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Prologue 1: Big Tech vs. Internet vs. Crypto vs. Governments
Maybe It's obvious to everybody that "Big Tech" companies, Alphabet, Apple, Microsoft, Amazon, Meta, and others have more power and resources than some countries. Ian Bremmer, a political scientist, wrote an essay about how these companies are more powerful than states and governments. Balaji Srinivasan and Parag Khanna published another essay that argues the future does not belong to Big Tech or governments but to the Internet. Another political scientist, Bruno Maçães argues that cryptocurrencies have the potential to form sovereign organizations. Sovereign organizations can collaborate with nation-states or even replace them. What do you think can happen when a "fair" organization can enable social coordination without central authorities? It's obvious that people won't need to pay tax which is enough big lever to draw power out of state hands.
Stephan M. Walt, another political scientist, wrote another essay that rejects these ideas and depicts a picture where the future belongs to traditional powers aka governments. I don't recommend judging Dr. Walt too soon. We know Bit-Tech companies are powerful, they have all of our data, they know more than governments and etc but everything is not data. The physical world outside of servers and cellphones is being governed by governments. The physical world has something that I would like to call the "gravity of dependency". We depend on cars and planes for transportation, we depend on food is being produced on farms. We depend on the supply chain to bring us our laptops and cell phones. So I believe we should think twice when we say the future belongs to the Big-Tech or the Internet or cryptocurrencies.
Prologue 2: Crypto, Web 3, controversies
In the summer of 2017, I was working on designing a platform called "iam", which was a platform to enable commenting and voting on any URL to create consensus-based knowledge over the Internet. In December 2017 Vitalik Buterin published a good piece, Notes on Blockchain Governance, and talked about that same problem addressing it as legitimacy. Legitimacy besides its definition in Wikipedia is a concept that emerges wherever we have coordination dynamics and or we have people interacting with each other. At least to this day biggest advocates of crypto, like Buterin, believe that legitimacy is a scarce resource, especially in the crypto ecosystem and lack of legitimacy is too big of an obstacle, even for hundreds of thousands of people who are contributing to it.
Let alone in this ecosystem, VCs and crypto exchanges mostly are making things worse rather than better. They invest in a coin, they list it, people buy it, they sell it high and make a huge profit, people lose big money and VCs go to another coin. This kind of behavior combined with god-knows-number of scams on crypto has put even the vision of Bitcoin at risk (here, here, and here). While Ethereum is moving slowly toward that vision, it still seems to have been derailed from that vision or at least people like Jack Dorsey think that way:
(It is worth mentioning that Jack stepped down as the CEO of Twitter to focus on Square, changed its brand to Block and he's focused on blockchain. )
Where are we standing?
On crypto vision:
Although I think legitimacy is important I don't see legitimacy as a leverage point to flip the situation. Because we can't produce legitimacy. It is a result of other dynamics. We can say that we've reached the point of living in the virtual world -as much as the physical world- when we see the legitimacy in the virtual world.
I believe in the works Ethereum is doing. At least they seem to be promising movements toward that vision and complications in their operations are not the point. They are revolutionary. (here, here, here, here, and here) My strongest argument for it is that betting on decentralized applications of financial services is more promising toward that future that Bruno Maçães is depicting. For example, as Buterin also mentions, DAI project with Augur, xDai, PoolTogether, and zk.money is more alive than Tether which is more of a danger for the industry than a benefit. (here, here, and here).
New alliance:
Another angle is the thriving NFT ecosystem which also proves the vision point.
(Numbers in million U.S. dollars)https://www.statista.com/statistics/1221400/nft-sales-revenue-by-segment/
I think not only NFT alone can be bigger than cryptocurrencies but other innovations will join this movement and by innovation, I don't mean shitcoins, I mean technologies, and ideas more similar to Ethereum and NFT.
A technology to save
I talked about the reliability of cryptocurrency in OtE #2 because I think crypto is more about legitimacy than anything else. The most important aspect of crypto is that it allows the capital to be controlled through legitimacy. So I don't think crypto and web 3.0 will replace governments; it has its own specific use case and it does things that were impossible before.
What I see is crypto ecosystem is in danger. I see systematic forces like "gravity of dependency" from one side and crypto ecosystem controversies from another side, putting enormous pressure on the crypto growth to a point that even techies are becoming more skeptical and asking why this revolution hasn't happened yet? They are neglecting the fact that cryptocurrencies, although that have technical innovation and scientific rigor, have brought hope to suppressed communities and countries.
Crypto growth is complicated, it's even scandalous and if new platforms like Ethereum 2.0 won't grow soon, or new branches of innovation like NFT don't happen, this growth will become too little too late.
This failure is not just a fade-out of one technology, it can put other advancements in danger. So I think all techies and Big Tech companies must pay attention to new innovations in this industry and help build useful dapps as much as possible instead of staying on the side and watching this vision die.