Article link: Crypto is here to set us free.
We value provable scarcity.
Who’s we? I don’t value scarcity.
Addressing the first bits of the article, the idea of a free market, in theory sounds good. But free markets only work with regulation because monopolies are a natural byproduct of capitalism. But to be fair, a crypto solution could enforce regulation in the protocol, so I won’t dismiss it yet.
If we want to fully express what we deem valuable in this universe, we need to open up the design space for financial assets. If we want capitalism to more closely align with our human values, we need more assets to trade that aren’t just equities on the stock market.
I think I agree with this statement. In my ideal world, resources are no longer scarce, and capitalism would be about human or social capital vs. financial or resource capital. You could have tokens represent this value, a CloutCoin™ if you will.
One big issue I have is who enforces the validity of a token? Say you have a token representing a title to land or the deed of a house. What prevents someone from physically taking your space? You still need to rely on a central authority that you trust to uphold your token. Let’s see if this get’s addressed.
The idea of a market that operates 24/7/365 as opposed to business hours is appealing to me, more data means you can more truly assess the value.
Double-entry bookkeeping unlocked DeFi in the 1500s!
This statement doesn’t get backed up with facts, just said. According to the Wikipedia entry for Double-entry bookkeeping, it just means balancing your books, e.g. if a business takes out a bank loan for 10k to a Cash account, and a credit of $10k to a Notes payable account, and make sure that over time these values match. Double-entry doesn’t necessarily imply Decentralized Finance, as a centralized authority can do both sides of the bookkeeping. Maybe the author is trying to say that this idea is extended to DeFi because now different entities can handle different sides of the equation? But in a public ledger it’s still stored in one location, just now everyone can have a copy of the transaction to verify it. Regardless, I think this needs more thought behind vs. just saying this statement.
Cryptography sets us free.
Not necessarily. The consumer needs to know how to use it. If they lose their key, they’re fucked. Just look at all the people who lost millions of dollars of Bitcoin, which is now lost wealth forever, because they forgot the passwords to their hard drives. In a centralized approach, you can ask the bank to reset your password and they can verify your identity. Sure, this isn’t an insurmountable problem and it’s possible that future innovations in the space can solve this issue, but so far this article just says a lot of nice quotable soundbites without backing them up (a common trait in Web3/crypto components as they either don’t understand what they’re talking about or just want to make a quick buck off of the next person). Moxie Marlinspike’s first impressions of Web3 point out key issues that aren’t talked about a lot by Web3 proponents. Vitalik responds here and basically says that things will get better eventually, and we’ll see. But I still think Moxie’s point stands in that the average user doesn’t know enough/doesn’t care enough to set up their own node, and would rather rely on a centralized platform to manage it for you.
Inward flowing value in Web2 and TradFi makes work an uphill battle. Work is harder. You need to work hard just to stay in the same spot. Outward flowing value in Web3 and DeFi turns progress from being uphill to downhill. With aligned protocols at our backs, humans will be able to venture further into the frontier.
The article doesn’t explain why or how this is, they just present it as fact. How does Web3 intrinsically lead to value flowing outwards? In fact, a lot of Web3 coins/technologies have just been pyramid schemes to consolidate money from people who didn’t know any better to the creators of said schemes.
The whole section talking about the gold rushes and space races of the past just reads as an appeal to emotion vs. an actual argument for the value of Web3.
In contrast, Web3 takes a $10,000 airdrop and chucks it over the horizon and into the metaverse. Go fetch.
This sentence just sounds stupid, what does it mean? Why are you just chucking money into the metaverse, for what purpose? How does it help people? Where does this $10k come from? If you also value (provable) scarcity, you can’t throw money willy nilly, or you’ll waste your scare resource. Or, it’s not really scarce, so how is it valuable in this worldview?
Cryptography allows us to design social structures with a baked-in assumption of strong individual property rights.
To me this is just a dog whistle for radical libertarianism, i.e. people who don’t want to pay taxes and everything should be a free market. Perhaps I am wrong in assuming that about the author, this is just my gut reaction. But on that point, how does a free market solve social infrastructure, e.g. roads, public transport, hospitals, etc. Should only those with money have access to these things? What about social safety nets? You may argue that such things could be coded into the protocol, but then I come back to my same question as for land titles and deed, who enforces these things? At the end of the day, humans in the real world are the ones who are interacting with each other, not in the metaverse. Some real world entity needs to uphold the value of these tokens, and without a central/trusted authority this sounds like it will lead to anarchy.
However (now just talking about my own ideas), in my ideal world I don’t really see a huge government playing a big factor, things should just work for the people, like robots that build things, and a direct democracy to make decisions. Hmm I guess now I am rethinking my previous statement, say if these robots were controlled by decentralized governance and code, with behaviors decided by a direct democracy, that would be compatible with my ideal society. I don’t think this is what the author is arguing for though.
I guess I just want to pause here and say I’m not entirely against the idea of Web3 or crypto as a concept, just that the vast majority of existing “solutions” are just scams. There are very few blockchain solutions that actually need a blockchain.
The capacity for our systems to compete for our attention using financial assets over hearts and likes fundamentally changes how these platforms will behave.
I just disagree with this fundamentally. We shouldn’t be trying to financialize everything, the value of something shouldn’t be how much money it’s worth but how much good it does for people/the world. Currently we can use money as a proxy for that, but we should be seeking ways to remove money from the equation, not implicate it into every facet of our lives.
The founders, CEOs, and inner-billionaires. Platforms that try to distribute the value discover that it is quickly captured by the nearest intermediary; therefore it keeps power at the center.
Referring back to Moxie’s article, ironically there already is a lot of value captured by intermediaries already since everyone trusts oracles or the biggest player like OpenSea.
The whole section on enabling vs. extracting again doesn’t give any specific examples on how it will enable people, just that it can.
“How much can I extract from my users” evolves into “how wealthy can I make my community?”
Who is defined as “my community”? Where does this wealth come from? Am I taking it away from other communities? It must come from somewhere, because unfortunately money and resources are a zero sum game. They can be used for ventures that benefit many people, but when some party gains money, another loses it. Another reason why I think we should be seeking to solve scarcity, but redistribution of wealth is a good first step. I’m totally for the idea of taking wealth from the obscenely rich and distributing it to more people. I’m for going one step further and making sure everyone has equal access to everything. But that’s the opposite direction of libertarian crypto proponents, which in my anecdotal experience seem to be the majority of crypto proponents (but I could be way off base here).
The section about “Protocol Artificial Selection” seems like an overcomplicated way of saying that we iterate on software. Big whoop, we do that already for literally every piece of software, crypto isn’t unique in that regard. But I agree that it can be improved on and perhaps eventually be a useful system, but that doesn’t mean it currently is.
Financial insecurity plagues the planet. In order for society to evolve into the best version of itself, we must solve for abundance at the protocol level.
I agree with this wholeheartedly. And perhaps crypto can help us get there, but I want an article that offers actual, solid examples vs. nothingburgers that just appeal to emotion. How will we reach this ideal society? What will these protocols look like? Simply using a blockchain or making something decentralized doesn’t magically fix everything.
Culture emerges out of the social structures that guide us, and Web3 is building social structures that produce emergent positive behaviors for us and those around us.
I want to believe this, but I need to see real examples vs. memes. I agree with this sentiment in the article about improving culture and society, I just don’t believe that DeFi, at least in it’s current iteration, is what will do that. I think there needs to be bust to this boom so that all the scammers and pyramid schemers are shaken off and only the developers who believe in the technology and know what to do with it are left.
Generalized economic output is the most sustainable form of UBI that I can imagine. Rather than a government-issued UBI, we have protocol-issued rewards. Rather than receiving money unconditionally, our protocol-issued income is dependent on being active members of society.
This sounds pretty libertarian to me, just my gut reaction. I too believe in a society where everyone contributes, but what about those who are mentally ill, or disabled, or sick? Are they cut off from this society because they can’t actively contribute? Again, where are the social safety nets in this sea of protocols? This mindset of “I deserve more because I do more” is toxic to me, it should be “I do things because I am passionate.” And that passion can be enabled by having social safety nets and a baseline standard for existence. Even in this article they mention how a person was able to see the world differently after having money and not needing to worry about financial insecurity. That should be a human right.
We actually have to be engaged members of society in order to receive this basal level of income, yet this income is still permissionless, censorship-resistant, and universally accessible.
How is it universally accessible? Just because it’s on the internet? That doesn’t necessarily mean accessible, unless the author’s view of accessible is more narrow than mine.
In the “Building a Better Future” section the author at least addresses some of the potential issues, mostly around humans being corruptible, and says that if a protocol is prone to corruption, you can just move to another one. Sure, but what if damage is already done before the migration? How can one trust such a system?
Market value based on human values.
I’d argue we should only have human values, and take finance and markets out of the equation.
This is how we will scale Dunbars number from 150 to Planet Earth.
The author links to this NYT article, but it seems they didn’t even read it. Just by having P2P connections doesn’t mean you’ve increased Dunbar’s number (the maximum number of meaningful relationships you can have). Just because I transact with someone over the blockchain doesn’t make them my friend/a meaningful relationship. It sounds like the author just wanted to use some fancy sounding term to add credibility.
As it stands, crypto isn’t doing so hot on the whole “reflecting human values” thing.
Well, at least they’re aware of it.
While greed is necessary for blockchain technology to bootstrap itself, it is not the final form of the blockchain ecosystem. Greed is just the boot loader.
This remains to be seen. I hope they’re right, but I’ll believe it when I see it.
Here are some other article related to this space that I think are good reads:
- Opinion: Is Web3 a Scam? (this itself links to other articles)
- The Myth of Decentralization and Lies about Web 2.0
- This article feels very important here as it mentions how Web 2 started out with the ideal of decentralization and led to our current centralized platforms. There’s nothing inherent in Web 3 that will prevent this either, it’s up to the creators of Web 3 technologies to do it right and avoid centralization (which currently isn’t happening) and for users to reject centralization (this is harder, as centralization generally makes users’ lives simpler so why would they reject it). I really like the quote “One cannot compare the promises of web3 to the problems of web2.”
Related topics (would be better to clean this up and insert the links naturally in text):