A few years ago, I stepped back from investment advisory work and took some time to get to know crypto.
Bitcoin had been around for over 8 years at the time. I’d been watching and thinking about the implications of this technology since I first heard about it in late 2009 when I was immediately struck by its potential to transform society.
Plus, the whole “smart contract” thing fascinated me.
I was like a 45-year-old intern. There was a lot to learn. Crypto was finally gaining traction and I knew I’d better get up to speed.
So, I hoofed it a couple of hours in each direction to MeetUps in D.C. and Philly – and started my own in Baltimore. I wanted to get to know as many players in the space as I could. I couldn’t wait to meet a bunch of like-minded, liberty-first folks like myself.
Well, that didn’t happen.
All I ran into were lawyers and consultants hoping to peddle blockchain technology to governments, corporations, and industry groups. And the only way they could peddle their blockchain wares was to strip out the “permissionless” part.
Which entirely misses the point…
Permission Means Control
When Bitcoin hit the scene, no one had any clue who was behind it.
We still don’t. We only have the pseudonym Satoshi Nakamoto to go by.
But this much is certain. He/she/they had a goal in mind. That goal was anonymous money secured through cryptography on a distributed digital ledger. And by masking bitcoin addresses with public/private cryptographic hashes, no one can selectively prevent Bitcoin transactions from being confirmed.
Transactions can’t be censored by the network. Users can’t be censored by the network. In short, no one needs the permission because it was specifically designed to be permissionless.
It was a world without fences. And corporations and governments need their fences.
A world of free competition without regulatory moats is scary to those who have built careers and businesses by building government-enabled walls. Plus, they don’t understand the incentives that crypto creates so they don’t trust inherently “trustless” technologies.
Because consultants are smart – there’s no denying they’re not – they got around this. They focused on the blockchain – which got rebranded as Distributed Ledger Technology (DLT). And all they really did slam processes into the hot, new thing. Higher fees, you know.
With that, companies like Walmart could claim a traceable supply chain built by blockchain.
Now, DLT probably works. It does what they intended it to do and only time will tell whether it delivers the efficiencies and accountability they hope for. However, there’s no inherent value to DLT. It does nothing a network of databases can’t do. At least they have their shiny new thing.
But crypto continued marching forward. The core technologies kept working and didn’t ask permission. And now they are positioned to replace how corporations get structured and individuals choose to be governed.
Bring on the DACs
Distributed Autonomous Corporations, or DACs, are smart contracts that provide services just like companies and governments.
Ethereum was the first blockchain to really lay the groundwork. The ease by which smart contracts could be tested and launched on the platform created a frenzy of new tokens. Most do nothing special, a few do actual work, and a couple actually set the stage for the corporations and governance of the future.
DAOstack and Aragon are two prime examples. Gnosis too. And with Bitcoin’s taproot upgrade, we will soon start seeing DACs on the blockchain of blockchains.
With these tools, entrepreneurs can create a smart contract with decision making processes baked into the code. It can have a hierarchy or be totally flat (check out holocracy). And ownership can be represented by tokens rather than shares of stock.
Goodbye LLCs and C-Corps, hello DACs.
When people whine about the gap between rich and poor, this is how you narrow it – ease of entry and open competition, not more handouts, safety nets, and “equality of ends” social justice.
It also creates a foundation for prosperity that will far outstrip anything we’ve managed to date. And with the advances about to be unleashed upon the cryptoverse, that day will be here before you know.
I intend to be ready. In fact, my plans are nearly ready to share. And when I do, you’ll be among the first to get access. You’re free to come along for the ride and leave the world of permissions and fences to the sclerotic corporations and politicians of the past.