Depending on your information environment, crypto is either an unethical series of Ponzis or the obvious underpinning of the future economic system. And depending on which of those views you take you likely have a radically different opinion regarding our choice to build on top of it.

Those of you who already denominate much of your wealth in tokens and cryptocurrencies (whether you came to embrace the space through reasoning or its motivated cousin) will have little interest in the rationale of our choice. Quite obviously we've made the right one and you can move along (but you might be interested in this article: An Info Market for the Overton Window).

For those of you who have brains still bigger than your bags, I offer these inferences:

Democracy is quite fragile. It requires good information environments, good leaders, and good institutions.
These leaders, institutions, and information environments appear to be quite easily captured.
The ability to achieve capture seems to get much stronger as you accrue wealth.

I don't think I need to cite my sources on this one, just ah.. look around.

If we want democratic or pluralistic governance, we either need to limit the wealth that any one person or group can control (in practice, this is very hard to implement because wealth can take many forms) or we need to design governance systems that are robust to wealth disparities and are intrinsically difficult to capture. We have to achieve this in a world that is highly financialized: the existing wealth disparities create adversaries eager to maintain or increase their control over the system.

Of course, this sounds Hard. If that is actually possible, wouldn't we have done so already?

Perhaps we just haven't needed this sort of solution before; we've always found ways to patch the existing system so it could keep running. But now, in a more globalized, multipolar world it's harder to enforce uniform rules (and maybe that's for the better). Perhaps also the primitives have changed, we now have the ability to stream petabytes of cat videos at near lightspeed to any location on the planet. That's gotta change something.

While knowledge of this problem is somewhat widespread, to date there has been little progress on it. Why? I'd like to draw attention to two additional constraints that have hindered our progress on designing anti-capturable governance systems:

Radical ideas aren't worth having because they don't plausibly achieve impact
Even in possession of plausible radical ideas there's nowhere to test and learn

The status quo has been that if you are truly interested in creating systemic change you should focus on coming up with small, manageable changes that are legible to the system you're trying to change. This of course means you cannot nearly take a whole system approach, you can only make piecemeal suggestions because only piecemeal adjustments can be enacted. And you should of course be very conservative with your suggestions because the consequences of getting it wrong will affect many people, so your experiments should be scoped to minimize downside. After all, a failed governance structure for a utility service could mean millions don't get water, best to stick with what's been done before, if only because its shortcomings are already well understood.

Of course, these two issues compound on one another. When we fail to believe that radical ideas will ever be able to gain traction, we don't even consider them. And when we never try new ideas we don't ever get evidence that new ideas are worth considering.

This is what's potentially exciting about crypto. It offers a context that not only permits governance experimentation, but one that's so desperate for better systems it has earmarked half a billion dollars and it hands out $40k grants for experiments. Even better, the worst that will happen is that a bunch of people who have invested their disposable income in a highly volatile asset will lose that disposable income — if you fail, no one's water stops flowing, no one's house gets rezoned, no endangered fish goes extinct. And, as a bonus, it's filled with Ponzi schemes. There's perhaps no information environment more degraded. No incentive landscape more distorted. No users with baser motivations. No system with dynamics more reflexive and self-reinforcing. There is no context more adversarial and more highly financialized, except perhaps for the real world itself.

Get your convent or commune to successfully govern themselves with your novel governance tool and I'll congratulate you on your castle in the sand. Get a bunch of self-interested, highly tactical crypto degenerates to use it to produce good outcomes despite their best intentions and wow you've got my attention. Like archaea flowering on deep ocean vents or a hairy creature in its hovel after a global asteroid event, anything that can survive such toxic tribulations is destined for greatness. We’re creating that creature, and that means we must choose to grow in that sort of context.

That's why we're building in crypto.