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Despite expected, with cases related to social movements concluding one after another, tensions are unavoidable. Yet, the more society crumbles, the more I persist in my daily work. I firmly believe that civic technology is a way forward. This article, originally titled ‘From Zero-Sum to Republic’, gives a short summary for The Sociology of Blockchain: Reimagining Money, Media, and Democracy. It discusses the significance of blockchain-related technologies in today's world and my views on how individuals can navigate their circumstances. The article is somewhat long, so if you can't finish it in one go, feel free to come back to it later. If you do finish, leave a comment— even just an emoji will do.
In 1997, when Hong Kong's sovereignty was handed over, I graduated from university. A year after working, I started a company with a few friends from the student union, despite having no clue about entrepreneurship. We named it "The New Sky” after our student union cabinet. Despite the multiple ups and downs and many untold stories, I knew I could never go back to being an employee.
It's not that I got used to the freedom of managing my own time or not having to answer to anyone — after all, any entrepreneur knows how "free" entrepreneurship truly is and how much you still have to consider others. The reason I couldn't go back was that during those years of entrepreneurship, I gradually realized that I wanted to create value for the world, not just make a living for myself.
Back then, the term "startup" wasn't even a thing. Those who had a bit of scale would say they were "doing business", while someone like me, with a tiny operation, would just say we were "working on things". It’s only in the past decade or so that Hong Kong began following in Silicon Valley’s footsteps and talking about startups. However, the nature of startups in the two regions is quite different. In Silicon Valley, startups could be in any industry or focus area, but they were always product-centric. In contrast, Hong Kong startups often, either by choice or necessity, end up providing tailored development for businesses and institutions — a form of consultancy in American terms.
Consultancies are challenging to scale, which is why venture capitalists rarely invest in them. But that's not why I've always insisted on product development. I don't believe that bigger is necessarily better, or that more money is always good. Helping various industries enhance productivity and improve workflows is also very meaningful. What I value most is the essence of a startup — creating something from nothing.
I'm aware that “creating something from nothing” (in Chinese “無有生有) almost has the negative connotation as “making something up”. But if you think about it, this negativity stems from a deeply ingrained zero-sum mindset. In my opinion, the zero-sum mentality is particularly strong in Hong Kong. Perhaps this is related to its history as an entrepôt in the 18th century, a hub of light industry and trade in the 19th century, and a center for logistics and finance in the 20th century.
Zero-sum — where the sum of gains and losses is zero — implies that if one party wins, another must lose. At a mahjong table with four players, if Alice, Bob and Carol collectively win $1,000, then Dave inevitably loses $1,000. In trading markets, if Eve sells a stock worth $100 million, there must be a Frank who spends $100 million to buy it. Whether it's entrepôt trade, logistics or finance, the model always involves a buyer and a seller — what one party pays, the other receives, with a middleman taking a cut. This concept is so deeply embedded in the minds of Hong Kong people that when someone seemingly creates something out of nothing, it's either seen as magic or as a scam.
From a scientific perspective, the zero-sum principle is a law of nature — the total amount of matter in the universe remains constant. Humans can change the form and combination of matter but cannot create matter from thin air. One of my favorite Japanese anime series, Fullmetal Alchemist, elevates this concept to a philosophical level with the idea of "equivalent exchange". It posits that "humankind cannot gain anything without first giving something in return. To obtain, something of equal value must be lost."
As a devoted fan of Fullmetal Alchemist, I believe that "equivalent exchange" is not wrong; what’s wrong is our interpretation of it. Not just us — the protagonists, Edward and Alphonse Elric, also got it wrong from the very beginning. They believed they could use alchemy to bring their deceased mother back to life through an equivalent exchange. The result? Edward lost his right arm and left leg, and Alphonse lost his entire body, barely preserving his soul. Yet, they could not bring their mother back. Through their experiences, the brothers come to realize that a soul cannot be transmuted into physical form, nor can love. Love is not given to receive an equivalent love in return. On the contrary, love does not diminish when it is given; instead, it deepens through interaction and taming. It’s like a torch of fire — kept to oneself, it burns out quickly, but passed on, it only burns brighter.
Does this defy the laws of physics? Not necessarily. Einstein taught us that E = mc^2 (mass-energy equivalence), meaning matter can release energy, and a tiny amount of matter can release a massive amount of energy. If we find the right method, we can generate energy and create value in a way that feels like "creating something from nothing," without the apparent loss of matter.
The digital world operates in much the same way. A concept or a piece of content, when kept to oneself, remains limited in meaning. But when this creation is digitally replicated at a negligible cost and shared with others, where it can be read, responded to, and reinterpreted, its significance grows exponentially, creating value. However, digitalization has only been around for a few decades — a mere blip in the long course of history. Humanity still hasn't fully grasped how to measure or capture the value created in this way. Much like how Alphonse's soul was bound to his armor to interact with the world, we still anchor value to physical mediums in order to define, experience and exchange it. This holds true for physical books, art, and even money.
Over the past few years, I've frequently introduced blockchain and cryptocurrencies to people and have keenly observed this cognitive blind spot. One common question is, "Where exactly is my money?" The mental image seems to revolve around stacks of bills in hand, stashed in a wallet, stored in a bank, or converted into gold bars. But once the physical form is removed, the mind struggles to understand it. Another frequent question is, "Where does this money come from?" The underlying assumption is that if money appears here, it must have vanished from somewhere else. The reality is that value has never had a physical form — humans invented physical money as a medium to define, store and exchange value. And since value isn't a tangible substance, it doesn't have to be zero-sum; it can be created. Blockchain and cryptocurrencies use digital tokens, which are also intangible, as a medium for value. Without the constraints of physical form, they can be transferred without boundaries, with the foundation for minting tokens being value itself.
Creating something from nothing isn’t a concept exclusive to the tech industry, nor is it the domain of magicians and scammers. In fact, before the rise of trade and finance, generating value from nothing was the norm. When a farmer sows seeds and, with the help of sunlight and rain, grows vegetables, the world doesn’t lose anything in the process. Scientifically speaking, the sum of all matter in the universe always balances out to zero, but this holds only if we consider the entire universe in the equation. If a farmer does not plant crops, the sunlight and rain would be wasted. Planting utilizes resources effectively to create value.
The zero-sum mindset is a stumbling block for personal development and human progress. Within this mindset, governments focus on city or national competitiveness; schools emphasize various rankings; and parents want their children to "win at the starting line". But even if someone becomes the "winner" within this framework, they ultimately haven't created any value for the world — they might have won against others but lost to themselves. Instead of focusing on how to take more from others, why not explore undeveloped fields and make use of wasted resources to create value? Even if the value created is small, it still makes the world a little better. This is the path from zero-sum to positive-sum.
Even if the above concepts are clarified, many still find it hard to accept the idea of non-state groups defining value and minting currency. But consider this: humanity has always progressed step by step, even without the internet, communication technologies, or even printing presses. If ancient people could do it, why not in the 21st century with advanced information technology and blockchain as a "trust machine"? Yet, those entrenched in the current system will always come up with more reasons, worried that this would undermine governments and fiat currencies. This, once again, is the zero-sum mindset at play.
Community tokens do not have to develop at the expense of fiat currency. Fiat currency is based on nation-states, and no matter how strong a country’s nationalism might be, it ultimately reflects value on the physical level — such as food, clothing, shelter and daily living. Community tokens, however, exist in a different dimension altogether. They measure the value an individual creates within a community, minting and distributing tokens to reflect needs that fall on the upper half of Maslow's hierarchy of needs — values that fiat currencies do not encompass. In this era of ultra-advanced communication, individuals don't just live in their nation-states; many also exist within cross-border communities based on shared hobbies, ideals, goals or orientations. Examples include creative sharing communities, environmental groups, LGBTQ+ rights movements and content enthusiasts.
Take content creation as an example: no fiat currency operates like the LikeCoin, which bases its token minting and distribution on the quality of content. This has led to the familiar and seemingly inevitable situation where writing, art and creativity often don't pay the bills — even a genius like Van Gogh lived in poverty for much of his life. Now, technology provides society an opportunity to issue cross-border community tokens via blockchain, capturing values associated with higher-level needs like self-actualization. This not only does not weaken the function of fiat currencies or nation-states but can complement them, achieving a positive-sum game.
Even from a perspective of national competition, governments should allow room for the development of blockchain and cryptocurrencies. Business activities are hard to contain— if one country isn't welcoming, there are always others that will be. Take the popular blockchain wallet app imToken, which relocated from Hangzhou to Singapore, or the widely used crypto Visa card, Crypto.com, which, despite being based in Hong Kong — a global financial center — issues cards in Singapore dollars. These examples show that when governments view blockchain as a serious threat, they simply drive companies and tax revenues away. Ironically, local users continue to access these services regardless.
In the modern nation-state system, countries have drawn their borders, claiming resources within them, governing events and collecting taxes — all according to the logic of the physical world. However, with the advent of easy transportation, advanced communication technologies and increased cross-border interactions, even before blockchain's arrival, defining the jurisdiction of events and income has become increasingly challenging. Large corporations, with their abundant resources, use various methods to legally avoid taxes: incorporating offshore, signing contracts offshore and executing projects offshore — all to pay taxes in the country with the lowest rates.
On a personal level, digital nomads and slashers were already becoming a trend, and the COVID-19 pandemic accelerated the adoption of remote work by at least a decade. While companies like Automattic were already embracing this model, even giants like Twitter and Facebook have since adopted indefinite remote work policies. Initially, this meant existing teams working from home, but it also opened the door to unrestricted global hiring, beyond the constraints of visas. Anyone can now become a digital nomad. All these factors indicate that clinging to outdated ideas to suppress blockchain development or imposing heavy taxes on business activities within national borders will only push these tax revenues toward low-tax countries willing to coexist and thrive with blockchain and cryptocurrencies. The more advanced technology becomes, the more this truth is realized.
Blockchain and community tokens do not encroach on the territory of nation-states and fiat currencies; instead, they can create a positive impact.
During the British colonial era, Hong Kong's government operated as a "small government," adhering to the principle of laissez-faire. Today, the government wants to control everything — from how citizens eat, gather, sing, and even think — yet it never mentions laissez-faire, except when it comes to budget cuts. Governance has always been challenging, legitimacy has always been questionable, and trying to micromanage every aspect of life only exacerbates public discontent.
Startups thrive on focus. Every tech giant remains laser-focused on its core business. Amazon sold books for years, establishing its dominance before expanding into new areas, but always revolving around e-commerce. The same goes for social media giant Facebook and search giant Google. Even as they have become behemoths, they remain focused. Governments should be the same — focused on citizens' core needs, intervening where necessary and stepping back where not, to achieve good governance.
The COVID-19 pandemic has clearly shown the world that healthcare and poverty alleviation are fundamental functions that governments must manage, and controlling borders is the government’s responsibility when necessary. However, the pandemic has also demonstrated that remote work and online learning are viable options. This simple truth is something internet natives have always known, but it took a crisis for everyone to catch up. Now, even those who were not accustomed to the online world have made a great leap forward — work, learning, entertainment, and socializing can all find new spaces online. It may feel awkward at times, but in many ways, the experience surpasses that of the physical world.
As more value is generated in the digital space and the proportion of online life grows, political demands related to the digital world are becoming stronger. For example, changes to Facebook's policies often provoke more reactions than government laws. In a society like Hong Kong, where the basic physical infrastructure is already highly developed, the government's continuous push for more "bridges and roads" yields diminishing returns. Instead, improving digital infrastructure and reducing unnecessary regulations can provide unlimited room for societal value creation and serve as a release valve for public political demands.
The internet allows for the cross-border flow of information, blockchain enables cross-border transactions of assets and decentralized autonomous organizations (DAOs) facilitate cross-border governance of communities. In the past, referring to online communities as "virtual nations" was a weak analogy. However, as blockchain increasingly digitizes assets and even constitutions, the concept of "code is law" begins to resemble a true republic. Jean-Jacques Rousseau's 18th-century social contract is being gradually rewritten in the 21st century as a "social smart contract." Nation-states neither can nor need to be replaced, but they can focus more on governing the physical aspects of life, leaving room for “blockchain republics” to fill the gaps, create new value, and absorb public demands, acting as pioneers in social development.
Since the mid-20th century, philosophers like Heidegger and others have debated the "end of history" thesis, suggesting that the world has discovered its optimal mode of existence. The most recent contribution to this discussion came from Francis Fukuyama, who expanded upon his 1989 essay The End of History? with his 1992 book, The End of History and the Last Man. Following the end of the decades-long Cold War and the collapse of the Soviet Union, Fukuyama argued that the liberal democratic system of Western countries represented the final form of human society. However, the following decades saw the rise of China under authoritarian rule, the 2008 financial crisis in the United States that highlighted the global dangers of monetary excess, the election of Donald Trump— a figure starkly at odds with traditional American values— in 2016, and Brexit. The "end of history" thesis has proven fragile, prompting Fukuyama himself to state, "Twenty-five years ago, I didn't have a sense or a theory about how democracies can go backward. And I think they clearly can."
What has ended is not history itself but rather humanity's imagination and society's capacity for accepting new forms of political and economic development. Bold new ideas with the potential to significantly improve society — such as Universal Basic Income (UBI), the Harberger Tax proposed in Radical Markets, and Quadratic Voting (QV) — have emerged. Yet, due to entrenched interests and the depth of civic education required, these radical ideas rarely see societal implementation.
Fortunately, the open-source, free-entry, and historically unencumbered "blockchain republics" serve as sandboxes for democratic experimentation. Decentralized autonomous organizations (DAOs) supported by projects like Democracy Earth are actively testing UBI and QV. These organizations are learning by doing — experimenting and iterating quickly. They not only advance the model of cross-national digital communities but also provide valuable reference points for nation-states to improve governance.
If nation-states and fiat currencies can coexist with blockchain republics and community tokens, they could meet diverse societal needs, reflect varied human values, and complement each other. This could transform our world from being singular and flat to becoming plural and multidimensional — going beyond mere positive-sum to achieving a new kind of republic.
P.S. Please take some time to read the mitigation letters and statements from some of the defendants in the two cases involving Stand News and the 47 activists charged with conspiracy to publish seditious materials or subvert state power: Chung Pui Kuen and Lam Shiu Tung of Stand News; Owen Chow and his girlfriend; Lau Wing Hong’s girlfriend Wong Yu-kio; Leung Kwok Hung; and Ng Kin Waii. Modern city life is busy, but this is the least we can do.
