Why We Need 'Crypto for Real'

* Title: Why We Need ‘Crypto for Real’: A proposal to link up the open ecosystems for crypto coordination, with the real-life mutualization of provisioning systems undertaken by rapidly growing urban commons. Michel Bauwens, Nov 6, 2023

URL = https://4thgenerationcivilization.substack.com/p/why-we-need-crypto-for-real

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Michel Bauwens:

Is there a way to link up these two growing movements, one concerned with equitable local access to urban (bioregional) provisioning systems; the other with coordinating universal flows of value through crypto-economic coordination systems ?

There are many ways to interpret, and eventually critique, the crypto movement that has emerged since the publication of the Bitcoin White Paper on the P2P Foundation’s Ning forum in 2009.

To remind readers of my own interpretation ‘back in the day’: Bitcoin was the first socially sovereign currency with the ability to scale trans-locally, and to become the vehicle for new value streams that are not tied to a particular locality. Not that this was impossible before, witness neoliberal globalization in the first phase of digitization in the 80s and 90s, but it democratized the capacity, in the same way that the internet had democratized access to digital networks. However, it is important to remember that Bitcoin and the subsequent generations of cryptocurrencies and tokens, nearly all designed as commodity currencies, do not create value, they only reflect it, including the speculative expectations of those that invest in it. Nevertheless, Bitcoin and its derivatives have become an indispensable vehicle to store and exchange new types of value, out of sight (significantly at least) of the nation-states.

Ethereum was the next step, creating a world computer and standard for all kinds of services that can use the Bitcoin-created blockchain ledger, and many derivative and alternative ledgers since (some of us are hoping for the ultimate p2p network technology of Holochain). If you look at civilization as a mostly physical and geographical response to environmental challenges, as Arnold Toynbee had suggested in his Study of History, then this ‘trans-localization’ of economic and managerial flows is of course a hugely significant pivot by itself.

Five thousand years ago, humanity shifted from kin-ship based, tribal, modes of value exchange based on the gift economy and the commons, to markets and states; today, the new pivot is pointing to straight mutual coordination based on digital commons, coupled with sustainability protections, i.e. a return to distributed forms of coordination, using digital technology to achieve this.

A second way of reading crypto is to read it as an expression of the desires and social power of a new class. Five thousand years ago, the pivot to state and market forms (aka ‘civilization’) was driven by the writing elite; today, the shift to distributed networks is driven by the emerging coding elite. The writing elite clearly created a more hierarchically coordinated class society based on state or market-based oligarchies, while it seems the crypto ideology is driven by a desire for the creation of truly distributed infrastructures, even if most the reality is still very oligarchic in terms of ownership.

It is by no means certain what the form will be for the new coordination regime.

First of all, there is a huge temptation for exodus-based strategies. Typical for civilizational transitions is the following dynamic:

The old system and its institutions disintegrates

An exodus takes place by first pioneers and then many others who are escaping the dysfunctionalities of the old regime, as they engage in experimental seed forms that exhibit the emerging new systemic logics

After a period of chaotic transition, a new relatively stable institutional system emerges which integrates a significant part of the societal innovations invented during the transition period.

Thus, to take western history as an example, the slave-holders and slaves of the declining Western Roman empire, became the feudal landlords and serfs of the feudal regime, eventually transforming into the forces of capital and labor under the political economy of industrial capitalism. Today,in the current transition, the forces of cloud capital and precarious cognitive and service labor are emerging as the new class realities under the transitional techno-feudal regime. As Yanis Varoufakis argued, under techno-feudalism, even capitalist profit is subsumed to the rent extracted by the cloud capitalists. We personally do not believe the latter regime is final or stable at this stage, and different transition scenarios are still at play.

In our opinion, there are four world systems battling it out apart from cloud capital (which I called Netarchical Capitalism in my own writings): these are

• the distributed capitalism of libertarian crypto,

• the global to local open source communities, and

• the local to global mutualizing urban provisioning communities.

The open source communities are organized globally through digital means, but can work locally in multiple spaces, while the latter are concretely securing provision for vital needs, outside the weakening market-state nexus, in order to live better at the local level, but at the same using digital technology to establish global knowledge commons, ‘protocol cooperatives’, which support and coordinate local hubs.

New sociologists such as David Goodhart, Matthew Goodwin and Erik Kauffmann, have based their analysis ( as does Thomas Piketty on the progressive side), have stressed the contemporary culturally driven class divide between the Somewheres and the Nowheres. The Nowheres are those populations in the core countries, with less digital skills and access, who are bound to their territories still, and suffered from neoliberal globalization and de-industrialization. In alliance with the more nation- and territory bound fractions of capital owners (against the so-called ‘globalists’), they are turning to right-wing populism and reviving the nostalgia for a stronger and solidary nation-state, that would protect local populations. The elite struggle today is between those that ‘want to sacrifice the Nation(s) to the Empire, and those that want to sacrifice the Empire for the sake of the Nation’.

However, a substantial number of the Nowhere’s, those with digital skills that can be used in a global nomadic economy of knowledge work, are tempted by an exodus strategy. My thesis is of course that a lot of the prevailing libertarianism in the crypto economy reflects that yearning, i.e. to escape the present downward phase of human civilization, through physical arbitrage, moving around the world, with digital tokens at their disposal, to find the best places to live in the ongoing destructuration, while they are structuring an alternative digital economy functioning at the global level. This effort shows little concern and solidarity with the locally rooted populations. The implicit belief is that money will permanently insure access to the essentials, independently of the physical location.

The achievements of the crypto community have otherwise been quite formidable.

• First of all, they start from globally coordination and open ecosystems with public accounting ledgers, organizing value flows from the get go at non-local levels;

• second, they are based on open source technology and strong community dynamics;

• thirdly they have organized relatively strong funding mechanisms to fund their own commons goods (which they call public goods for some reason).

• Finally they have moved to explicitly democratic and anti-oligarchic decision mechanisms, which balance the one dollar one vote economy, with contributory forms of decision-making, using ‘quadratic voting’ and similar innovations.

The old accounting mechanisms were designed for competing and isolated commercial entities that could only see their own profit and loss, but the new open ecosystems can show contributions and impact in the whole network, and how it interacts with the external world. On the negative side of this interpretative ledger, I would argue that still today, after broadly 15 years of development, the whole infrastructure is still largely dealing with managing their own code, and their own value streams.

If we look at the successful urban provisioning systems, which had grown tenfold from 2008 to 2016 and have continued to grow rapidly after Covid, we will see a great fragmentation of digital efforts, with a near total acceptance of crypto technology. Even the Open Food Network, available and used in more than a dozen countries, does not use crypto for their coordination efforts. But there are some crypto efforts, such as the Regen Network of Gregory Landua, that point is a direction of direct linkage with local production efforts.

So this is the call we are making in this editorial: Crypto needs to move from simply moving around code and its own value flows, to an active engagement with local production, under the cosmo-local model, which combines relocalized production with ‘cosmic’, i.e. universal cooperation, under the famous adage ‘what is heavy is local, what is light is global and shared’.

This also requires a psychological re-orientation. Historically, writing and now coding elites have been dependent on state and oligarchic funding. But then, starting in the 19th cy, the labor movement, based on dues-paying members, acquired the means to start funding its own ‘organic’ intellectuals, and for a substantial amount of time, there was a real alliance between intellectual middle classes and working people, to construct a more balanced society. That link has now largely been broken, and the split between Somewheres and Nowheres reflects that.

So to make this new linkage between crypto and the world of sustainable provisioning real, one must redefine the role of the Nowheres. Not as the rootless cosmopolitans seeking escape, and letting the world rot, but as rootful Everywheres, i.e. a cognitive and coding class at the service of the productive citizens of the world, those that contribute to the feeding and the clothing and all the services that we require for a happy human life.

This is by no means a won battle yet. I attended Zuzalu Montenegro, a open and pluralistic meeting of the Ethereum community, open to the world, which combined libertarians and commoners in joint debates; The second Zuzalu, in Istanbul, following a ‘zero knowledge proof’ philosophy of anonymity and operating in a manner closed to the outside, expressed a clear formal desire against sharing the internal dynamics, and, while it paid attention to the internal mutualism of public goods production, did not exhibit much pointers to ‘Crypto for Real’, at least not in my experience.

So what is ‘Crypto for Real’ ? It is the name I would like to give to any orientation and series of initiatives that link crypto-economic coordination mechanisms, not just to the flow of code and financial value, but to actual physical production efforts. I want to see a convergence between local provisioning movements and their desire for global interconnection, with the existing mutual coordination infrastructure that is emerging in the crypto world. They are a natural fit for each other, they need each other. There is no realistic exodus from a world of pain and poverty and ecological breakdown. Therefore, there is the need for a convergence between the local productive and regenerative capacities, with a crypto infrastructure that more easily allows for universal coordination of cognitive efforts.