The Enormous Promise and Potential Harm of DLTs Like Blockchain
By Raman Frey, Founding Partner and CCO at The Bureau
What do we do with distributed ledger technologies (DLTs) and the cryptocurrencies they’ve enabled? Will they wreck our world or save us from our own worst impulses? Are they just a bunch of hype?
Powerful forces are gathering quickly, to harness this new terrain of blockchain and cryptocurrencies, in ways that will, in my opinion, worsen our challenges.
Goldman Sachs is 110% in; their job, in a nutshell, is to make rich folks richer. Facebook is also in; their job is to suck in and monetize your attention. And IBM, and Microsoft and almost every forward looking bank you can think of, in one form or another is in.
Many of the smartest, best organized and most industrious professionals and organizations on earth have been converted to believers in the power of DLTs, very quickly, for a lot of reasons, but mostly because the reinvention of money is pretty attractive. And their job, whether they wish to own their charge or deny it, is to assimilate these new technologies to support the current economic paradigms, for better or worse, without much in the way of reflection. They can polish any backlash to their profit grabs with philanthropic giving later. Such is the pattern of oligarchs attending charity events.
Those who most benefit from the status quo see how the trust-propagating and dis-intermediating potential of these new technologies threatens their holds on the manufacture of scarcity, the drivers of buying behaviors. These are ideas that threaten their monopolies and syndicates, the ways they produce and sell goods and services and insure their own margins.
DLTs and cryptocurrencies aren’t inherently good or bad. Like so many tools, it all depends on how the dominant platforms are built.
What would our world be like if any two people or organizations could safely and securely transact directly, without middle men? Where would that leave the centralized behemoths we think are invincible, somehow permanent? Talk about subversive potential. What if most banks were no longer needed? Or insurance companies?
And what are the two most hazardous, most unsustainable and damaging of these economic trends, those fueled by the status quo, the ones that most of our powerful people and organizations fight to perpetuate?
The first is wealth polarization, a concentrating of privilege, influence and ownership. The Gini coefficient of wealth distribution in American society reveals that we may be the most economically unequal culture the world has ever known. About one in four billionaires lives in the U.S. and recent economic policy has made the situation of the working class particularly desperate (see this recent report from the United Nations). A few of us are drowning in opulence, and vast numbers live in fear and hunger for basic necessities. Those trend lines end with a winner take all scenario, a single person essentially owning the world.
The second unsustainable trend is infinite economic growth on a planet of finite resources. Despite the fact that the last hundred years have seen more people lifted out of poverty and into economic subsistence, growth without constraint is a cancerous version of commerce. At the great end of capitalism is a planet sized tumor, everyone insatiably buying everything at breakneck speed.
And these two trends are deeply baked into the fabric of commerce as we know it, one interwoven system of global capitalism, today’s unquestionable orthodoxy.
Even the sharpest and most well-respected business and political leaders speak of the world’s challenges as though infinite growth and jobs for the sake of jobs are the panacea to end all our ills. We both benefit and suffer from a monoculture of commerce, and a failure to imagine the dozens of other alternatives, such as those described by David Graeber in his tour de force book, Debt: The First 5,000 Years.
Our system of exchange today is at its well spring, its source, set up to incentivize hoarding as heroism, greed as a virtue. The system then attempts to control the worst actors (most “successful”?) through rule of law, through regulations and through progressive taxes, ideally calibrating to land most folks in the middle, a robust middle class. Almost nobody is looking to the invention of new economies from scratch, but perhaps they should. Perhaps with DLTs they now can.
We know our current system is unsustainable and probably, eventually catastrophic. And we have a forcing function. Technologies like AI, automation, robotics, blockchain and cryptocurrency, will exploit the endless drive to cut costs and improve efficiency, eliminating workers’ jobs in great sweeps, faster by an order of magnitude than anything during the Industrial Revolution. There won’t be retraining fast enough. Self-determination will be forced on a public that will include many good human beings who are essentially unemployable.
And this could be a good thing. Most jobs suck. And most people who even love their work report lives of extreme “time poverty,” stress and neglect of friends, family and community. We have already in many ways lost touch with our most fundamental social needs as mammals, and the rewarding activities of wandering, in our heads or in the world, without transactional objectives; all this automation could return this to us. City dwellers are experiencing a crisis of isolation and inability to connect with others without a clear goal. Not every interaction needs to have an explicit ROI to be life affirming.
HOW IT WORKED THE FIRST TIME: THE INVENTION OF THE INTERNET
When the ARPANET was invented and slowly grew into the internet, it was for the most part dismissed as a novelty for geeks. This was seen as an invention of uncool people and basically a way to make mail nearly free and instant. The powers that be, I’m barely old enough to remember some of these discussions, dismissed it as a gimmick, not a particularly good way to make money or get stuff done.
And so these geeks were pretty well left in peace and they invented some gorgeous and artistic architecture, typified by “net neutrality.” In broad strokes, this was an intention that eventually everyone would have access to a computer. And everyone who did, would then have access to all (or almost all) of human knowledge. Learning and invention and cooperation would accelerate as never before, and loads of unintended and positive trends would ensue, such as the use of social media in the spread of democracy.
Basically, the internet got some breathing room to widely distribute the benefits of universally accessible information and to a lesser degree communication. The baby web did this without “profit harvesters” screwing it up, inventing hierarchies and scarcity models that would only include those who could pay, and therefore exclude most of humanity.
But as it grew, centralized powers saw the potential. They created “walled gardens” and figured out how to monetize the attention economy through advertising. This transition accelerated over time and internet companies became the engines of super-capitalism, the ability to become multi-billion dollar powerhouses with just 10 or 20 or 50 employees (Instagram), virtually overnight. And then net neutrality, after years of corrosive attempts to sabotage it and the good fight to maintain it by organizations like the Electronic Frontier Foundation, fell. The sales funnels now benefit from unequal access, tiered consumers. Social media, gaming, every site and product is constantly tailored to grab your attention and keep it, sharing none of that revenue with you, but giving you all this “engagement” for “free.”
AND HOW IT’S UNFOLDING THE SECOND TIME: THE INTERNET OF VALUE EXCHANGE
Now imagine this future, powered by DLTs.
Every single person in our world gains access to a computing device they can own, real estate in the digital world.
These devices deliver all of human knowledge in a secure way, a way that uses clever “information provenance” tech such as Civil, to deliver information in ways where credibility can be accurately assessed.
Imagine in this future this device also gives every person or organization relatively equal access to cryptographically secured digital currencies (cryptocurrencies or crypto for short) and a variety of virtual marketplaces free of corruption or, for the most part middle men. Here they can sell or buy any good or service imaginable, a global bazaar. In this future, a buyer in Vladivostok, Russia could meet a honey maker in Coconut Grove, Florida, and buy her wares directly, for shipment, without any fear of it being a scam, without fear of his credit card data being compromised or a centralized database of his savings or personal information getting hacked.
But there’s more.
Imagine if this computing device also functioned as a Universal Basic Asset. Imagine if a protocol like the hylochain built by Constellation Labs could use the wasted resources of that device’s processing cycles and memory to provide passive cryptocurrency income for that person.
I sometimes dream of dying old, happy and fulfilled in that world, a world without want, where the floor on Maslow’s Hierarchy has risen and left nobody behind, a totally non-porous social safety net. And I bet there are a lot of brilliant people from the old economy who would find it very fulfilling to abandon our monoculture of capitalism, the system we inherited, and join us in building this happy future of numerous complementary economies.
And there is more still…
Kate Raworth, an Oxford professor, outlined what a sustainable economy of moderation could look like, living in balance with renewable resources on earth and treating the entire biosphere as our charge. In this economy, we are responsible for biodiversity as stewards, as protectors, of what visionary Buckminster Fuller called our “Spaceship Earth.” Professor Raworth’s ideas, “The Green Donut Economy,” could be our best opening models in crypto-economy design, and I encourage you to watch her TED Talk here.
WHAT DO WE DO NOW?
So what do we do now?
It’s time for some bluntness. My excitement over this potential to make our world so much better runs into a few forms of recurring frustrations.
Kind, compassionate and caring people are often fractured, easily distracted and ineffectual. Most of the folks with robust moral compasses lack the ability to execute, certainly in ways that would be revolutionary, that would truly transform our world.
Savvy business people, who can curtail self-awareness and moral responsibilities, talk themselves into massive profiteering, regardless of how it’s achieved, so long as nobody goes to jail. This is usually couched in terms like “fiduciary responsibility to the shareholders,” and other grown up business talk, and defended as amoral, when in fact it is a form of moral cowardice. These folks will accelerate massively the negative trend of wealth polarization, the funneling of profit into a few hands, for the nascent internet of value exchange. Their future economy explodes in extracting value out of the natural world, without including the externalities usually left off of balance sheets, such as clean air and water. This is sometimes referred to as “the tragedy of the commons.” They are working around the clock to invent a hyper-capitalism, that will concentrate almost all the benefits of DLT in the hands of a tiny already rich and powerful elite.
Facebook, for example, with its unprecedented influence, cannot pretend to be Switzerland on the global stage; this company deeply affects elections and public opinions on…well…everything. There are no amoral choices at Facebook, just ethics revealed in behaviors. But our current form of global capitalism strongly discourages Facebook from clearly stating their ethics and living them fully in ways that might in the short term diminish the “eyeball minutes” of their users. Saying unpopular stuff, speaking truth to power, is virtually never best for the short-term bottom line, though we might argue it’s great for long term brand building.
We have a moment, right now, and a closing window, where that happiest future I described above is still possible, has not been regulated out of the realm of possibility, nor subverted by the great centralized authorities that shape our world. But it’s closing; it really is. We need to get our shit in gear, take the microphone away from scams, hype and speculation, and build real systems that benefit billions of people.
If we don’t marry the best in both of those broad categories, if we don’t win employees away from those behemoths with the promise of finally and fully aligning profit motive with ethics and intrinsically fulfilling work; if we don’t win massive quantities of converts to this revolution and build solidarity across the “co-opetition” of idealists, we will lose.
And we’ll be stuck with Hyper-Capitalism. I promise that the story of Hyper-Capitalism won’t end well for most of us.
SO WHAT DOES THE MOVEMENT LOOK LIKE?
The movement I hope for is shaped by cooperative effort, practical idealists coming together to make The Green Donut real. This movement will give us all gorgeous UI that makes digital self-sovereign identity a reality, granting union-like leverage to every person operating online, perhaps through an idea called platform cooperatives.
We need rallying center-points that open up discussions of shared vision, organizations like the Center for the Fourth Industrial Revolution, part of the World Economic Forum.
Through multi-stakeholder discussions, with subversive companies like Consensys, governments and NGOs at the forefront, we can invent a plan of action. Such a plan requires consensus building and an ego-diminished “objective orientation” that sets loose hundreds or thousands of experiments in the invention of token backed micro-economies. And some of those behemoth companies may surprisingly choose to “disrupt themselves,” devolving power to people everywhere because it’s the right thing to do and will help them to remain relevant.
Most of our experiments in the invention of crypto economies will fail. Some will show great usefulness in achieving limited scope outcomes, such as incentivizing rural fishermen to adopt sustainable fishing practices, ecotourism and even be compensated (in crypto) for regenerative behaviors at scale, such as seeding reefs with new corals. I’m an advisor for Root Project, which shows promise in building such altruistic economies.
A few of the most successful invented economies, I hope, using our collective genius, will have the potential to offer viable global alternatives to the monoculture of “growth is always good” and “hoarding is heroic” capitalism as most of us have known it. These new economies may or may not, in the end be a panacea and they may or may not resemble entirely the Green Donut, but if we are organized, industrious, smart and persistent, we will get there.
And we will give the gift to future generations of a planet with rebounding biodiversity, where living in balance with ecosystems and abandoning the scarcity mindsets of our old world is the norm, where cooperation and a “growth mindset” are more valued that zero-sum winner-takes-all systems.
We will give these future generations a way to lead humanity out of late stage capitalism’s selfish behaviors and aggressive dehumanization of those in need, a future where profit goes to those who maintain our Spaceship Earth in ways that allow all life to flourish and persist, where most of us can enjoy unlimited access to learning, exploration and wonder.
Original published here