Separating Information From State

The crypto industry was born from the idea that society would benefit from having a monetary system separated from state control. And Bitcoin was developed to address that purpose. It's been around for over 10 years now and over time, crypto advocates realized there's value in decentralizing other types of monopolized systems.

So, the crypto industry expanded to explore how decentralization might benefit other areas of society. A new idea formed around separating the flow of information from state control. In other words, maybe society could benefit from removing the control of information from the centralized organizations that grew out of the late industrial and early information age.

The core idea being that information is a form of capital and capital benefits society most when it is allowed to exist in free markets. To that end, the real question being asked by these new forms of crypto: can decentralized technology create a free market for information outside of central control as it has started to do for money?

This is a really important nuance and distinction that's forming within the "crypto industry".

It's a distinction that most crypto industry advocates and naysayers fail to recognize. It's why so many people seem to miss the forest for the trees and talk past one another on the key philosophical evolution of the industry.

The distinction: Bitcoin is an effort to separate money from the state while other "crypto assets" and "web3" are intended to separate information from the state.

Bitcoin is becoming effective in separating money from the state although it has important tradeoffs from fiat monetary systems. While Ethereum and the many other alternative forms of crypto serve different purposes. Many of these new purposes focus on how information is capital and would benefit from systems that separate information flows from centralized control.

The confusion and industry infighting stem from the misunderstanding that information is a form of capital that has a quantifiable value. Because digital information assets have value, they can easily be exchanged. And this process makes these assets behave a lot like money.

Here's the important point though: within the emerging ecosystem of decentralized software, we discovered that there's value in decentralizing the entire digital technology stack.

That's the core idea behind "web3".

As crypto continues to grow and explore decentralization, it will find product market fit for a variety of use cases that have monetary value. And while these use cases may be priced in an easy-to-exchange token or currency other than bitcoin, they are designed to serve other purposes than bitcoin. Not as a means to separate money from state but as a means to separate information from state.

Each tokenized asset may have different features and relative value propositions, but the overarching theme for the most part holds true. Bitcoin: separating money from state, web3: as separating information from state.

There are still missing links in the current iterations of this technology stack. The code is buggy, the industry is in its frontier phase filled with fraud and grift, and the stuff just isn't that useful yet. And if we're honest, there's a ton of people that just don't care if the state has control of money and information. In fact, many people want it that way.

But these inefficiencies and growing pains are early iterations of an effort to create a guaranteed free market alternative for the increasingly important information economy. Over time, the technology will get better, and the value proposition will become more clearly defined. As that happens, adoption will increase.

Here's the overarching point of this short essay: if you're only looking at crypto, Web3, or whatever you want to call the industry as just as some form of digital money, digital gold, as equity in tech startups, and/or as shitcoins, you're likely missing the point.

It's about global free market capitalism in the digital age. It's about siphoning power and influence from centralized institutions and traditional power structures and returning it to free markets. And it's about creating more pathways and options for individuals to achieve a little more self-sovereignty in their lives. There are clear tradeoffs in creating value structures that support self-sovereignty vs centralization. And these systems frequently come with fraud and lack of safety nets.

But only by looking at the industry with the right perspective on what it's trying to achieve can you properly understand the tradeoffs and make the correct choices in choosing whether or not you'd like to participate.

At the end of the day, it's about separations of power, creating digital checks and balances, and having an alternative to hedge against authoritarianism.

Rapid Fire

• China is rapidly rolling out its new digital currency | The Economist (archive.is) - What happens when the dollar becomes less essential to global trade? "The usefulness of the digital yuan in international markets is a hotly debated topic. Some experts have pointed out that, in theory, the e-cny could be used to dodge the dollar system altogether. This is because its technology does not need swift."

• WSJ Webview - Public Transit Goes Off the Rails With Fewer Riders, Dwindling Cash, Rising Crime (onservo.com) - Prediction - Cities will rapidly adjust tax codes to adapt to what works under life with hybrid/remote work. "In cities such as Dallas and Cincinnati, where public-transit budgets are mostly funded through sales tax revenue and more people commute by car, user declines haven’t hit as hard."

• Fear in the Job Market Is Rising. Is It Time to Go to Grad School? - WSJ - Usually when big layoffs happen in the white collar industry people go back to school. It's hard to imagine that trend holds to the same degree given the direction the world is heading and the opportunities presented by part time and global remote work.

• Gold buyers binge on biggest volumes for 55 years | Financial Times (archive.is) - The market for neutral, state agnostic money is growing. Are you watching and preparing for this trend? "Central banks are scooping up gold at the fastest pace since 1967, with analysts pinning China and Russia as big buyers in an indication that some nations are keen to diversify their reserves away from the dollar."

• Delta introduces fast, free onboard Wi-Fi | Delta News Hub - This is a trend that makes the world just a little bit smaller and more well connected. It's the decade of the digital nomad.

• There's An AI For That | AI Database (theresanaiforthat.com) - Interesting list of how AI is being used these days.

Extras

Highest signal to noise pseudonymous Twitter accounts.