Web3, Ethereum, and a More Perfect World — Why everything you know will change
I have a tradition of writing one medium post a year. I’ve wanted to write something for a while. But there’s been too many ideas, too much noise to filter out.
This month makes it an entire year since I first learned about blockchains and I think I finally understand enough to bring meaning to page.
I’ll try to summarise everything I’ve learned so far in the hope that others will not only see my view but understand why it is necessary to participate and help build out this new phase of the internet.
Web3 is about guarantees
We’ve heard Web3 described as the value layer of the internet (if you haven’t you can now). While I agree with this I don't think it does justice to this new phase of the internet.
There has always been value on the internet, just as there has been off the internet.
Your Instagram followers are valuable to you. Your Youtube recommendations based on your history are valuable to you. So are the assets you own in a game. The internet has always had ways to create, store and even transfer value otherwise the big internet platforms today wouldn’t exist.
What Web3 brings to the internet isn’t value. It brings a guarantee around that value.
Defi is a guarantee that no one can take your money away from you. No state or entity or even the creators of the technology.
NFTs extend this guarantee to every digital asset.
DAOs are a combination of both. That your assets guarantee you certain voting rights along with others who share similar assets and views.
In Web3 a guarantee is encoded into the technology. They aren’t upheld by vague policies that can change anytime Facebook has an internal review.
Even though a lot of people in Web3 like to define it as trustless. I’d argue that Web3 is fundamentally about trust.
That people can trust a guarantee made on a blockchain. In the same way, you can trust that one unit + another unit makes two units. Logical guarantees. The human feeling of trust is there beyond semantics.
And with these new levels of trust new things become possible.
“As a broad generalisation, the more people trust each other in a society, the more prosperous that society is, and trust growth seems to precede income growth.” — The Rational Optimist
The trust that Blockchains enable will spur a change in human society that will be unprecedented.
Realize the scale of the change
It took me a while to realize, to comprehend fully the significance of what blockchains make possible.
That until 2009 with Satoshi and Bitcoin, never before has it been possible for precise human coordination to exist outside of centralized entities.
Delegating trust to centralized entities has been the only way humanity could organize. Every war needs a general, a province a ruler, a nation a king.
21st-century government is a relic of 16th-century technology. When group consensus was hard to reach at scale. Because information could only travel at the speed of the fastest horse. Hence most decision-making had to be centralized to a single point (king, president, congress).
We’ve had no other option but to delegate trust to effectively make decisions as society grew.
Ideally, decision-making would be kept as close to the individual as possible. Not separated by layers of bureaucracy.
Blockchains allow power to be decentralized and yet allow consensus to be reached easily.
In Defi, we saw the power of group coordination as the explosion of capital.
With the rigid trust guarantees that smart contracts on Ethereum offered, Defi protocols were able to raise hundreds of millions of dollars practically overnight. Impossible in traditional finance.
Defi is only the start, just as traditional financial institutions will be made obsolete by Defi. We’ll see this same disruption in Governance.
Current existing governance structures will be cleared away by new decentralized forms of government.
“You never change things by fighting the existing reality.
To change something, build a new model that makes the existing model obsolete.”― Buckminster Fuller
Blockchains make all existing guarantee structures, whether they be strictly financial or governance based— obsolete.
A disruption in human coordination
All around the world governments are failing and day by day people have less trust in traditional institutions.
As a prime example, let’s take Nigeria, the only place I’ve lived in my entire life. Nigeria as a country gained independence from Britain in the 1960s, this was followed by coups and wars where different factions vied for control.
The pessimism for the government runs deep in Nigeria as in many African countries. Nationalism is mostly dead and everyone believes that the leaders (simple politicians really) are corrupt and that we’d be better of without them.
My entire life I’ve heard this sentiment echoed by everyone I know. And it’s easy to see why considering Nigeria’s GDP puts it as a mid-range wealthy country.
Yet wealth is so poorly distributed that most people live on less than a dollar a day. As a Nigerian, you provide for your own healthcare, insurance, water, electricity, security, and even local infrastructure like roads with the government too busy sharing a shrinking pie to do much work. All on top of the insult of a devaluing currency and while being completely ignored by those elected to govern.
Evidence of this distrust of government is clear; Nigeria is one of the top Bitcoin transaction locations in the world.
And even though the government has tried to restrict cryptocurrencies by banning banks from dealing with any crypto-related business, essentially banning all centralized exchanges. This has led to a boom for P2P exchanges and only serves as a barrier for entry for less fortunate Nigerians to get a share of the Crypto upside.
The negative sentiment grows. Last year there was a nationwide protest against police brutality and ultimately government corruption. Nigerians protesting for a better life were beaten and shot on the streets by the same people who were supposed to safeguard their welfare.
The protest could only happen because of its decentralized and rapid nature. Most of the coordination took place on Twitter (which the Nigerian government has now banned).
Eventually, the bank accounts where people made donations to support protestors were blocked for supporting “terrorist activities”.
And as proof that the future will not be business as usual. Protesters switched to Bitcoin funding; well outside the reach of any government entity.
Today marks the anniversary of that protest. A day where Nigerians demanded something better and were instead treated like terrorists while the world watched.
A year later and no Nigerian official has been held accountable. None of the leading world governments have done anything other than condemn the attack from afar. Nothing has changed to disturb the sharing of the ever-shrinking Nigerian pie.
Or that’s what it looks like from the outside.
I argue that a lot has changed. That last year a lot of people realized not just that their government was capable of intense violence to maintain power. They also realized their power and specifically the power technology gives them over those who would want to control them.
Nigerians learned how to use social tools to coordinate, VPNs to escape restrictions, cryptocurrencies to fund unstoppable movements.
My bet is that we’ll see this pattern play out in more countries. Even the most restrictive of governments cannot escape what will come.
Take China for example. The archetype of an all-watching state. Yet even within its boundaries, even with banning Bitcoin year after year, they’re unable to prevent its spread even within their own agencies.
And it’s more than people mining crypto; every year there’s a web3 foundation grant given to developers building decentralized technologies.
Here’s a geographic breakdown of where those funds went to in 2021 — see who’s leading?:
This year Bankless, made a report on the state of DAOs, and here’s a geographic breakdown of their respondents:
It’s not a coincidence that we find China at the forefront of decentralized tech. I think that precisely because China is such a restrictive government its citizens understand the value of decentralization.
It becomes ideological quicksand in that the harder these centralized bullies fight decentralized tech; with bans, threats, and straight-up violence the more quickly people will realize their importance.
So what’s the end result? Where does this all lead? I’ve been to the cultural mountain top and have caught a glimpse of what’s coming:
Decentralized cities
We already have rich thriving communities on-chain. Uniswap, a protocol on Ethereum has a $4 billion dollar treasury. What’s to stop them from buying an island the size of Vatican City? And there are DAOs that already exist specifically for the goal of making decentralized cities a reality.
Global coordination
Humanity is a coordinating species. It’s how we’ve come to rule the earth and send robots (soon people) to mars. But until recently the size we could coordinate at has been restricted. The internet broke down geographic/information silos and now Web3 has broken down money silos.
Coordination can now happen at an unprecedented scale. Galaxy Brain Vitalik Buterin already envisions a world where public goods (expensive projects that are universally beneficial) are funded by online communities.
Want to stop deforestation of the Amazon? The rest of the world can pay Brazil a preservation fee greater than the gains minus costs of burning down more of the rainforest.
How much is human life extension worth to us as a species? A billion dollars annually? Great! 100 million people could donate $100 and hand that out to life extension researchers.
The possibilities are limited only by our collective imagination.
Wealth Distribution
Even though the concept of 1st, 2nd, and 3rd world countries originated from WW2. I find they still accurately describe the state of our reality.
Living in a third-world country and seeing how people live in other places. It really does seem like we’re on different worlds. As plain as night and day.
For so long, the place you were born instantly dictated the quality of your education, how much money you could make, what cultural systems you would fall under. Your life was a result of your location.
The internet changed this but still, it was limited by money silos. Web3 changes this; money can now move as easily through borders as information. Because it has always been information. The result is rapid global redistribution of wealth.
The Sovereign Individual
Recently I was recommended a book by Nick Almond, founder of finance.vote which is the DAO I’m a part of. The book “The Sovereign Individual” by James Dale Davidson seems almost prescient considering that it was written pre-Bitcoin (published 1997) and predicted how cryptographic technology would lead to new economic systems and eventually a different world.
I think the author was able to get so many things right because self-control has always been a human desire, freedom from institutions a need and you can extrapolate from there.
Whenever humans need something and that need does not defy the laws of physics it will eventually happen given enough time.
To quote David Deutsch:
“That is to say, every putative physical transformation, to be performed in a given time with given resources or under any other conditions, is either — impossible because it is forbidden by the laws of nature; or — achievable, given the right knowledge.”
If humans want something to happen and physics does not forbid it, eventually, it’ll happen.
The Sovereign Individual talks about how society will change as individuals become more powerful thanks to technology. A single person (or group) can create Bitcoin or Ethereum and change how the world works. This trend will accelerate.
A more perfect world
I don’t think perfection is something you can arrive at, neither is it something you’d desire. To accept perfection is to close the imagination to something better. Rather we can have increasing perfection. I think blockchains and the change they’ll enable will lead to a more perfect world.
A more perfect world would be one where you’d be okay being shuffled randomly anywhere on the planet at birth and still do well. This is the ideal to work towards.
Where people aren’t under the tyranny of a state or ideology. Where people have the freedom to improve their lives regardless of the circumstances surrounding where they’re born. A less violent and oppressive world.
Web3 and the coordination it allows will let us transcend into a new phase of humanity; a globally united species.
The real battle has always been against nature. The finite Vs the Infinite. Life Vs Death. Knowledge and Empathy are our tools against this vastness.
WGMI everyone! 🚀
Books/Resources that informed my thinking:
- Finance.vote: The best way to learn about DAOs is to join one
- A Bankless Nation
- The Beginning of Infinity
- Sapiens
- The Rational Optimist
- The Sovereign Individual
