Imagining a decentralized economy

Imagine the leverage Government has over you, simply because the barrier to switch to a competitor (i.e. a different country) is immensely thick. You have little choice but to help fund the proposals set forth by your native representatives.

Imagine the leverage that Facebook has over you, simply because they accumulate and learn from your history, which you can’t remove from their service and repurpose on a competing platform. It takes a ton of work to stop using some online services after committing to them because they’re the only places where certain things exist. Despite being virtual, data is real and it has value.

Imagine the leverage that the concept of profit has over you, simply because you need to align yourself with profit to be sustainable. Unfortunately, by doing so you must be causing a tradeoff for someone else — someone must be willing to pay. This is an entirely productive tradeoff if the person is willing to pay just as much as what you are honestly willing to receive, and the person is willing to pay because they prefer your service — not out of pure necessity. If you are receiving more than the true value of the exchange, the difference is the profit mechanism’s leverage. It can be wasteful, yet the mechanism’s only affordances to keep that margin small are self-enforcing free-market competition and manually-enforceable public policy.

Several hundred years ago, we imagined that the separation of Church and State would benefit both institutions. When the two operated together, the government held too much leverage over people transcendentally, and religion held too much leverage over people politically. Apart, both could better pursue their purposes free from the other’s influences.

Imagine today a world where, for very similar reasons, we chose the separation of Economy and State. Instead of an economy dictated by nations and state-issued currencies, this world accommodates many economies you could opt to participate in.

Imagine a world where Facebook was its own economy, owned by all of its users who post and share. Imagine a world where by being a Facebook user, you are also a Facebook shareholder and earn additional ownership of the network as it grows. Imagine a world where you have voting power over how Facebook changes over time. Imagine a world where, if you felt your voice wasn’t being heard and you didn’t support the direction Facebook was going in, you could trade some – or all – of your participation in the Facebook economy for whatever other economy you believed in. Imagine a world where the new wealth in an economy did not go disproportionally to the 1%, or if it did, you could trade your participation in this economy for a more fair one, thus decreasing the net-worth of the unfair one. Imagine a world where the way a software company makes money is by owning part of the economy which it creates alongside its users. The network is initially worthless, but the company and users are incentivized to give the network value together.

This world is possible today, and it exists in the form of decentralized economies. This world is possible because the purpose of the economy is to manage the exchange of value, which has transitioned to be pretty-much entirely digital over the last 20 years. The blockchain tech community is actively working incredibly hard on making these options more accessible to you. Behind all of the headlines and price volatilities, there is some incredible thinking going on by the people actually invested in the sustainability of these communities. If you’re interested, I encourage you to research, ask questions, and get involved.

Again, we don’t have to fight for this reality, it’s already possible — we just have to trust it’s possible by exchanging dollars into whatever virtual economy we each believe in. There are already several out there, but we’re in the very early days and there are many more being designed at the moment for all kinds of purposes. It may not be Facebook any time soon as they have little incentive to change their business model, but legitimate decentralized competitors will rise, and when they do Facebook will struggle to compete unless they adapt. The dollar will exist alongside of these tradable assets and may always be exchanged for to pay certain governmental fees. Today, the amount of capital contained in distributed economies could be traded for a total of 247 billion dollars.

It’s also important to point out that this reality isn’t an anti-wealth one, it is one where wealth is exactly aligned with the wellbeing of communities, as voted on by communities. Just like today, an individual’s wealth in a distributed economy is an incentive to support and progress the circumstances that people will want to be a part of. The only difference is how “want to be a part of” is respected.

Now, imagine a world where a North Korean citizen could decide to prefer the United States’ rule of law, and simply exchange for them on-the-spot. Imagine if an American wanted to call Justin Trudeau their president, and truthfully could right away. Imagine a world where a North Carolinian wanted to smoke a joint walking down the road with impunity, and could by subscribing to Holland’s law for an afternoon.

This world is not a foreseeable possibility because the purpose of the government is to manage a physical geography, which cannot be exchanged without traveling or moving. We’ve got to progress the governments we’ve got via civil processes, we can’t simply rely on the pressures of competition and free choice.

We don’t, however, have to progress with the national economies we’ve got. There are much less wasteful options, and they’ll continue to get more efficient. Just like your virtual data, decentralized economies are real and have value.

Imagine governments which did not have economic leverage over their people, and economies that did not have political leverage over their participants. I think under this circumstance we’d be a much less wasteful and much more global civilization.

For some help imagining how a blockchain works, I wrote this follow-up article.

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