Crypto: the issue of planetary adoption

In his recent article Why Everyone Missed the Most Mind-Blowing Feature of Cryptocurrency, Daniel Jeffries makes the point that the true power of crypto-currency technologies lies in its ability to disintermediate the issuance and distribution of money i.e. to replace the 400 year old banking cartel that runs the world, and the attendant violence that keeps it in power

He correctly points out that money flows from the top, down through controlled channels that limit the amount of power any individual is allowed to have, and cleverly identifies that whilst crypto(-currencies) have done very well with issuance (the “printing” of money, in his parlance), they’ve done less well with adoption (distribution)

It’s true. Buying bitcoin is and has been, since inception, a path for the persistent and clever, but most importantly, for those fortunate enough to possess the requisite resources

I agree with Daniel that crypto will only bear fruit as a function of world-wide adoption and, as I argued in my article BTC Ad Astra, this adoption is less likely to happen as a function of the transnational value of crypto, than it is from its investment (store of value) quality, simply because from a comparative perspective, the average man can reach the conclusion of his need for participation more readily by viewing the price on a screen, than by observing advantages in the spending efficiency of the currency

At present there is a great deal of thinking devoted to the issue of adoption, including models where money is literally given away. Of course, no one can say for sure what will work and what won’t — there are no guidelines and we are walking in undiscovered country — but in thinking more deeply about how money is distributed we necessarily arrive at the corporate structure

If we’re going to change the world, we have to start with the corporation

Unlike what is widely believed in certain circles, corporations are not evil. They have become evil as a function of the perversion of their mechanisms, but the basic premise of the corporation is still valid and useful: that a man who provides value to the world and captures that value (money), can redeploy it in the service of others (investment), facilitating growth, discovery and the betterment of society (economic activity) — in exchange for a reward (dividends)

As I’ve recounted elsewhere, investors no longer even know what dividends are, and CEOs collect as much of the profit as they can (and particularly in the US, that is quite a lot) at the expense of shareholders, employees and customers. The management of modern corporations consists of manufacturing substandard products, lobbying governments so they can manipulate markets, cooking the books and generally bamboozling the public to keep sales high — all with the single aim of amassing as much value into the hands of the few (management), at the expense of the many (shareholders)

So the modern corporation is a funnel by which the ruling élite controls how much of the value produced by men is actually kept by them, and the rule of thumb is to allow as little as possible of the power to trickle down, even to the point of starvation. In other words, corporations are a tool of enslavement

Unfortunately, changing this behavior, as much as has been tried, is not within the realm of possibility, simply because those structures have amassed sufficient power to retain their status quo

So if corporations are to become part of the solution, perhaps they need to be tricked into doing so. It’s not difficult to imagine how, given that they are completely driven by profit motives

The Ubiquicoin project, for example, is contemplating such a path by mimicking the mechanisms of the vast hawala networks that currently operate throughout the Middle East, North Africa and the Indian sub-continent. These systems are used to transmit money internationally at lower costs than their Western counterparts: SWIFT and the Visa network. By putting these mechanisms on the blockchain and tapping into existing markets, Ubiquicoin could bootstrap operations and create a vast opportunity for the deployment of crypto internationally. Corporations would flock to the coin by virtue of the savings offered, but due to the project’s approach in creating a currency stable with respect to fiat, they could also potentially come to rely on the coin as a reserve currency — reserves are, after all, primarily used as temporary caches in the management of cash-flow. As their dependence on the coin increases for transacting with vendors, it is conceivable that eventually the coin also becomes useful for paying management, and finally, employees

But old habits die hard

So we need to start fresh

The Aragon Network is due to go live by year’s end. The product, currently in alpha, is already very user-friendly and comprehensive in terms of features, the most immediate consequence of its use which will be the creation of (hopefully) a tidal wave of decentralized autonomous organisations (DAOs)

A DAO is, in essence, a corporation, but without the trappings of corruption i.e. without law, litigation, judges, jurisdictions et cetera. It is a corporation whose bylaws are embedded in the heart of a cold, perfectly logical and totally inhuman machine that enforces the proper and just distribution of value

From the perspective of commerce, a DAO can compete head to head with any corporation, but with the great advantage of neither having to answer to tax authorities, nor having to retain lawyers, accountants, HR personnel, or any of the panoply of parasites that currently drain corporate profit. Most importantly, they run without executive management and the attendant “sweetheart deals”, golden parachutes and exorbitant bonuses — thus preventing the funnel effect

In other words, a DAO is the perfect instrument to distribute crypto-currencies i.e. it is through commerce and economic activity (via investment) that we find the path to the planetary adoption of crypto

Like ownership in bitcoin, participation in a DAO is open i.e. anyone on the planet regardless of income level, faith, political inclination or jurisdiction can become a token holder without requiring permission. A child in Jakarta can buy tokens the same as an investment banker in New York because the DAO serves everyone equally

To circle back to Daniel, if the bus driver weren’t chained behind the wheel, he might write that great American novel he always dreamed of. If his income weren’t crippled with overbearing taxation, if he weren’t forced by tyrannical governments to have his investments managed by Wall Street funds happy to take fees but remain otherwise unaccountable to him, if his cost of living weren’t as high as it is owing to the corruption of the system, he might have that chance

And if the coming wave of DAOs has any chance of surviving, that dear bus driver we’ve come to love may have the chance of taking his hard-earned pennies, making an investement and actually benefitting from it, like it was always meant to be

erick calder