Great summary of how blockchain technology and crypto assets could evolve capitalism in exciting new ways. Lowering barriers to entry and friction in markets enables more experimentation and innovation. But we have to build the infrastructure in a responsible way that aligns with social values. Crypto idealists need pragmatism.
Packy: while it might be true that "Crypto’s ideal state is to make capitalism more effective" -- I would find that, well, Boring.
The REAL ideal state is for crypto to solve Number 8 (right after your cutoff):
> Alignment of business interests with long-term societal welfare.
By decentralizing ownership, on-chaining externalities, and enabling incorruptible public accountability, crypto could -- and should --make capitalism (more precisely, “marketism”) not merely more effective, but more -aligned- with the greater good we all want.
It is admittedly not obvious how to get there. But like you say, the first step is imagining the right possible future. Do that, and you may write something even socialists would find Not Boring!
That’s a superb essay. This is great bear-market analysis and really strikes at the heart of where we’re going. Having just been at the All-In Summit it was fascinating to witness some quite visceral pushback for crypto’s only speaker, Brian Armstrong. This sort of content would have helped him articulate why the flash in the pan doesn’t define crypto as a speculative trading game but can be so much more.
Great read, as usual. In the vein of "big ways crypto could make capitalism better," it also seems like crypto's speed of contracting, communication, etc. could improve the nature of the firm in the Ronald Coase sense.
At a high, hand-wavey level, my sense is that 1) some of capitalism's biggest benefits come from enabling people to specialize in what they do best and collaborate in ways that increase their impact, 2) per Coase, a limiting factor on 1) is the time and effort it takes to get people to agree to do a particular thing for a particular amount of money (thus the nature of the firm), and 3) people in crypto seem to be at least trying to develop various technologies that would mitigate 2) beyond what non-crypto tech could do.
In theory, this would look like more people having more chances to work at their highest level of impact by working across multiple projects, and getting paid more as a result. It's an intriguing possibility, to me, in part b/c there seems to be a growing appetite for that sort of thing (see "overmployment"), because enabling tech would help, and because some of crypto's features genuinely seem better-suited than non-crypto tech.
Lots of devils in lots of details, of course, but it seems like one of the more interesting ways crypto could make capitalism a better.
Yowza. Capitalism has its good points, but it also has many bad points.
I strongly recommend reading up on modern economic thought not originating with UChicago "efficient markets" nonsense. Cory Doctorow's en-shittification thesis is also readily apparent - which notably describes/predicts events in marketplaces in capitalist economies.
Crypto, blockchain, etc - still extremely unclear there is any actual benefit to any of this beyond a way to fleece the suckers. Among the more egregious issues which I have repeatedly highlighted: actual law as practiced in reality is still nowhere remotely "settled"; the notion that marrying this unsettled area with a new, even less settled area ("smart" contracts) to arrive at a net better result is naive at best.
At worst, it is an attempt to pull power away from established law and precedent and into the hands of programmers. Ugh.
Loved the blog Packy! The specific part where you compared how early crypto is to other hyped up technologies put an idea in my head: Has crypto grown so quickly and, thus, been critiqued so heavily so early on due to the technology being financialized right from the get go? Would love to hear your thoughts on this, cause I'll probably write a blog on the topic.
Yes, Capitalism is Good. And God is Good. But one must know what the "capital' of capitalism is, and what "god" one is referring to, before one says let's go full steam ahead.
The reason these become (well, not the god question) important, is because crypto has the capacity to spawn economic systems of our choosing based on the capital(s) of our choosing.
For example, we are designing an EcoCommerce Economic System based on the capital of natural capital. Our crypto is tethered to this capital to create a virtuous cycle.
Ps - Malthus was right, but for the wrong reasons. Our planet is finite and the economy is "eating its seed corn". Somethings cannot be replaced by humans no matter how much money they have.
Great summary of how blockchain technology and crypto assets could evolve capitalism in exciting new ways. Lowering barriers to entry and friction in markets enables more experimentation and innovation. But we have to build the infrastructure in a responsible way that aligns with social values. Crypto idealists need pragmatism.
Packy: while it might be true that "Crypto’s ideal state is to make capitalism more effective" -- I would find that, well, Boring.
The REAL ideal state is for crypto to solve Number 8 (right after your cutoff):
> Alignment of business interests with long-term societal welfare.
By decentralizing ownership, on-chaining externalities, and enabling incorruptible public accountability, crypto could -- and should --make capitalism (more precisely, “marketism”) not merely more effective, but more -aligned- with the greater good we all want.
It is admittedly not obvious how to get there. But like you say, the first step is imagining the right possible future. Do that, and you may write something even socialists would find Not Boring!
Great article. Thanks for being a voice for crypto.
That’s a superb essay. This is great bear-market analysis and really strikes at the heart of where we’re going. Having just been at the All-In Summit it was fascinating to witness some quite visceral pushback for crypto’s only speaker, Brian Armstrong. This sort of content would have helped him articulate why the flash in the pan doesn’t define crypto as a speculative trading game but can be so much more.
every reader should memorize and keep the first 5 paragraphs in mind, as new frontiers open to promise and investment. Well done!
Great read, as usual. In the vein of "big ways crypto could make capitalism better," it also seems like crypto's speed of contracting, communication, etc. could improve the nature of the firm in the Ronald Coase sense.
At a high, hand-wavey level, my sense is that 1) some of capitalism's biggest benefits come from enabling people to specialize in what they do best and collaborate in ways that increase their impact, 2) per Coase, a limiting factor on 1) is the time and effort it takes to get people to agree to do a particular thing for a particular amount of money (thus the nature of the firm), and 3) people in crypto seem to be at least trying to develop various technologies that would mitigate 2) beyond what non-crypto tech could do.
In theory, this would look like more people having more chances to work at their highest level of impact by working across multiple projects, and getting paid more as a result. It's an intriguing possibility, to me, in part b/c there seems to be a growing appetite for that sort of thing (see "overmployment"), because enabling tech would help, and because some of crypto's features genuinely seem better-suited than non-crypto tech.
Lots of devils in lots of details, of course, but it seems like one of the more interesting ways crypto could make capitalism a better.
Yowza. Capitalism has its good points, but it also has many bad points.
I strongly recommend reading up on modern economic thought not originating with UChicago "efficient markets" nonsense. Cory Doctorow's en-shittification thesis is also readily apparent - which notably describes/predicts events in marketplaces in capitalist economies.
Crypto, blockchain, etc - still extremely unclear there is any actual benefit to any of this beyond a way to fleece the suckers. Among the more egregious issues which I have repeatedly highlighted: actual law as practiced in reality is still nowhere remotely "settled"; the notion that marrying this unsettled area with a new, even less settled area ("smart" contracts) to arrive at a net better result is naive at best.
At worst, it is an attempt to pull power away from established law and precedent and into the hands of programmers. Ugh.
Loved the blog Packy! The specific part where you compared how early crypto is to other hyped up technologies put an idea in my head: Has crypto grown so quickly and, thus, been critiqued so heavily so early on due to the technology being financialized right from the get go? Would love to hear your thoughts on this, cause I'll probably write a blog on the topic.
Yes, Capitalism is Good. And God is Good. But one must know what the "capital' of capitalism is, and what "god" one is referring to, before one says let's go full steam ahead.
The reason these become (well, not the god question) important, is because crypto has the capacity to spawn economic systems of our choosing based on the capital(s) of our choosing.
For example, we are designing an EcoCommerce Economic System based on the capital of natural capital. Our crypto is tethered to this capital to create a virtuous cycle.
Ps - Malthus was right, but for the wrong reasons. Our planet is finite and the economy is "eating its seed corn". Somethings cannot be replaced by humans no matter how much money they have.