Quote note (#200)
Crypto-core of the XS Moldbug:
Internal security can be defined as the protection of the shareholders’ property against all internal threats — including both residents and employees, up to and certainly including the chief executive. If the shareholders cannot dismiss the CEO of the realm by voting according to proper corporate procedures, a total security failure has occurred.
The standard Patchwork remedy for this problem is the cryptographic chain of command. Ultimately, power over the realm truly rests with the shareholders, because they use a secret sharing or similar cryptographic algorithm to maintain control over its root keys. Authority is then delegated to the board (if any), the CEO and other officers, and thence down into the military or other security forces. At the leaves of the tree are computerized weapons, which will not fire without cryptographic authorization.
Thus, any fragment of the security force which remains loyal to the shareholders can use its operational weapons to defeat any coalition of disloyal, and hence disarmed, employees and/or residents. Ouch! Taste the pain, traitors. (Needless to say, the dependence of this design on 21st-century technology is ample explanation of why history has not bequeathed us anything like the joint-stock realm. It was simply not implementable — any more than our ancestors could build a suspension bridge out of limestone blocks.)
(Emphasis in original.)
Crypto-sovereignty is huge (and on the to-do list here). ‘Formalism’ is a place-holder for crypto-architecture. ‘Sovereignty’ means keys.