NYU Stern Working Sessions on Cryptoeconomics 2018

From P2P Foundation
Jump to navigation Jump to search

Description

Akseli Vitanen:

"The Working Sessions on Cryptoeconomics at NYU/STERN invite you to a deep inquiry into the reasons for building the token economy. It is not just another tech sector. It is a possibility to do economy differently.

...

"We are working on resetting the cryptoeconomics agenda. I will publish a couple of texts here about it too. We will have a pretty good crew at work, world class political economists, economic anthropologists, finance theorists, including professors Dick Bryan (the author of Risking Together and Capitalism with Derivatives), Benjamin Lee (Derivatives and the Wealth of Societies), Jonathan Beller (Computational Capitalism) and Robert Wosnitzer (cultures of finance specialist) - all now really deep into crypto economy and, especially, into finding out and prototyping what a token can do." (https://medium.com/econaut/cryptoeconomics-working-sessions-at-nyu-stern-24a60d99d243)


Discussion

What is the reason for building the Token Economy?

Akseli Virtanen:

"The idea that innovations in funding break open existing knowledge is not new. Myron Scholes, the co-founder of the Black Scholes options pricing formula, contends in his Nobel prize speech that debt and equity are historically specific modes of existence that enable least-cost means of funding activities and that, with time, new categories of funding would arise (along with new attributes).

The rise of joint stock company and stock markets in 1840s transformed capitalism. By then capitalist enterprise had reached a stage of growth that required large scale investment beyond the capacity of rich owners (private companies/partnerships). The revolution started in Britain, where the two-century-old legislation that had banned joint stock companies as purely speculative, disruptive ventures was repealed. With the change of law large quantities of investment capital could now be mobilised and ownership could be sold in small parcels, and those parcels traded in a secondary market — the stock exchange. This changed capitalism from being about the discretion of a rich elite into a calculative logic, with industry run by professional managers and where shareholders’ desire for financial returns impose a direct discipline on management strategy. This development was associated with the replacement in business of gold by paper money (credit) and, with investment in technology, came incorporation of labour into the logic of capital, in the creation of what Marx called ‘relative surplus value’. A whole new “mode of production” was born.

Cryptographically enabled distributed economic-organizational systems, aka “tokens”, are currently changing again the conventions of economic organization.

How is value created, captured, distributed and exchanged, what is money, how people incorporate into production, are changing as radically as the first generation internet changed the way we communicate and relate to the presence of others.

What are tokens? What is issued at an ICO, what becomes owned? Are tokens equity? Central bank money? Private bank debt? Or something else? Are they a gift, a bid, a gamble? If Scholes is right that financial instruments are historically specific, then are the categories of money and asset simply limited in their ability to give us paradigms through which to think about tokens? Perhaps tokens are more like derivatives (purchases of risk exposure, not just asset ownership), designable so that people risk together, not individually. Perhaps the issuance of tokens is best understood as crowdfunding, or investment banking, or building a collective. What are tokens? Why are they important? What can they do?

What, after all, is the reason for building the token economy? Finance is moving beyond a discretely delineated category of money as an ‘independent’ measure of the ‘real’ economy. With financial innovation, many assets acquire the liquidity of ‘money’, and as a consequence the distinction between money and other assets is breaking down. The sociality of money starts to reveal itself: fiat currency codifies a certain system of accounting, ownership and distribution. Money is a social relation, not only a technical mechanism. Cryptotokens are about exploring and re-engineering that sociality, building alternatives in service of a different economy. The question of how to do economy differently takes on new weight when it becomes possible to create answers; that is the fundamental value of token economy. Opening economy as a design question." (https://medium.com/econaut/cryptoeconomics-working-sessions-at-nyu-stern-24a60d99d243)