownership of monetary units would be ensured by the decentralisation of the consensus within the underlying protocol and vice versa. It could be guaranteed that (while not trying to completely equalise everyone) the outcome of consensus would always depend on the will of a majority of people, therefore it could be a uniting, universal source of trust.