Inside the Dark Ages of Blockchain Governance I
Far from transcending the flaws of human governance, blockchain networks have mirrored the very structures they sought to dismantle. Have we learned anything?
Inside the Dark Ages of Blockchain Governance I
A three-part series reprising an unpublished book from 2017/8, and more recent pontifications on the state of protocol, community, power, and speculation. Resurrected with the help of thinking machines from the east.
Blockchain Governance & The Echo of History
Blockchain technology, since its inception with Bitcoin in 2009, has been heralded by proselytisers as a revolutionary break from traditional systems of power and control. As time passed, particularly during what I have termed the "Dark Ages" of blockchain governance (2014-2019), it became evident that the utopian promise of decentralisation often gave way to the re-emergence of familiar, and often undesirable, historical paradigms. Far from transcending the flaws of human governance, blockchain networks have mirrored the very structures they sought to dismantle: mafioso cartels, feudal economics, and technocratic rule. Have we learned anything from this, in the intervening period? Are we re-entering a new Dark Age…or did we ever leave?
The formation of cartels within blockchain ecosystems is perhaps the most striking example of this regression. A particularly egregious but understudied case is of Dash, an early Bitcoin-like cryptocurrency designed with additional mechanisms to democratise decision-making and community funding through its masternode system. It came to pass, that power – and wealth – quickly concentrated in the hands of a few early adopters. These actors, much like the Gulf petriarchs of OPEC and the GCC or the monopolistic trusts of the Gilded Age, exploited extant system incentives and structural design to consolidate control. Dash’s masternode model, which required users to lock up significant amounts of native tokens to participate in governance and in revenue-generating duties needed by the network, created a feedback loop where wealth begat power, and power begat more wealth. This dynamic echoes the critiques of neoliberalism by Quinn Slobodian in Globalists, who has explored how elites often co-opt systems designed to distribute power, turning them into mechanisms for entrenching their own dominance. The result is not decentralisation, but a new form of recentralisation masquerading as democratic participation.
Similarly, blockchain governance has often replicated the hierarchical structures of feudal economics. Proof-of-stake (PoS) networks, for instance, have been criticised for creating a digital aristocracy where validators — those who stake the most tokens — wield disproportionate influence. This mirrors the medieval tripartite order of lords, vassals, and serfs, where land ownership dictated political power. In Ethereum’s transition to PoS, for example, the requirement to stake 32 ETH effectively excludes the majority of users from participating in governance, creating a system where only the wealthy are able to participate in revenue-generating activities and to participate in network governance. This dynamic aligns with David F. Noble’s critique of technological systems in The Religion of Technology, which often reproduce existing social hierarchies under the guise of progress. The promise of decentralisation, in this context, becomes a form of "decentralisation theatre," where the appearance of egalitarianism conceals the reality of concentrated power.

Blockchain governance has frequently fallen into the trap of technocratic rule, where decision-making is dominated by a small cadre of developers and insiders, with decisions being made out of sight of the wider body politic. This phenomenon is particularly evident in networks like Bitcoin and Ethereum, where core developers and network personalities entrench themselves over long periods of time and come to wield significant influence over protocol upgrades and governance decisions. The 2016 DAO exploit and subsequent Ethereum schism, for instance, revealed how technical expertise and cults of personality can be used to justify centralised interventions in ostensibly decentralised systems. This technocratic tendency resonates with Michel Foucault’s concept of power/knowledge, where control over information and expertise becomes a tool for maintaining authority. In blockchain networks, the gap between those who understand the code and those who do not creates a new form of epistemic hierarchy, where the Raymondian "priesthood" of developers dictates the rules for the rest of the community. Worse still, the appearance of a bazaar certainly does not preclude the existence of an inner cathedral; it may even presuppose it.
The history of blockchain governance is not a story of liberation from traditional power structures, but rather one of their re-emergence in new forms. From cartels to feudal economics to technocratic rule, blockchain networks have mirrored the very systems they were designed to replace; in some cases, we have gone backwards. This reinforces the view that technology alone cannot solve the deeply ingrained social problems of power and hierarchy. As Theodor Adorno observed, the tools of emancipation can easily become the instruments of domination. To move beyond these historical analogues, blockchain governance must confront the human tendencies that drive centralisation and inequality, rather than assuming that code alone can render them obsolete. As Audrey Lorde so famously said: “the master’s tool will never dismantle the master’s house. They may allow us temporarily to beat him at his own game, but they will never enable us to bring about genuine change.”

Cancer Culture Has Gone Too Far: A Critique of Speculative Behaviour
The speculative nature of token networks has become the defining feature of the blockchain and cryptocurrency space, driving both its rapid growth and magnifying its most significant dangers. Like a cancer. Whilst financial speculation can fuel innovation and investment, it often sabotages the altruistic or community-oriented goals that many tokenised projects claim to pursue. The embedded speculative objects within these networks — the tokens themselves — frequently incentivise behaviour that prioritises short-term gains over long-term sustainability, creating a tension between the ideals of decentralisation and the realities of market dynamics.
At the heart of the paradox is the unfortunate reality, evinced time and again, that blockchain networks, designed to decentralise power and value, often end up recentralising both. In many governance systems, voting power is proportional to – or at least correlated with – token ownership, meaning that those with the most tokens (insiders, early adopters or wealthy investors) invariably wield the most influence. This dynamic creates a tyranny of structurelessness in the parlance of Jo Freeman, where the absence of formal hierarchies masks the emergence of informal power structures. In Dash’s governance model, the accumulation of tokens by a small group of masternode operators (vide infra part 2) led to the formation of a cartel, where decisions were driven by the financial interests of a few rather than the collective good of the community. This mirrors the broader trend in blockchain networks, where the speculative nature of tokens incentivises wealth accumulation and centralisation, foreclosing any possibility of equitability.

The rise of initial coin offerings (ICOs) during blockchain’s Dark Age (~2016 onwards) led to a proliferation of projects that focus more on fundraising and market hype than on delivering meaningful products or services. Despite the creative poverty of blockchain culture itself, it is interesting to note that this phenomenon aligns with Theodor Adorno’s critique of the culture industry, where the commodification of art and creativity leads to a focus on profit over substance. In the blockchain space, the speculative frenzy around tokens can create a similar dynamic, where projects are valued not for their utility or social impact, but for their potential to generate quick returns. This speculative hype often results in levels of market volatility never hitherto experienced in any market context, leaving investors and users, particularly less savvy ones, vulnerable to significant financial losses and eroding trust in the broader ecosystem. This trend has recently reached its apotheosis with the “meme coin” craze. Jean Baudrillard presaged this moment in Symbolic Exchange and Death, almost fifty years ago:
“we now live in a world dominated by the free play of the ‘monetary sign’ that is beyond reference to any ‘real’ of production or even a monetary referent in the form of a gold standard. In this world, the idea of a ‘real’ value (of equities, of commodities, of houses, of anything) is meaningless as what matters instead is not value per se but infinite speculation…this new world is marked by the emergence of a ‘brothel of capital…not for prostitution, but for substitution and commutation.”
Jean Baudrillard, ‘Symbolic Exchange and Death: Revised Edition’, tr. Mike & Nicholas Gane, Theory, Culture & Society, 1976.
This rampant speculation also necessarily raises ethical questions around the relationship between technology and society. As Immanuel Kant posited, the moral worth of an action lies in its intention, not its outcome. The speculative intent behind many token projects creates enormous dissonance with the universally stated goals of fairness and community empowerment. As the older works of Jürgen Habermas (prior to him becoming a vile and irredeemable genocide apologist) might suggest, this requires a shift towards communicative rationality, where decisions are made through open, inclusive dialogue rather than through the speculative whims of the market.
Protocols and Their Evolution
The concept of a "protocol" in the blockchain space is both technical and ideological, embodying not only the rules that govern data exchange but also the social and economic systems that emerge from them. At its core, a protocol is a set of rules that dictate how participants in a network interact, ensuring consistency and interoperability. However, in the context of blockchain, the term has taken on a broader significance, representing a vision of trustless, decentralised systems where power is distributed and decisions are executed automatically through code. Yet, this vision is not without its tensions, particularly in the debate over whether protocols should be immutable or adaptable to changing circumstances.
The "Code is Law" philosophy, popularised in the early days of blockchain, posits that protocols should be rigid and unchanging, with all governance rules encoded in the software. This approach, rooted in the cypherpunk ethos, emphasises censorship resistance and immutability, arguing that code, once deployed, should operate without human intervention. However, this view has been increasingly challenged, particularly in light of events like the 2016 DAO exploit on Ethereum, where a vulnerability in a smart contract led to the theft of millions of dollars worth of Ether. The Ethereum community’s decision to rewrite the history of the blockchain, and redistribute assets based on moral arguments — effectively leading to a re-engineering of the protocol — sparked a debate about the role of human judgment in protocol evolution, and indeed led to a network schism creating two alternate timelines and thereby separate networks. As Carl Schmitt and Giorgio Agamben have argued, the sovereign is the one who decides on the exception, and in this case, the Ethereum Foundation’s intervention revealed the limits – and, indeed, an absence – of a purely algorithmic approach to governance.

The critique of "Code is Law" hinges on the recognition that code, like law, is not neutral. It reflects the values, priorities, and biases of its creators, and it operates within a broader social and political context. As Michel Foucault observed, power is not merely repressive but productive, shaping the norms and structures that govern behaviour. In the blockchain space, protocols are not just technical constructs; they are also social contracts that define how power is distributed and how disputes are resolved. The rigidity of "Code is Law" fails to account for the dynamic nature of both technology and society, where new challenges and opportunities constantly emerge. These shifts require protocols to evolve, not just to address technical inefficiencies but also to reflect changing societal values. It is worth remembering that the “law” part of “Code is Law”, as in the legal system, responds to changes in technology, culture, and politics. So, what is the “law” part of “Code is Law” even referring to?
The tension between immutability and adaptability is particularly evident in the evolution of Ethereum, which has undergone significant changes, from the DAO debacle to the ongoing transition to Ethereum 2.0, which is still incomplete at time of writing. These changes highlight the need for protocols to balance stability with flexibility, ensuring that they can respond to new challenges without undermining their core principles. As Paul Feyerabend suggested in Against Method, methodological pluralism — the idea that there is no single "correct" way to govern — is essential for innovation and progress. How can a formalistic, programmatic computational substrate embed such relativisms, whilst many stakeholders call for ossification? The work of Ben Green and Salome Viljoen on “algorithmic realism” suggests that a realist orientation is necessary to counter the possible harms for formalist modes of thought. While the "Code is Law" philosophy emphasises the importance of transparency and trustlessness, it often fails to account for the social and ethical dimensions of protocol design.
In the next instalment, we’ll go into the lifecycles of DAOs, informal power structures, and the complexities of community.