“All money is a matter of belief”. Adam Smith
Since its origins linked to crypto-anarchism and ultra-libertarian ideologies, Bitcoin and the crypto world have evolved into a vision centered around community building and governance. Most of the crypto initiatives are now decentralized (not all of them though) and many are organized around DAOs which operate as automated cooperatives of collaborating parties. This Crypto Community Capitalism is an expected outcome for a movement so much obsessed with individuality and it has significant sociopolitical and economic implications on how web 3.0 works and where it will lead us as a society.
Anyone involved in assembly decision-making at their school or at their clubs knows that is not that easy to reach consensus in a small group of well-intended stubborn individuals. Successful crypto communities are built on three basic pillars: an economic incentive program for all community members, a governance system for effective decision-making, and, most importantly, a passionately shared objective.
The economic incentive program may require a token issuance as an instrument to share the value created by the community. The difficulty for token economics is how to balance fairness and incentives in an ever-evolving community. A conflict may arise on how to reward the initial team, early adopters, and the community at large. Some crypto projects are decentralized in technology but not in ownership, choosing a more classical path of VC funding. The reasoning behind this choice usually lies in the founding team's desire to retain control and the economics derived from it. Some other hybrid models where VCs participate in the token acquisition are already common in Web 3.0. But, distinctly from Web 2.0, crypto capitalism focuses on creating value for its users, not only through the services offered but also through direct economic incentives that reward usage and contribution.
The collective governance system has adopted many forms as voting power and decision-making process vary from project to project. Egalitarian and efficacy principles are difficult to balance in decentralized governance but again the general principle is that the community should rule. The shared objective is perhaps the most powerful and distinct tool in crypto. The objective may be only financial but strong communities are built on a sense of purpose that goes beyond economics. Crypto is a world of emotions and passion as much as wealth creation. Bitcoin is probably the strongest version of this line between ideology and token value. Bitcoin is a reflection of the intent of a community to build a currency that transcends frontiers and governments and the faith in that purpose keeps the value of bitcoin rising against all the criticism from its critics
“Land for those who work on it”. Emiliano Zapata (Mexican revolutionary)
The social experiment of the 20th century to create a more egalitarian society through a state-run communist economy resulted in human tragedy and huge destruction of value. China is one of the few standing countries which has economically survived the perils of communism thanks to its dual system of combining private business and a government-run macroeconomy policy. But…what about the failures of capitalism? Most advanced economies have created a huge amount of wealth and wellbeing but inequality is rampant and increasing. Not surprisingly the combination of inept, sometimes corrupt, politicians with economic inequality has created a fertile ground for polarisation, discontent, and despair in Western countries. Institutions in capitalist countries are not trusted anymore by the general public as the dream of a meritocratic society seems further away.
The social contract between the public institutions and the people is at its all-time low. But the economic ‘labor contract’ between companies and their employees is even at a lower point. Long gone are the times when there was a company-employee loyalty that resulted in an ability for long-term planning and stability. Salary, mortgage, house, and retirement is a formula that is not working anymore. For a while, it looked as if the new Internet technologies were going to bring a new set of rules. More flexible jobs, independence from the corporate office looked promising but in the end, they end up benefiting just the big tech, web 2.0 social media, and ‘gig economy’ companies.
The hope that Web 3.0 brings is to create a new version of the economy (and the society) where the platforms that create value belong to the members of the community that participates in its development through the contribution of content, code, or collaboration. It is the tokenized and decentralized Twitter or Facebook. It is the Creators’ Economy where everyone can be a Creator. It is the multiverse land that belongs to those who work on it.
“This is the way”. The Mandalorian
The attractiveness of the crypto world is that proposes an alternative path. From the social and political point of view, crypto proposes to build a different way to run the monetary and financial system leaving behind the existing institutional framework. From the point of view of the corporate world, crypto allows for a different way of allocating roles and rewards in value creation.
Crypto is much more than a bunch of libertarian folks speculating on the next coin, it is a tech revolution that may bring a new kind of capitalism, more collective, more community-driven. We will see if the hope comes reality but for sure in the process, we will giants fall and new important entities being born.
"It takes all the running you can do, to keep in the same place.” Alice in Wonderland
The growth of the crypto world is exponential due to the use of open software and built-in economic incentives to attract developers and users. It is difficult to keep pace. With my Mirror blog posts, I will like to contribute by sharing my learnings and experiences in Web 3.0. I will analyze trends and I will bring my views on different projects with the hope that the community will find them useful