Human coordination is the most powerful force on the planet. Together we build, reshape, or destroy anything we see fit.
For this to happen, trust is essential. Trust is the fertile elixir of coordination. Only with high trust, can we organize after shared pursuits to fulfill the best performance of our collective spirit. 1+1=3
From this vibrant environment, seeds of society grow and flourish.
“The highest form a civilization can reach is a seamless web of deserved trust.”
-Charlie Munger
The decisions made in these coordinating networks have the biggest impact on society. This makes networks, and the trust that runs them, of paramount importance for human evolution.
Our current networked systems are top down controlled, extractive, and exclusive. From a mis-alignment of incentives, these governments, institutions, and companies are disempowering individuals. With it, deteriorating the trust between individuals and third parties.
The industrialized nation-state model is outdated, and doesn’t properly serve the growing millennial workforce. We need to transition to a new model for information societies in this digital age.
“Each state nurtures forces that lead to its own destruction.” All of history testifies to the truth of this observation.
-Economist Hyman Minsky
The Noble Pioneer: Satoshi Nakamoto
Bitcoin showed us a whole new way to coordinate humans, powered by new technologies, values and ethics. This is the birth of crypto-networks.
Bitcoin uses blockchain technology. Blockchains (and similar technologies) are peer-to- peer databases. These networks set up an excellent environment for maintaining shared commons, with democratized access & participation
In 11 years of existence, its growth and subsequent appreciation has outperformed every asset class and company in the world. Even amidst the covid-19 pandemic, it continues to attract resources into the network. At the time of writing (Q3 2020), 1 billion dollars flows through it daily, with network providers pulling 10 million in revenue every day. A global presence supporting roughly 200 billion dollars in market capitalization (and growing!); with zero formal executives , zero marketing or sales team, and zero hired employees. All it had, was an inventor.
“Bitcoin is a tool for freeing humanity from oligarchs and tyrants, dressed up as a get-rich- quick scheme.”
-Naval Ravikant
Bitcoins impressive feat set an excellent example of a new form of global human coordination. Few even though such a thing was possible. From trusted incentives, the whole world was able to quietly build out the most secure hard money in the world with a 24/7 settlement processor.
All without any central planning, but rather a collective intelligence. Similar to the way swarms, ant colonies, the weather, or our own brain organizes. As we continue moving into an information society, software-based autonomous organizations are both anti fragile and adaptive to a hyperconnected world.
These networks will survive because they are faster, cheaper, and safer to build & maintain. Additionally, they will thrive; because they empower individuals by being bottom up, generative, and inclusive.
The paradox of trust, is that- the less trust something needs, the more trusting it can be. As trust in the old systems continue to melt; redefining trust into trust-minimized and trust- worthy crypto networks lays the framework for a peaceful revolution.
*The technology for this revolution--and it surely will be both a social and economic revolution--has existed in theory for the past decade.
*-Crypto anarchist manifesto, 1992
New pillars of trust
Blockchains are unique in the sense that, the information within it, is much easier to deploy than to destroy. On-chain is the natural evolution of online and on-disk
With on-chain, we now have a safe environment to deploy high-value things such as identity, contracts, property, and assets.
Self-executing encrypted open ledgers provide the highest economic assurances any network has ever displayed in the history of humankind. Making them a little more unstoppable... triple-entry accounting just got a major upgrade.
When we overlay mindfully-implemented consensus mechanism design, recursive incentives, and sound economics, these gamified economies become a new frontier to exchange and build value together. Blockchains therefore augment human coordination of talent and resources through continuous positive-sum games.
Transmuting promises into cemented digital contracts allows for individuals and teams to compress cognitive efforts and trust the environment. By building on what doesn’t change, we are able to make longer term commitments on where to devote our time and energy. As human action interacts with these digital laws, these networks behave like complex systems; and encapsulate the properties of such. (nonlinearity, emergence, feedback loops, adaptation, spontaneous order, network effects).
If nature is any teacher, then we know we cannot design for the outcome of these complex systems; it must trust itself to design an outcome together.
Chaos + order + trust= magic
“The forthcoming wave of decentralized data networks shifts us from zero-sum game capitalism to the compounded benefits of collaborating communities. Perhaps a good way to imagine such evolving coordination with minimal central control is the technological feat that is the modern city.”
-Fabric Ventures
These new types of networks do not discriminate on where you’re from, the income you make, your skin color, or whether you’re a robot or human. This flatness of treatment was necessary for the true potential of e-commerce. Contract law in the form of open-source algorithms offer protection against human emotions and corruption.
It’s easier to trust math- rather than loose promises. There is no environment of interaction with the same level of enforceability. “Code is law”, and in software it depicts what one can or cannot do, rather than what one shall or shall not do, which can only be enforced after the fact.
We’re taking the vending machine model and scaling it to any type of value production imaginable.
“By encoding commitments to continued cooperation in software, crypto-networks can engender trust at new scales, both granular (due to cost efficiencies) and macro (due to social scalability).”
-Jesse Walden
Crypto-networks use open source software to bridge two worlds. This is where cryptography, protocols, and interactive proof systems meets: money.
Why money? Money has been the most powerful coordination technology for all of history. Powering these networks with programmable money acts as an incentive layer for all participants, and creates a liquid market for the collective value created. Also, private property rights are crucial in application, and fundamental for a free flourishing society. Without secure private property rights, economic growth and social stability is simply a wish.
“Money is the most universal and most efficient system of mutual trust ever devised.”
-Yuval Noah Harari, Sapiens
Un-censorable programmable money, aka “money 2.0”, allows for the creation of scarce digital tokens that can be coded to encapsulate any type of access, ownership, or utility in a product or service of a particular network.
From abstracting communication of value into money games, we can effectively trade any mental concept with each other. Digital tokens in secure blockchains allow us to create highly unconfiscatible private property rights for anything imaginable.
Digital money, revenue claims, fractionalized land titles, license tokens, business equity, dividend tokens, loyalty points, airline miles, influencer meetups, franchise permits, event tickets, voting rights, lifetime subscriptions, etc.
Truly anything. On top of that, when you allow people to trade and contribute these new assets in a 24/7 global market, our organizational power becomes frictionless. This allows us to merge the best qualities of the internet ( open and democratic), the markets (meritocratic and resilient), and the firm (cost efficient and collaborative).
“Blockchains can be thought of as 21st century accounting and production systems owned by “the people,” and so it follows that the space has pioneered a new financial system to displace the old. This system is targeting a global audience, macro-and-micro resilience, cost-superiority, and services designed for the 21st century and beyond.”
-Chris Burniske
Strong Soil- Stronger Trees- Strongest Forest
With higher trust, you decrease friction for human cooperation.
This indirectly addresses Hayek’s famous “Knowledge problem”:
“The knowledge of the circumstances of which we must make use never exists in concentrated or integrated form,” explains Hayek, “but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.”
By socially engineering for all participants to have optimal alignment of incentives, there is a gravitational pull of mission critical information to travel from the agents of the network to the places where it matters the most.
Therefore, any organization that requires humans to coordinate with one another can be empowered with crypto networks. Governments, institutions, corporations, businesses, agencies, communities, and even social or political games can now be built with higher foundations of trust. Combining open source data, modular digital governance, and sovereign internet-native money, we aggregate all the tools to completely reshape mega verticals into a plethora of self-organizing horizontals.
The world is changing before our eyes… Here are a few restructurings that we see arising:
-Meme Nations:
Ever since the internet bloomed, the first clear business model to come about was the digitization of physical media. Words, sounds, pictures, and a combination of - has been completely reimagined with near zero marginal cost of creation, replication and distribution; massively democratizing access to knowledge. Today we are watching incumbent media giants lose consumer trust from top down management, while simultaneously seeing creators build organic communities from the media they create. People like real people. With crypto-networks, there is a huge opportunity for digital tribes to organize around the cloud, build their own economies with remote work, and enforce their governing laws with smart contracts. All from one person creating a meme that people rally around.
What excites us:
- DAO architectures: There are many different ways to govern organizations. The social methodology - along with the digital tools to implement these laws, are going to be of upmost value to the demands of global corporations.
- New jurisdictions: Digital technologies change the economics of violence, helping sovereign individuals rise in power. As legacy governments reduce in size and importance, they will compete for citizens with enticing services, just like businesses do today. When those services are outcompeted in the market with brand new “governments”, individuals will be better served, with more options available, no matter whose territory they live on.
- Universal IDs: How can we accumulate reputation among our identities, and prove our humanness, without sacrificing confidential information to third parties.
- Truth seeking media: The people demand truth, yet our media giants have a plagued conflict of interest due to their size and scale. Smaller teams with the appropriate leverage can serve the people better. Ideas won’t be silenced or withheld, and we will see the flourishing of more unique and specialized knowledge.
- Fractionalized Real Estate: Humans are becoming more global day after day. Owning 1 house and living in it all your life is becoming less appealing. As these global digital communities are established and growing, there are possibilities for land, neighborhoods, or buildings to be crowdfunded in a fair and equitable way. Co-living, co-working, and co- playing spaces can now be community owned rather than “accredited-investor” owned.
-Open Finance:
Typically plagued with regulatory constraints, developers can now build financial products or services in a borderless / permissionless / open fashion. The rise of open finance will redistribute financial tools to empower anyone with a smartphone to save, borrow, lend, and trade globally. Money will now move like information does today, without greedy third-parties leeching off other peoples value.
What excites us:
- Community currencies: Instead of 1 currency ruling huge countries, the micro economies of different regions can have more trusted and granular monetary & fiscal policy to fit the specific characteristics of it. Allowing for a healthy ecosystem of currencies that complement one another.
- Internet-native money: While nearly every crypto-network will need a “money” to tie together all participants; there will also be innovative products out there that are aiming to truly, and solely, act as good money for its users. While Bitcoin is the king in this space, there is still room for niche monies for particular use cases.
- Synthetic assets: Opening access to anyone in the world to have access to high quality uncensorable & non confiscatable liquid assets.
- Fair Charity: Today non-profits are just tax-efficient businesses with executives flying first class and eating 5 star meals. We need better systems to track the travel of capital and make sure that it gets to where we want it to go. Along with this, seeing how it’s used and the effects that it induces will keep donors more engaged with their social endeavors. -Near 0% interest credit: As crypto networks compress the cost of capital, we believe we have the infrastructure to provide individuals and businesses with cheap crowdsourced credit for their financial needs.
- Private Transacting: This is controversial, since most are quick to think that only criminals need privacy. While this may feed into some of criminals demands, it also provides security from them. Also, we believe privacy is a human right to protect against tyrannical governments. Everybody should have the option of privacy in their finances.
& quite frankly, the unbundling + shrinking of greedy banking cartels...
-Web3:
In the previous generation, users would give up their privacy and data to platform oligarchies, which would monetize and weaponize it for their own self-interest. A user- empowered web is arising to protect people’s privacy, and allow them to truly own their data, so they can do with it what they please. The internet went from “a thing” to “a place to be”; making it safe for the sovereign individual is crucial for collective creation in our digital world.
What excites us:
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Decentralized social media: Today, posting on facebook is like being a slave on someone else’s farm, with the illusion that you will eat some of the crops. With blockchains we can have an open ledger of record to prove who posted what & when. This allows for creators to own the seeds they sow, and take their harvests with them as they go. Intellectual property rights for creative work will be reinforced again.
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Marketplace 2.0: Marketplaces such as Airbnb and Uber are a net positive to the world. Unfortunately, as they begin to get comfortable with the marketshare they conquered, there is an inevitable financial cannibalization of their users coming. If these marketplaces can be more user-owned, rather than shareholder shark built, there is less leeching to support long term sustainability.
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Open source AI: Although training and education around machine learning & neural networks has increased, we have to break down the silos of closed-source AI for the safety and progression of our society. It was previously difficult to monetize AI unless it was closed sourced and delivered a-la-cart. As we are now seeing happen with software, commons based technologies can now be monetized by owning the value accrual of the utility and network that builds around it. The best AIs won’t be free, but they also won’t be exclusive to high networth entities as previously done.
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Breaking down the cloud computing monopolies that currently own the gateways of the internet: With the “power of the many”, we can now outsource computing services such as processing, transcoding, storage, and computation to the fragmented resources everywhere. Unlocking higher efficiency and cheaper costs.
-Industry 4.0:
Massive infrastructure networks such as transportation, energy, agriculture, and supplychains have historically been siloed for profit maximization. If we want to evolve as a society and bring down our communal marginal cost, we have to bring the sharing economy model to our infrastructure and work together to share our resources efficiently. Open sourced verifiable environment data, encoded commitments, and shared connected machines can dramatically bring down industry costs while restructuring trust for organic collaborative innovation. As this collides with other technological developments such as iot, edge computing, and machine learning; smart cities become a hard reality today.
What excites us:
- Robots-as-a-service: The machine economy is going to be much more resilient and efficient, with similar training and payrolls like humans do today. Lowering the barrier to entry for smaller businesses to have access to an automated workforce is essential to level the playing field.
- Transparent supply chains: Consumers want to know where their food came from, who crafted their clothes, and meet the hands that took the product from production to doorstep. Verifiable supply chains will help bring awareness to the consumer of where their products are coming from, so that attention and capital can be more conscious and trusting in global trade.
- Crowd connectivity: Setting up telecommunication towers were-and-are expensive. These telco companies got us to where we needed to go, but hardware costs are rapidly plummeting & we now have supercomputers in our pockets. There is a huge opportunity for people-powered networks to setup the infrastructure for more resilient telecommunications through mesh-network type architectures.
- Accountable agriculture: profit blinded farmers with yearlong monoculture practices have turned away from the second-order destruction of their actions. Verifiable trusted open source data with immutable contracts will help realign the economics of sustainable practices and help reconstruct the ecological state of earth, one farm at a time.
- Open energy grids: The energy infrastructure we have today is subjectively biased on keeping their doors closed to new energy sources, and peer-to-peer energy trading. As neighborhoods begin to implement their own production of energy, there is a need for an energy grid that doesn’t mind losing market share, in return for efficiencies in their local community
Redefine is Joining The Trust Revolution
The New World used to be what is now The Americas, but now the New World is now a move toward a digitized future, and software is at the epicenter of that.
We pursue and support open information networks enabled by free software that redefines the social trust stack and increases individual empowerment; by capitalizing, scaling, and co-creating.
Software is the encoding of human thought; the digital representation of organized and abstracted information. Making our only limitation the illusion of one. Just like the ocean of apps on a phone, or content on the web, the design space of these software economies are infinite.
Rather than wishing for the most empowering form of this, Redefine is helping builders, doers, and dreamers design and evolve the trusted networked economies of the future. It will not happen on its own. Experimentation and time is necessary for true innovation to emerge. A bumpy road indeed, but a mountain worth climbing.
As incumbent organizations drive their trust to the ground, we believe crypto-networks will be a powerful force swinging the pendulum in the other direction. Enabling society to create and distribute capital, knowledge, and wellbeing in a more decentralized manner. We believe trust is the fertile soil upon which societal coordination nourishes and grows. Once we stop treating it like dirt and start treating it like the life that it is, we will see individuals, groups, and nations come together again as one.
As a Sanskrit text written in about 1500BC noted: “Upon this handful of soil our survival depends. Husband it and it will grow our food, our fuel and our shelter and surround us with beauty. Abuse it and the soil will collapse and die, taking humanity with it.”
This crypto thing is a trust revolution. Bitcoin is just the beginning.
Footnote:
This paper was typed up in 2020. Although Redefine Earth had already been investing in web3, the thesis was strengthened after seeing the whole world be confused with their own government, money, and jobs. Crypto (now rebranded to web3) is a reason to be optimistic about the future, and this paper aims to explain what how and why it redefines trust.
Sadly, the author did not post it from stupid and irrational fears.
Better late than never!