5 Ways Crypto Might Impact Society

tl;dr: the arrival of crypto-economic networks using open-source software, supported by blockchain technology will have a number of downstream effects on individuals, organizations, and nation-states. Here are a few that may matter…or not.

There are a few themes that I am starting to just watch with a bit more interest and intensity. I would not go so far as to say that I have a thesis for any or all of them, but just watching.

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The Web 3 Customer

This isn’t the same that this customer type is going to end up with, but it refers to someone who decides that the “it’s free, except for all of my data” trade-off isn’t worth it anymore. They will opt out (or use less) some of the tech tools of today and look for alternatives.

And, I don’t think it’s just “privacy crazy people.”

My wife, the other data, was complaining about a new site that basically scrapes all of your data and then sells you access to “claim it.”

She was upset and said, “I shouldn’t have to do that. I want control of it. It’s not right.”

“Wouldn’t it be great if there were a way for you to have total control of your own personal data?” I asked.

“Yes,” she replied.

I just nodded.

Web 3, the Decentralized Web, as a lifestyle brand.

The Future of Work

For the last few weeks, I have been very involved in the GenesisDAO, the first Decentralized Autonomous Organization built on the DAOstack platform (where I am an advisor).

While not huge nor growing at exponential rates, it has been absolutely fascinating to see how the range of interests for collectively owned organizations has exploded.

There are DAOs that manage a building in Prague, promote the use of psychedelic drugs, grow the economy of Curacao, organize hackathons and others on the way.

But one of the really interesting parts of making DAOs work is how they function as non-hierarchical entities.

People find an opportunity to contribute and then submit a proposal, which is voted on by other members of the community. If it passes, you are on the hook to deliver and be self-accountable.

But you are free to do it as you like.

That’s really just a part of it.

Finding others within an organization who offer complementary skills and interests and passions, all while pursuing multiple initiatives for the benefit of the larger group.

It’s really a fascinating alternative model to how we work today.

If you’d like to dive into this more, see Eric’s series on “My DAO Experiment.”

Crypto-native Businesses

These are coming, in two flavors.

The first, and easiest to comprehend, are going to be similar to the “Blockchain-Based LLC” that we just saw get launched in Vermont.

An existing company will eventually move its back-office operations to the blockchain, replacing 3rd parties like ADP and QuickBooks with Smart Contracts. It won’t happen tomorrow, but it will happen because the cost-saving opportunities for doing so are orders of magnitude worth of improvement in business operations.

The companies that do this will be able to deliver the same or higher quality outputs at lower costs with higher profit margins.

The second type, of course, is the decentralized networks of value running on public blockchains, but we’ve covered that lot. The aforementioned DAOs that enable scalable and resilient decision-making will identify and seize business opportunities faster than their non-crypto-native alternatives.

Very early on the latter, but going to watch it.

Permissionless Combinatorial Innovation

If you want to go deep on this topic, I’d suggest reading Crypto and the Evolution of Open Source and What Comes After Open Source? by Jesse and Denis.

Since crypto-networks are open-source and permissionless, a developer can simply attach his/her code to a pre-existing code base without asking and leverage both the knowledge and user base (if the value proposition exists) to drive faster innovation cycles.

A simple example of this is Ethereum. No one needs to ask Vitalik if he can build on Ethereum. He just starts building, has access to the entire network, and immediately open for business to anyone with an ETH token.

This is not how it works with Facebook or Google. If they don’t want you building on top of them, they can make sure you don’t.

In Web 2.0, the commoditized part of the “stack” was the hardware and bandwidth (see Amazon Web Services).

In Web 3.0, the software is a commodity.

Public/Private Data Partnerships

Whereas the software is commoditized, the data is not. Or at least not all of it.

Some of the data, the “on-chain” part that sits on public blockchains most certainly will be. However, there are plenty of instances where all data should not be open and available.

For example, I don’t want just anyone to know who the members of my synagogue are nor do I want the list of people in Witness Protection open and available.

At the same time, there will be times when private data is better off in the public domain, BUT with privacy/security guarantees as well as compensation for the people who actually did the work of gathering or analyzing the data.

One example of this is how the health insurance company, Cigna, was able to figure out which of its members were most likely to have an opiod relapse.

That algorithm is immensely valuable and should be publicly available. After all, why have every other insurer pay to do the same thing?

It’s a waste.

However, since Cigna did it first, they deserve some compensation…and their members deserve privacy as well.

The encryption on this (zk-snarks eventually?) will be a challenge, but I see three types of data

  • totally public data
  • totally private data
  • privately sourced/generated/analyzed data that is made available to the public (for all different types of price ranges)

Themes Will Emerge

I have no idea if these themes will truly emerge or be important, but I do believe that the arrival of crypto-economic networks is going to change us in ways that we can’t imagine. That seems pretty obvious to me. The question that is a big TBD is how.

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