Taking the Bitcoin dream of ‘freedom as self-sovereignty’ beyond anything even Bitcoin maximalists ever dared to dream of.
A viable, sustainable and scalable P2P sociopolitical economy, which embraces digital and data sovereignty for all agents, is about to emerge. One in which, as a consequence, money and intermediaries — social, political and economic — will no longer play the central, and therefore controlling, role they play today.
Let us start where Bitcoin started
Whatever socially and politically legitimised ‘flavour’ of money operates within a given community, nation or civilisation, it fundamentally shapes the economic, social, and political potential — and therefore possibilities — within those domains.
The Problem with Money
Money — by its very nature a social construct, as it fundamentally relies on people’s confidence in it — has three defining core functions. These are:
- a store of value (i.e. sufficiently stable in value — and particularly, in people’s confidence in it — over time), which enables it to be …
- a medium of exchange (i.e. also sufficiently saleable across scales and space), all of which enables it to be …
- a unit of account
However, in order for money to work at scale, standardisation is also required which, in reality, inevitably means centralisation. Unfortunately, this intrinsically undermines the hardness of money (i.e. it’s ‘uninflatability’*), and the level of confidence people can have in its core functions, because decision-making shifts into the hands of the few. One cannot have sound money without reliable and consistent long-term hardness, as well as confidence-maintaining monetary policy. Regrettably, the few — or in the bygone case of a monarchy, an individual — have a long history of abusing their fiduciary responsibilities on both counts.
So, in order to solve the ‘hardness of money’ and the ‘level of confidence’ problems, we need to solve the centralisation problem, which — applied more broadly — asks:
How do we coordinate, cooperate and collaborate across space and time, at scale, without the need for intermediaries, representatives, executives or organisation-owners?
Arguably, this articulates, for some, the holy grail of anarchy (which should not be assumed to be synonymous with lawlessness, chaos or disorder).
Limitations of Bitcoin and Ethereum
Bitcoin is an attempt at solving the ‘centralisation of hard money’ problem which in the bigger picture is a good place to start. However, it does this by using a distributed ledger of hashchain blocks (giving it immutability), hard coding hardness (giving it uninflatability), and constructing a single network-wide timeline through a decentralised but not fully distributed Proof of Work (PoW) consensus mechanism (giving it ‘uncensorability’*). This provides a form of ‘trustlessness’ by trusting the network rather than any individual entity or actor. Due to its significant practical and philosophical limitations, this approach provides only a partial and impractical solution because it is not distributed enough, not fast enough, not cost effective enough, and not scalable enough. Furthermore, it could push climate change too far in the wrong direction to be worth it, due to its electrical power consumption needs. Unless of course, conversely, it turns out to be a boon for renewable forms of generating electricity by increasing the financial incentives for it, perhaps even leading to green energy infrastructure which otherwise would not be funded. Nonetheless, these shortcomings will still apply even if all the near-to-medium term solutions work out as proposed. Even so, the four key features of Bitcoin*, in its current form, namely, immutability, uninflatability, uncensorability and unconfiscatability, are an historic achievement.
Ethereum, although not necessarily trying to solve the same problem — and not necessarily doing a good job of it — is fundamentally based on the same underlying ledger technology as Bitcoin and so suffers from the same or similar limitations, even before we include its ‘centralisation of power’ issues, its shortcomings as a cryptocurrency relative to Bitcoin, the complications and disadvantages of smart contracts, and its attempt to move to a Proof of Stake (PoS) consensus mechanism*. What Ethereum has done is enable the launching of several thousand Altcoins, none of which seem to make much sense, and nor do their fundamentals give one confidence that they will ever achieve their stated goals. Given that this has taken place in a new asset class and an unregulated market, no one should be surprised by the emergence of a FOMO-FUD wild west, or the role played in it by market makers.
Mutual Self-sovereignty — the foundational core construct of a fair and just sociopolitical economy
In my view, economics should have a strong focus on thrivability in human social systems — viable, sustainable and inclusive thrivability, at scale.
Although I over-simplify, I believe that at the heart of thrivability lies a dialectic in human social systems, that of group solidarity vs. individual sovereignty (cf. the political philosophy divide of left vs. right). Both aspects of this dialectic provide tremendous benefits for the group and the individual, namely, social cohesion leading to better survival odds, but this comes at a price, namely, acquiescence, conformity and homogeneity.
However, I would suggest that solidarity and sovereignty are two sides of the same coin – they mutually and dynamically ‘co-form’ and ‘in-form’ each other, and so co-evolve symbiotically. They constitute a ‘dialectical singularity’ which is brought into ‘harmony’ through mutual self-sovereignty (cf. Yin-Yang; i.e. black and white dynamically interacting with each other at the same time, without either diminishing in identity or the two combining to become a ‘middle’ grey). In this dynamic, both social cohesion and individual sovereignty are both ‘strong and fluid’, at the same time — a concept often referenced in Daoist philosophy using the metaphor of water. I believe it is this perpetual dynamic which leads to the anti-fragility of a human social system. I further believe, it leads to the perpetual emergence of one’s sense of self and one’s sense of identity.
The mutual self-sovereignty challenge
Even solving the centralisation problem — of hard money or more broadly — would not be enough. We need to go further and address ‘the mutual self-sovereignty’ challenge, which can be thought of as:
Not only do I need a viable option of not having to participate in any particular socially mediated ‘game’ played by a particular set of rules, I also need to be able to, easily and permissionlessly, change the rules of the game (i.e. create a forked version — preferably not a sh*tty/scammy one) and invite others to play, or — just as easily and permissionlessly — be able to invent an entirely new game.
Furthermore, and equally importantly, in all such games the rules (i.e voluntary and mutually enabling constraints) must be enforceable and policed in an emergent and self-organising manner by the participants — governance of the people, by the people, for the people — and the rules must respect relativity (i.e. multiple relativistic timelines) — global consensus should not be necessary. Otherwise, we inexorably end up back at the centralisation problem.
All of which means that Bitcoin and Ethereum — specifically their underpinning blockchain technology — are not going to take us where we need to go, in order to address our most pressing global and local challenges. This is because they are not sufficiently workable and do not go far enough although they will have been critical and essential catalysts. Even those who were initially inspired by the distributed ledger technology (DLT) of Bitcoin, as a means of addressing the challenges of enabling a radically new peer-to-peer (P2P) sociopolitical economy — which motivated some in the Bitcoin and Ethereum communities — are now having to recognise, and to concede, these limitations. Hence, the sense of malaise and disillusionment among the Ethereum and Ethereum-esque developers who are not in it for the money.
Holochain and the Post-monetary Economy
Holochain, on the other hand, will take us where we need to get to. It is the first technology, in human history, which genuinely addresses the mutual self-sovereignty challenge, completely and at any scale — in fact, it is inversely scalable, its efficiency and efficacy improve as network size increases — and as an integral component of the MetaCurrency and Ceptr projects, it also pre-dates both Ethereum and Bitcoin.
Holochain provides a bio-mimicry inspired, software-based, enabling social technology — a pattern, if you will — from which can emerge anarchy — life without mass intermediation as a necessity. Thus empowering us to move to a post-monetary epoch with, for example, a multitude of asset-backed mutual credit (crypto)currencies — which on Holochain are natively inter-operable — using a much broader definition of currency (i.e. a formal symbol system for shaping, enabling, and measuring flows — e.g. of value, promises or reputation). A much more enlightened interpretation of Hayekian thinking, I would suggest, than the neo-liberalism version.
A value flow, of any kind, must first be acknowledged and recognised before it can be managed for the better — making visible only GDP-related flows has been a disaster for humanity and the planet, if not potentially catastrophic. Then, and only then, can we begin the work of reinforcing or amplifying interrelated positive flows and mitigating — hopefully eliminating — interrelated negative flows, in an emergent and self-organising way. Thus we can form the basis on which more meaningful, and more humane, wealth and prosperity can be created for the many, perhaps even, for all.
Despite its long history, for most people, the economic and sociopolitical revolution Holochain will induce will seem like it happened overnight. This is because it is an open source software solution taking place in a digitalised world. It can be deployed at speed, at scale, and at zero marginal cost, using the full range of computational device types from a Raspberry Pi, to a smartphone, to a tablet, or a laptop — even a server — using software development languages and tools which produce secure, compact and fast web and native apps.
The first hApp (Holochain dApp) to be built — using Rust and WASM — is Holo, an hApp for hosting hApps which includes the first ever mutual credit cryptocurrency called Holo Fuel, to reimburse Holo hosts — who with Holo, host hApps using the spare computation and storage capacity on their own devices. This enables hApps to be accessed using a standard browser — such as Holochain favoured Mozilla’s Firefox — through the web, without any change in the user experience. However, even this hosting can be avoided, since any device running Holochain is natively both a user and a host. Holo’s purpose then is to provide a bridge between the current server-based web and the potential longer term server-less — because it is peer-to-peer — Holochain alternative. Ultimately, it should be possible to integrate mesh networkingtoo, which would mean a genuinely and fully distributed internet and web.
Furthermore, Holochain’s data integrity model supports mutual self-sovereignty by having an agent-centric orientation, using sourcechains (think, agent owned hashchains), digital signatures, and validatingdistributed hash tables (think, BitTorrent and GitHub), rather than a data-centric orientation. Thus fully returning value realisation and ownership, as well as privacy and confidentiality, to those actually creating the value locallyrather than intermediaries, representatives, executives or organisation-owners, seeking to extract and monetise it.
The Ultimate Question
Once workable, practical and ubiquitous, mutual self-sovereignty — as a movement — will redefine every dimension of our lives — social, political, economic, artistic and cultural. Most profoundly, it will completely change the nature of the stories we tell ourselves and each other in order to navigate our lives, both intra and inter generationally. In doing so, along with the societal implications of advanced, model-free, deep reinforcement learning AI — not to mention Ceptr and Ceptr-based AI — we will ultimately re-conceive and therefore redefine what we believe it truly means to be human — in the 21st century.
Disclosure: I am financially and philosophically invested in Ceptr/Holochain/Holo. I have never invested in Bitcoin, any alt-coin or crypto asset.
Thanks for reading.
Antonopoulos, M. (2016). The Internet of Money: A collection of talks by Andreas M. Antonopoulos: Volume 1. Merkle Bloom.
Antonopoulos, M. (2017). The Internet of Money Volume Two: A collection of talks by Andreas M. Antonopoulos. Merkle Bloom.
Ammous, S. (2018). The Bitcoin Standard: The Decentralized Alternative to Central Banking. John Wiley & Sons.