Ultimate democracy: how owning part of the exchange empowers every user, and might one day change the way the world is run

. 3 min read

Business isn’t usually about being democratic. But then, LocalCoinSwap isn’t about business as usual...

Some might say the cryptocurrency industry is pretty innovative and forward-thinking already, but we felt it was time for some specific additional disruption. Despite the newness of the industry some structures are definitely ripe for an overhaul, and as the innovation cycle escalates in speed, it’s amazing how quickly institutions and power become entrenched, even in the most forward-looking of sectors - and in our opinion, that’s exactly what the problem is with most cryptocurrency exchanges.

Being truly decentralised means distributing the governance as well. So that’s what led us to our unique LocalCoinSwap Cryptoshares model for decision-making.

Of course it’s quite a departure from typical practice, to put the future of the enterprise into the hands of the community in this way, even before we’ve launched. But we believe in our users, in the integrity and collective wisdom of those already engaging with our project - especially our active Telegram users, who are continually challenging us to refine our thinking and make our product better and better. This ongoing conversation has made LocalCoinSwap what it is today, and is part of our agile process for updating and developing over the lifetime of our roadmap. Whilst our team are naturally brilliant, they are necessarily limited in number. Our users however scale that insight, and by leveraging their input and power of selection we can continue to iterate towards the perfect set of tools for everyone.

Votes on the blockchain

Enabling democracy has always been a key potentiality of blockchain technology, that made perfect sense to integrate with our exchange. And let’s face it, the standard democratic process is long overdue for a bit of disruptive change itself. It might be 2018, but in most of the world, democratic decisions from local referenda to the highest public office holders are generally enabled through the high-tech solution of a pencil mark on a piece of paper, in a process largely unchanged since the ancient Greeks..

We have for a long time had the technology at our disposal to make this process quicker and more uniform through digital means, but what’s held most societies back from mass adoption of electronic election-counting is trust, purely and simply. For the same reason that most public examinations are still carried out via the excruciating process of handwriting essays at a rickety single desk, there is too much concern that digitising creates the risk of duplication, plagiarism and cheating.

But by building our governance tools on the blockchain using ERC20 smart contract conditions, LocalCoinSwap is following the example of forward-thinking jurisdictions like Estonia, which as a nation has created a digital wallet and signatures for all its adult citizens - and now conducts almost all of its operations on the blockchain, from healthcare recordkeeping to e-residency for global startups.

Launching a cryptocurrency exchange with blockchain-based democracy at its heart is surely easier than transitioning the way a nation state conducts its core processes of governance, but the principles are the same. This is fundamental to our business model, and the protocol underlying the LCS Cryptoshare voting token is provably achievable with existing technology, rather than depending on any fundamental advances in blockchain technology to be functional. This is a critical point on which our platform depends, unlike so many ICOs which require significant development breakthroughs simply in order to work as intended.

By tokenizing ownership of the exchange itself, we’re actually giving away a share of the business to each member. And our operational model ensures that collective decision-making is both proportionate - with an individual’s weight of influence being directly tied to the number of LCS Cryptoshares in which they have invested - and tamperproof, via an immutable distributed ledger. Every voter, from the single token holder to the CEO, can have confidence in the process by which their voice counts, and contributes to all changes and adaptations.

What kind of decisions will be put to the vote within the platform depends on the directions the project ultimately takes, because all decision-making will be incrementally steering the overall direction. However it is envisaged that the kinds of votes being conducted will include design changes and upgrades to functionality and features, choices about which new coins the exchange might choose to list and trade, and operational functioning choices that businesses need to make every day - in addition to really big-picture stuff, such as the future direction of the whole organisation. There won’t be any pressure to take part in every vote, no need to get involved in any choices on which you have no opinion or choose not to be a part of - but the opportunity will be there, consistently communicated and devolved, to have your say at all times.

Whilst every new business strives to differentiate itself in some way, we genuinely believe that our proposed governance structure, via issuance of LCS Cryptoshares to all investors, is truly unique - and the ultimate expression of digital democracy in action.

And we believe that one day, this will be the standard for all democratic and accountable organisations, from business networks to super-states - as distributed ledger technology becomes the normal way to facilitate engagement and choice.