Crypto and me (and you)
Welcome to my Medium where I will attempt to lay out my thoughts on the world and some of the monumental changes we are seeing. I strongly believe technology is shifting the ground upon which all our old legacy structures are built. Web 2 led the way in this disruption but none will continue this disruption more than Web 3 and Cryptocurrencies. My musings will discuss the changes we are seeing and the technology that is either driving this, or that will seize upon the opportunities these changes provide.
We are increasingly becoming a data-driven society and this is a trend that will continue. There are already concerns around how big tech companies, who are acutely aware of the value of this data, are able to collect vast troves of information on large swathes of the population. There are further concerns on how they use this data in the attention economy where it is used to keep us glued to our screens so these same companies can sell more advertisements. Algorithms are employed to update our feeds with information that keeps us scrolling whilst playing with our emotions, profiling us for advertisers, or even affecting our political decisions for a price. We have become passive users of the internet with little power to alter course or break free from this algorithmic oppression that instead of bringing us together, turns us into to disparate souls pitted against one another.
We have no ownership of the digital content we produce or we get paid a pitiful share of it’s value from centralized behemoths that dominate digital content industries. These same industries would be worthless without our content, our posts, our photos, our videos and even our likes, yet what do we get from it? Sure we get a free app that certainly can be useful, but is it really worth it to be manipulated, tracked and treated like cash cows whilst our communities receive no other remuneration to build out further? If you had to choose between an extractive app like Facebook or an exact replica that puts profits back into it’s community which would you choose? Are they even possible?
Enter cryptocurrencies
Let’s start at the beginning which means starting with Bitcoin. In 2009 Bitcoin burst into life radically changing the whole structure of the digital and financial world by launching the first network of value in human history that does not rely on centralized third parties to operate. For the first time data (in the form of bitcoins) could be shared without the need for a middleman to store, distribute or validate that data. In essence with Bitcoin the first true public data network was born. We know the bitcoin we have received is a bitcoin because the data from the public Bitcoin network confirms this. The way the Bitcoin network works prevents the corruption of this data by any third parties.
Global titans initially looked on with amusement, scorn and hubris without realizing what had been set loose on the world, and what will ultimately tear down their monopolies on money, society and “public” goods. Make no mistake, a financial marvel was born in 2009 with Bitcoin, but so was the first truly public good that could be trusted without the need for a central validator.
As with all new ground-breaking technologies people have took the underlying concepts of Bitcoin and iterated upon it to build out new and different public networks of data and value. The most well known and successful example to date is Ethereum. It brought with it the ability of smart contracts which allow us to take our digital value and program it to do things automatically. Two or more parties can now enter agreements that will automatically action given the fulfilment of certain conditions…“medic, medic, another middleman is down, they need a central bank liquidity injection stat!”.
To date the focus of smart contracts has undoubtedly been on how we can optimize and democratize our financial systems. The rise of Decentralized finance (DEFI) has shown the utility of smart contracts as financial instruments and has battle tested them, but this is just one aspect of their usefulness. We can now use them to build out Decentralized Autonomous Organizations (DAOs) that will allow global human co-ordination to blossom on a scale never before seen; all in the absence of a centralized point of control and far away from the motives of lobbyists, crony politicians and megacorps.
Time after time we are reminded of how our legacy organizations are manipulated to the detriment of the communities they serve for the gain of the very people we are supposed to trust. Enough is enough. We simply can’t trust our current “Public” systems of value and data not to take advantage of us, but we can design DAOs that prohibit these sorts of actions via smart contracts, distributed networks and transparency.
Imagine the breakthroughs in science we could make when data isn’t siloed off in individual pharmaceutical corporations, isn’t selectively published and is publicly accessible without paywalls. Imagine how much better and diverse music can be with a marketplace where music creators get a fair share of the rewards for their work and have a say in it’s Governance? What about a Web browser that respects privacy and blocks creepy advertising trackers whilst paying you for watching adverts? Cryptocurrencies as part of web 3 open up all these possibilities.
These new public networks of data and value have also spawned another technology called Non-fungible Tokens (NFTs). These allow people to establish ownership and provenance of any digital medium from art, to music and even tweets. We can even fractionalize NFTs now resulting in superior liquidity and greater patronage. All this leads to a different ownership of the internet; one owned by me and you and permissible to new forms of value and communities. Most of the recent focus of NFTs so far has been on the art world but this is just one use and there are many others such as ticketing, community membership, social tokens and in-game items to name a few.
When we take all these ingredients and put them together with a sprinkling of a few others such as decentralized storage, decentralized oracles and decentralized identity services we help bring life to this ecosystem; a system apart from centralized platforms such as Facebook, Google or indeed the Governments of the world. We no longer need middlemen to prove ownership, host our content nor take their tithe. We now have a future that sets us free from rent seeking platforms and organizations that seek to extract value, are prone to corruption, censor us, or manipulate us via algorithms. With these new trust minimized networks we will unlock abundant value and verdant communities in a Cambrian explosion of novel networks of human co-ordination.
This is just a brief introduction and I will attempt to explain in more detail in future posts some of the cryptocurrency based components of Web 3 such as DEFI, DAOs, Token Curated Registries, Community Moderation and NFTs among others.
I will finish with this wonderful video by Rektnews that expresses many of my thoughts of where we are and where we are going.
