Cryptocurrency: Redefining Trust and Money

I recently received the honor and privilege of joining a budding group of amazing human beings from across the world around a shared interest and belief via a community called Kernel. The belief? Cryptocurrency (and its underlying tech) has the potential to be the key driver of how we interact with and share truth in the world as we know it.

If you’re open-minded as to humor me for a few minutes, I’d like to share the core parts of an open course that over 2,000 of us to date have connected around in a peer-to-peer fashion, in a true decentralized spirit, during our 8-week Fellowship Program. The Billionaire founder of Ethereum, Vitalik Buterin, was even on the Zoom with us! (If you squint you may notice me with my dog Layla in the top right.) A sort of Manhattan Project, but for the betterment of society, if you will. Because, well…we only have one chance to get this thing right until dominant centralized corporate powers seep their tentacles further into people’s minds and distort the truth, algorithmically, for even more clicks and quarterly profits from advertising revenue to report during earnings calls.

The following article explores how cryptocurrency grew up around a reckoning of what it means to share truth in today’s society. Each module in the Kernel community’s open blockchain course is summarized below, and you can click on the link at the end of the summary for further reading on that topic.

✍️ THE MEANING OF TRUST

What is trust? And how does it relate to Bitcoin? Bitcoin began with the maxim “Don’t trust, verify.”

That is, trust can only begin where our ability to verify the truth ends and we understand exactly how and to what extent people can lie. And once we have determined this, we can write software that codifies those exact parameters.

“Strength in numbers” is another early bitcoin aphorism. Creating the numerical framework as a community around which the truth must be verified creates a space for what Andreas Antonopoulos calls ‘unassailable facts.’ The more the truth can be verified with shared rules and codes, the more easily a shared reality can be agreed upon.

Because Bitcoin source code can be audited by anyone, anywhere, the truth behind it is accessible in a way that wasn’t before.

http://kernel.community/en/learn/module-0/trust/

🤯 WHAT CREATES VALUE?

Ask yourself: “What destroys value?” Some things that may come to mind: disagreement, fear, deception, violence, anger, envy, and inefficiency. Therefore, the answer to creating value seems to be investing in a shared truth among our peers. How do we create shared truth? The simple answer is: through fiction—but not just any fiction. This fiction must employ an efficiency of language in order to be effective.

Blockchains demand a mathematical consensus. The question is: how many people can reliably share in your fiction’s truth?

Previously, the narratives we told within our tribes were usually kept on the record by one person whose authority outstripped everyone else’s. But because blockchains create a new “trust space” in which the truth is verifiable by every participant equally, there is room to explore a more democratic method of telling stories.

In 1995, Phil Zimmerman published the source code for PGP as a book. He wanted to use the First Amendment to get around the Arms Export Control Act. Cryptography is considered to be a weapon by many governments, seeing as it is so powerful. It has no need for legal or political protection, and therefore outside the realm of control of those jurisdictions.

Therefore, cryptography is now widely used to speak freely about whatever we wish, without necessitating trusting in corruptible institutions. This has profoundly changed the way humans make and share meaning.

http://kernel.community/en/learn/module-1/meaning/

💸 WHAT IS FREE SPEECH?

The definition of free speech has always hinged on its upper limit—what about hate speech and defamation? Aren’t those technically free speech as well? With cryptocurrency, this balance between two extremes is no longer needed. Everyone is free to speak, and the cost of any kind of meaningful speech, or ‘state-change’ is well-defined. Any speech act which changes the shared record is classified as ‘meaningful speech’ in this case. Thus, when “protecting” free speech is no longer the main goal, and speech acts are instead priced according to a set of explicit rules, the definition of meaningful communications expands tenfold.

http://kernel.community/en/learn/module-2/money-speech/

🦄 ACCEPTING BOUNDARIES AS FREEDOM

Freedom, in its simplest terms, is a combination of awareness and acceptance. It is not the denying boundaries but accepting them that leads to freedom of thought and to a realistic future for humanity, rather than the numerous rights and privileges the current political climate has us all believing we cannot live without.

Freedom instead comes from choosing which shared truths to trust, knowing how cheating is encoded within those truths and knowing the extent to which one can verify that cheating is not taking place.

In this way, the products we buy should not promise freedom in our use of them, but should instead make clear how they are limiting those very freedoms and what trade-offs we must make when using them. Again, the acceptance of limits like these is what constitutes true freedom.

http://kernel.community/en/learn/module-3/freedom/

🌐 TAKING BACK THE WEB

What does it mean to “take back the web”? What kinds of freedoms are we not willing to go without and what kinds of freedoms are negotiable? This module provides a history lesson on the world wide web–where it’s been, and where it’s going, combined with talking points around three core pillars of thought and an emphasis on the humility lessons covered in the first module. This reading will help uncover while people encode some incentives and not others and what it says about the kind of lives people want to lead. How do we separate ourselves from the extractive attention economy and live on our own terms? These materials will shed some light on those topics.

http://kernel.community/en/learn/module-3/

ℹ️ COLLECTIVE DECISION MAKING

So now we know that systems that don’t operate on blind faith require that we encode what it means to cheat. This creates a capacity for collaboration at scales previously thought impossible.

Modern mathematical tools are the key to modeling optimal collective decision-making. Tools that encourage collaboration without coercion and rules in which bad behavior is encoded and its costs defined are the means by which healthy, trusting communities are born.

The most important idea from this module is this: subsidizing small contributions to public goods the most and large contributions the least ensures that free-riding incentives will be minimized. This turns classical capitalism on its head—a system in which each individual is incentivized to act selfishly and only account for his own benefits and not the benefits to all others.

http://kernel.community/en/learn/module-4/liberal-radical/

ℹ️ CHESTERTON’S FENCE

Do you know the story of Chesterton’s Fence? It’s an old English tale about a man who decides he’s going to “take the air” while walking through his neighbor’s pasture but encounters a gate blocking his way. Falling back on the concept of “Free Reign” in which English farmers were required to keep at least one path through their land available for public use, the man kicks down the gate so that he may pass freely. However, he is met with an unwelcome surprise. (You’ll have to read the article for the exciting conclusion.)

This module discusses the lesson of Chesterton’s Fence and defines terms like “counterpower,” “custom,” and “commons,” in ways that turn some of the preconceived notions we have about these ideas on their heads, all to contextualize how we relate to one another amidst the ‘anarchy’ of the internet.

http://kernel.community/en/learn/module-4/

👨‍👩‍👧‍👦 ECONOMIC INCENTIVES:

You can build persuasive incentives for any kind of economic behavior, but how do we know what behavior we should incentivize? This module discusses an essay by Peter Norvig that discusses just that while coming to a surprising conclusion about wealth inequality. He suggests the initial distribution of wealth in the economy doesn’t affect the long-term distribution of wealth in as strong a way as the nature of the transactions. He also suggests that allowing people to trade only with those geographically near them makes little difference to the distribution of wealth overall.

http://kernel.community/en/learn/module-5/incentives/

👮 CENSORSHIP:

As anyone who has spent even a moment on Capitol Hill will tell you, expressing an opinion is not the same as communicating it effectively. Blockchains combine money and speech, creating simultaneous expression and economic action. If anyone across society can program incentives, then censorship resistance is a computing problem, nothing more.

Instead of putting pressure on legal systems to stop censorship, the pressure is on economic systems to make censorship no longer cost-effective. The goal is to build effective and complete threat models that outline all the ways in which censorship is beneficial.

http://kernel.community/en/learn/module-6/censorship-resistance/

CONCLUSION:

The purpose of these learning modules has been to try and fully understand what implementing a blockchain at a global scale could mean for humanity. There is no current model that we have that can hold the concept of an econo-linguistic network that utilizes currency as a protocol in which meaning is mathematically determined. Blockchain is ultimately about coming to terms with what truly makes meaning for human beings: a narrative communally created that gets to the heart of our shared truths.

THE LOGICAL EVOLUTION OF DECENTRALIZATION

Language was the first logically decentralized system—now, scaled blockchains are the next generation of logically decentralized systems that center the creation, negotiation, and transfer of value. Changes in the literacy of these systems have always brought about tectonic shifts in society.

The advent of blockchain means the advent of a society in which power is no longer owned by the lucky few. With computing power in the hands of everyone across race, class, and geography, the ability to create shared narratives built on trust and on a language that can be encoded with group values at every level means that the future of currency is more democratic and more secure than it has been at any point in its history. How will you use this new technology to communicate?

This was initially published on my blog, Huge Thinking, and I hope it brings some value to your life and how you look at problems. Consider following us on Twitter or like us on Facebook and stay tuned for more short educational pieces at the intersection of culture, technology, careers, science, and world news & politics that mainstream mass media rarely covers.