Like many technologists, blockchain technology starting with Bitcoin has been fascinating. I spent my share of 2017-2018 participating in speculation alongside tech coworkers, though only with money I was willing to lose (and I did lose most of it). I watched most of Tim Roughgarden's lectures about the math and theory behind blockchain, much of which was a repeat of my Computer Science masters degree coursework in distributed systems. I've also explored making my own smart contracts, learning a lot from this excellent video.
However, I am also extremely critical of what blockchain has been used for and the overall mindset of the ecosystem. The "number go up" mentality, the FOMO leading to aping into shitcoins, and the ruthless competitiveness of trying to find an edge in order to make money. Two of my favorite critiques of this are from YouTube: The Problem with NFTs and Web 3.0: A Libertarian Dystopia. These videos really hit on something deep lurking beneath the greed, which is actually more about fear and anxiety. In a world where it is increasingly hard to afford the "cost of living", cryptocurrency wealth - like the Robinhood and Wallstreetbets craze - offers a slim but palpable chance for the retail investor to escape the drudgery of their 9 - 5. Some of those who strike it big don't waste their money on ferraris, but rather buy their parents a home or otherwise secure their family's basic survival. This is what drives much of the frantic and desperate behavior, but unfortunately this is a space where everyone is definitely not going to make it - since these riches are coming from the same zero-sum profits as typical stock market trading.
Beyond the social and psychology critique, there is also a lot to criticize from a purely technology perspective. The best article I've found about this is on the moxie.org blog. They point out how this so-called decentralized tech is anything but decentralized in practice, relying on an all too familiar duopoly for relaying RPC calls. While smart contracts may be immutable, the frontend code which references the contract address is as easy to change as any React web app. When projects go to great lengths to achieve security, they wind up locking out all but the most technocratic users. Your non-techie friends are not going to self-custody when OpenSea offers a Visa integration, or FTX - oops, I mean Binance - offers an easy to use centralized exchange.
Despite all of the above, the reason I remain optimistic is because when you strip away all the hype and current applications, smart contracts offer a way to program a community's values and beliefs into their transactions. Programmable money - and much more via tokenization - is a blank slate for imagining entirely different forms of society and civilization. This can range from the most dytopian surveillance capitalism, where a World Central Bank can adjust people's access to resources on a whim, to utopian community currencies that offer an alternative to the global financial system, with much in between. The paradoxes afforded by this technology are difficult to sift through. When the vast majority of crypto projects are scams, and the remainder are primarily plutocracies where wealthy whales call the shots, there are still some rare silver linings in the bunch that keeps my hoping for what this technology can make possible.
In a space filled with bad news, I'd like to highlight just a few interesting ideas and success stories. In this episode, Jean-François Noubel imagines the creation of a parallel and separate vegan economy powered by Holochain (not technically a blockchain, but adjacent technology nonetheless). Whether you agree with Noubel's vegan ideas or not, he describes a compelling vision where communities that hold strong values can choose to create self-contained economies, detached from the greater financial system. As The Good Place TV show pointed out, there is really no such thing as ethical consumerism given the interconnectedness of an economy built on exploitation. Spawning parallel economies can offer an alternative, even if they are small in scope.
On the Bankless podcast, Ethan Buchman lays out the vision and principles of a blockchain ecosystem that is more about cooperation, monetary clearing, regenerative finance, localism, and more. Peers of Ethan expand on the Cosmos vision, which ultimately remains a "blank slate" from a values perspective but offers more optionality for individual application-specific blockchains to encode their community values into all layers of the stack. A concrete example of this in practice is the Kujira blockchain, which has a clear set of values around "grown-up DeFi", and only permits like-minded dApps to deploy on their chain.
The Circles UBI project is another interesting example of a community currency. They have set up a network where anyone can receive a universal basic income to spend among like-minded peers, and its flagship experiment in Berlin has a growing community. Their goal isn't to replace the entire economy, but to allow certain peer transactions in a local community - like tutoring or child care - to operate using a more equitable model. It’s interesting to imagine what it might look like if different facets of the economy operated with separate currencies, such that our performance in one area did not allow us to over-spend or over-compensate in another area. For example, imagine if the surplus profits earned by companies could only be reinvested in R&D, rather than extracted from the company by top earners and spent on items unrelated to the company.
A final nod is to the Breadchain Cooperative, which is a project that allows crowd funding via a common DeFi primitive: staking. Funders can stake the stablecoin $DAI (always close in value to $1 USD) in return for the $BREAD token, which can then be spent or donated among like-minded projects. The $DAI that has been staked also accrues interest via Aave lending, and that interest goes into a pool for funding future projects. In this way, anyone who believes in the values of the Breadchain Cooperative can choose to add some funds to help promote these values in new projects and initiatives. Some concrete examples that are funded by Breadchain include the mutual aid organization in NYC called PactDao.
In the midst of so many scams and projects that mirror the status quo, the blockchain ecosystem is not off to a great start. More than a decade into its existence, it does not have a lot of positive fruit to show for it. Still, the technological ability to make immutable smart contracts is a design space that is barely explored. While much of the existing research has been focused on using economic incentives to drive outcomes emerging from traditional game theory, I believe people will respond to a lot of incentives and motivations beyond the drive for economic gain. The resources linked above offer some fuel for imagination, and I expect in the coming years we will see impressive strides toward alternative forms of value exchange that can address real material needs while promoting community solidarity.
