Great Protocol Politics – Bitcoin, Ethereum and Web3 Are Already Reshaping the World
The digitalisation of the world, accelerated by the pandemic has meant that Silicon Valley is not only home to the world’s largest companies or its richest tycoons, it is extending its influence into more and more spheres of life. Fintechs disrupting Wall Street is already evident in many aspects of finance. But with the emergence of cryptocurrencies, even monetary policy is under threat of losing out to protocols. This piece extends that logic to geopolitics as well. Whilst one of the authors – Parag Khanna is a geopolitical specialist, Balaji Srinivasan has his background in tech and has founded and funded several successful companies. Last month, Balaji appeared on Tim Ferris’ podcast for a marathon episode lasting almost 5hours, sharing his thoughts on how technology in general and crypto/Web3 in particular are changing the world. This piece captures some of the essence from that podcast – the authors lay out 10 ways in which the world is transitioning from the age of geopolitics to one of techno-politics. We feature a few of those concepts here:
“1. Network proximity is now on par with physical geography:… Think of it as a digital Atlantis—a new continent floating in the cloud where old powers compete and new powers arise. Within this cloud continent, the unit of distance between two people is not the travel time between their positions on the globe but rather the degrees of separation in their social networks.
This means anyone can put themselves near anyone else by simply following them on social networks or keep others away by blocking their accounts on those same networks—no plane ticket required. Any floating entity within this cloud continent can likewise attempt to interact with any other by pinging the right IP addresses, for the purpose of anything from transactions to cyber invasions—no preexisting proximity required.
Every citizen of the old world, provided they have internet access, can simply become a citizen of the new by telecommuting via their screens to spend a few hours in the cloud each day, as billions of people routinely do—no physical immigration required. Encryption serves as the digital equivalent of physical fortifications in the cloud, allowing any user to defend their digital property without resorting to traditional munitions—no physical force required.
3. The remote economy has created a talent market for citizens:… in a competitive marketplace of jurisdictions where somewhere can be anywhere, no single government has as much authority as people think.
Places as varied as Estonia, New Zealand, Singapore, Taiwan, Portugal, the United Arab Emirates, and Chile are all vying for newly mobile talent through “nomad visas” and other similar programs. After all, many aspects of life are already in the cloud (like email, education, and e-commerce) and many others are partially digitized (like finance and foreign incorporation).
5. Cloud-based regulators are outcompeting state-based regulators…Traditional taxi regulators might do cursory inspections of medallion holders. But they do not regulate their drivers as aggressively as Uber, Lyft, Grab, Gojek, and DiDi do. That is, they do not GPS track every ride, ensure both driver and rider can complete a transaction, record star ratings from both parties, and use the full panoply of tools available to a modern “cloud regulator.”
…However, the next step is the full Web3-based decentralization of online marketplaces and sharing economy services, which is already well underway via peer-to-peer trading of cryptocurrencies (so-called decentralized exchanges). These new forms of transnational regulation, where app users have a stake—and a say—in how their platforms are run, will expand beyond cryptocurrencies to the peer-to-peer exchange of other goods and services over time.
9. Companies, cities, currencies, communities, and countries are all becoming networks
We used to think of books, music, and movies as distinct. Then they all became represented by packets sent over the internet. Similarly, today we think of stocks, bonds, gold, loans, and art as different. But all of them are represented as debits and credits on blockchains.
We should start thinking of collections of people—whether communities, cities, companies, or countries—as cohesive agents unto themselves, less constrained by territoriality and with different layers aligned with one another in shifting combinations. Physical governments can, for example, integrate with digital networks, and companies can run as apps on a city state’s dedicated blockchain.””
To many of us (likely crypto skeptics), these might seem a bit far-fetched. Indeed, the authors begin by highlighting a couple of pieces sharing the counterpoint as well. Going by how what was thought of as fiction years not even decades ago is already reality, an open and constructive view to both sides of the argument is warranted.
“1. Network proximity is now on par with physical geography:… Think of it as a digital Atlantis—a new continent floating in the cloud where old powers compete and new powers arise. Within this cloud continent, the unit of distance between two people is not the travel time between their positions on the globe but rather the degrees of separation in their social networks.
This means anyone can put themselves near anyone else by simply following them on social networks or keep others away by blocking their accounts on those same networks—no plane ticket required. Any floating entity within this cloud continent can likewise attempt to interact with any other by pinging the right IP addresses, for the purpose of anything from transactions to cyber invasions—no preexisting proximity required.
Every citizen of the old world, provided they have internet access, can simply become a citizen of the new by telecommuting via their screens to spend a few hours in the cloud each day, as billions of people routinely do—no physical immigration required. Encryption serves as the digital equivalent of physical fortifications in the cloud, allowing any user to defend their digital property without resorting to traditional munitions—no physical force required.
3. The remote economy has created a talent market for citizens:… in a competitive marketplace of jurisdictions where somewhere can be anywhere, no single government has as much authority as people think.
Places as varied as Estonia, New Zealand, Singapore, Taiwan, Portugal, the United Arab Emirates, and Chile are all vying for newly mobile talent through “nomad visas” and other similar programs. After all, many aspects of life are already in the cloud (like email, education, and e-commerce) and many others are partially digitized (like finance and foreign incorporation).
5. Cloud-based regulators are outcompeting state-based regulators…Traditional taxi regulators might do cursory inspections of medallion holders. But they do not regulate their drivers as aggressively as Uber, Lyft, Grab, Gojek, and DiDi do. That is, they do not GPS track every ride, ensure both driver and rider can complete a transaction, record star ratings from both parties, and use the full panoply of tools available to a modern “cloud regulator.”
…However, the next step is the full Web3-based decentralization of online marketplaces and sharing economy services, which is already well underway via peer-to-peer trading of cryptocurrencies (so-called decentralized exchanges). These new forms of transnational regulation, where app users have a stake—and a say—in how their platforms are run, will expand beyond cryptocurrencies to the peer-to-peer exchange of other goods and services over time.
9. Companies, cities, currencies, communities, and countries are all becoming networks
We used to think of books, music, and movies as distinct. Then they all became represented by packets sent over the internet. Similarly, today we think of stocks, bonds, gold, loans, and art as different. But all of them are represented as debits and credits on blockchains.
We should start thinking of collections of people—whether communities, cities, companies, or countries—as cohesive agents unto themselves, less constrained by territoriality and with different layers aligned with one another in shifting combinations. Physical governments can, for example, integrate with digital networks, and companies can run as apps on a city state’s dedicated blockchain.””
To many of us (likely crypto skeptics), these might seem a bit far-fetched. Indeed, the authors begin by highlighting a couple of pieces sharing the counterpoint as well. Going by how what was thought of as fiction years not even decades ago is already reality, an open and constructive view to both sides of the argument is warranted.
