The biggest criticism of blockchain technology is generally that the decentralization and anonymity—or at least pseudonymity—it affords will also facilitate illegal activity outside the reaches of government, such as illicit marketplaces where you can buy anything from drugs to hitmen.
That’s what ultimately led the U.S. authorities to shut down Bitcoin-enabled marketplaces such as AlphaBay and Silk Road.
Of course, in certain circles of diehard crypto enthusiasts and cypherpunks, such online bazaars of freely traded contraband are part of the utopian promise of cryptocurrency—the ultimate expression of monetary freedom.
So how can a blockchain project seek to create greater decentralization but still operate in the confines of the law?
Enter Dfinity, which aims to create a sort of decentralized cloud computer—or “Internet computer,” as Dominic Williams, Dfinity’s president and chief scientist calls it. The project’s blockchain provides it a governance system that keeps the various entities on the network on the same page, combining human-driven decision-making with algorithmic artificial intelligence, or AI.
“The Internet computer has this algorithmic governance system called the blockchain nervous system, which can get involved in all kinds of different aspects of the network,” Williams explains on Fortune’s latest episode of “Balancing the Ledger.” “It might allow someone to submit a proposal to close down something that some people think would harm the network, like an assassination market.”
“On the other hand, the governance also processes network operations instructions, like create a new shard or partition of computers, or move this module of software from that place to this place,” Williams continues.
Still, what if the majority of “neurons”—Dfinity’s term for the network’s units of voting power—favor an activity that regulators (and many citizens) would consider harmful to society, such as an opioid distribution market?
If decentralized social networks, financial institutions and other enterprises Dfinity foresees are to succeed—especially if they are powered by AI automation—they may still need to prove they can govern themselves in a way that broadly conforms to societal rules and morals.
This article originally appeared in the The Ledger, Fortune’s weekly newsletter on the intersection of finance and tech. Subscribe here.