- AMERICAN INSTITUTE FOR ECONOMIC RESEARCH - Max Borders - DEC 16 -
“What cryptocurrency threatens is the very existence of the nation-state, which will have to pivot quite radically in order to survive the coming onslaught from the blockchain. The resulting institutional framework might look entirely alien once the dust has settled.” – Justin Goro, from “The Great Hard Fork”
In the Tikal region of northern Guatemala, a vast complex called el Zotz hides under thick growth. The complex includes temples, plazas, and thoroughfares once teeming with Maya. This once-great civilization eventually drifted into obscurity. Some say a mixture of drought and excessive foresting caused the inhabitants to abandon the city. Since its heyday a thousand years ago, the jungle has been unforgiving in its vengeance.
A tidal wave of flora has swallowed the buildings, roads, and temples, turning mighty stone structures into mounds nearly indistinguishable from the surrounding landscape. Mother Nature can be relentless as she uncurls her snakes or unfurls her fronds. So the city has been returned to nature in unparalleled beauty and biodiversity. On the ground, of course, one can easily get tangled among the vines or bitten by insects, which once made it tough to map the city. But in 2016, archaeologists began using laser-guided GPS imaging technology to discover el Zotz’s true extent, which is nothing short of breathtaking.
A Lesson in the Leaves
Still, el Zotz is an object lesson. Intellectuals have turned the history of collapses like the Mayan’s into Malthusian horror stories. And these stories are not entirely wrong. But a different interpretation recommends itself: Though humans can design big, amazing things, our plans and designs will eventually succumb to natural systems, which — though robust and orderly — are unplanned and undesigned. So, instead of seeing the jungle’s revenge as nature defying human progress, we can see it as the victory of evolved systems over intelligent design.
But this doesn’t mean there’s no more room for human ingenuity.
As we enter the next era, we will start to mimic the patterns of natural systems such that our human systems are more resilient. And, indeed, if we can use better protocol design to unleash a thousand systems that take their cues from Darwin. Nature, too, is about well-designed protocols, even though those protocols are not designed by a designer.
DNA is catallactic. DNA is code. And in biology, code is law. At the macro scale, we get planetary ecosystems that include such wonders as the Great Barrier Reef and the rainforests of Tikai.
In the age of cryptocurrencies and smart contracts, the codebase is akin to DNA. With code, we can create systems within systems (within systems), which make up the layers of a technological and sociological stack. According to the codebase, these layers express different properties, which gives rise to a dizzying array of possibilities. Such possibilities amount to five areas of transformation in how human beings organize themselves. These are incommensurable with some of the older ways. In each case, therefore, we have an evolving technological ecosystem that threatens to replace the old order, which are the various temples to power. It turns out that, like the temples to the Mayan Gods, our modern temples require their own forms of blood sacrifice.
The first temple to power is the Nation-State with its grand legislatures and executive palaces. Taxes supply blood for the gods in this temple. But a wave of technological solutions is allowing people new capabilities to self-govern.
The decentralized autonomous organization (DAO) is one such system, which can be instantiated in any number of groups using any number of consensus mechanisms. As more and more groups experiment with self-government using DAOs, the more they’ll see the power of programmable incentives and decentralized consensus mechanisms. Indeed, the most promising feature of DAOs is not collective decision-making at scale. It is the built-in right of exit. Such a threat of defection looms over any system, which has to provide value to keep members.
The temple gods are angry, though. Their very identity is wrapped up in the urge to control. They feed off our fears and the rents that are built into the control structure itself. Power’s priest class exists in a command hierarchy that offers them a sense of place, which they protect through increasingly illiberal means. And they worship in the Church of State on whose altar you will be sacrificed over and over again. Such is the essence of Centralism. Instead of experimentation, variety, and choice in governance systems, they believe theirs is The One True Way.
The more Decentralists challenge their authority within a burgeoning ecosystem of cryptocurrency tokens, digital ledgers, and forking systems, the more draconian they have become in their vain attempts to clearcut or burn our nascent rainforest.
The second temple to power is the Central Bank, with its esoteric symbols and shadowy meetings. Around them are supplicant banks, which serve as satraps in a system of private profit and socialized losses. All-seeing eyes and pyramidal structures are apt for a group that controls the sorcery of transmutation. In other words, these reverse alchemists need no longer turn gold into cheap alloys. They can magically debase the currency simply by adding zeros. Your blood sacrifice is inflation, which is nothing more than a tax on the powerless.
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