The anthropology of #cryptocurrency and the possible end of the nation state
Tribes and totems
Don’t get me wrong, I am a huge fan of #bitcoin’s technology and all the amazing work it’s led to on the lightning network, ethereum, tezos, fabric, corda, ripple and countless other shared ledger technology paradigms. In fact that’s the area I work in day to day means I more than believe in the potential of the underlying technology.
Yet, the fact that some otherwise educated and intelligent people, known as bitcoin maximalists, desperately, against all reason, want to believe in a stream of memes that suggest the #bitcoin network itself with its seven transactions per second throughput and insatiable energy hunger is THE answer to the troubles of modern finance, probably shows the desire of mankind to return to a simpler world, a desire to escape from our lives of endless complexity.
Thinking fast and slow
Why the end of reason in the age of science? Because when we fail to find answers in science and reason, we seek refuge in faith and religion. System 2 of Kahneman and Taversky can be quite powerless in the face of system 1.
In other words, it doesn't matter how much human brain we have. The lizard brain's greed and fear will generally prevail and when we own a coin that is part of our online group identity, it will overshadow facts and logic and lead to the shrill cries of.... buy my group’s coin.
Identity as the basis of money
So the tribesmen and tribeswomen scream in unison — buy my Internet group’s identity coin because that’s how I find validation and acceptance in this complex online existence where I am alone yet connected to all the other Internet cavemen most of which I don’t even know the names and faces of.
Buy my group coin because when we as cavemen go hunting and gathering, I know the other cavemen accept me and my identity coin and will not leave me to die in the cold or be eaten by a saber toothed cat.
Trade my group coins for digital meat and fur because when you accept my stones as money you accept me as someone who will survive and replicate in the vast and scary Internet forest, you give my identity status and increase the odds of my genes (and ideas).
#Identity has always been money. No one knows this better than the truly clever Libra team at Facebook.
Online communities and identity
I said to @pete_rizzo_ back at Consensus 2018 that #cryptocurrencies are online community assets. It’s the intimate connection of money and #identity that I did not quite appreciate back then but its a topic that's mystified me since.
For many millennials and post millennials, the nation state is no longer our primary identity. Six decades of peace enabled by free trade mean our online identities are often our primary identities because its in Web groups we spend our time and seek warmth and validation…
The nation state fades in the web consciousness
When most members of my digita-lithic tribe no longer identify themselves as primarily British, the British pound does not serve me as money because the other tribe members from other nation states do not know what to do with it. I must create stones that they can accept for digital meat and fur. These e-stones define us. That is the essential idea behind gaming coins and digital collectibles too …
... and for these e-stones to retain their value and grow in value, as an internet caveman, I must promote these above the e-stones of the next e-cave-tribe. It is thus I grow my status in my e-cave-tribe and further the odds of the survival of my e-genes... My code, my ideas, my tweets, my blogs, my Ted-x talks…
The digital generation gap
The generation that rules nation states today was brought up offline on a diet of cold War paranoia, newspapers, cinemas and physical sports. There’s no human way for these leaders to find an intimate, visceral understanding of the #Crypto phenomenon.
My generation, let’s call it the mid-life generation, that went to work between 1994-1999 was the first online generation. We are the generation that had to watch buffering Internet video on dial up and get DVDs from Netflix. That is why we can relate to why #cryptocurrency is valuable and will be more so in the future
The generations that have come after mine are more and more online, especially the smartphone generation post 2008 that came to work in the global financial crisis. It is this generation that finds it hard to relate to the nation state as the primary source of their #identity
The Intergenerational Digital Divide
There is a great chasm between the 'Trump Boris Putin Modi Xi' generation and the 'world of warcraft' generation that will be bridged one way or the other by time. The Internet is a fierce challenge to the nation state as a provider of identity and therefore money, hence #Crypto.
This leads to a great dialectic at work where in one synthesis, nation states like China seek to launch their own #cryptocurrency whereas in another antithesis, India chooses to altogether ban cryptocurrency, in the face of great demand from everyone back home that I know. Will the Chinese model prevail? I doubt it because as the great song by the Canadian band Rush goes, net boy and net girl want to connect across the boundaries of the nation state into a single state in a shared identity which transcends the nation state.
Identity, Money, Trade and War
War has been an intrinsic fruit of identity since we were cavemen. Homo Sapiens fought with the Neandarthal and won, Paleolithic tribes fought, iron age tribes fought brutally and then the nation state turned the art of war into probably the largest global industry. In a sense, the modern Anti Money Laundering (AML) regime, is a potent weapon of war too — it encourages friendly money laundering from Africa and India to the Cayman Islands and takes militant censorship action on money transmissions, which it can not control.
This ‘lack of dominion and control’ is why some nation states are at war with cryptocurrency ranging from measures such as an explicit ban in India, to throwing inter-state and regulatory impediments in America.
What remains to be seen is... how and when will these Internet communities go to war with each other? We see very early signs of this anthropology in online twitter fights and tribalism. This was evident in #bitcoin maximalists trashing #ethereum, #bitcoin cash and every other coin since. In fact, the word “altcoin” coined by #bitcoin maximalists itself embeds the notion that only #bitcoin is the one true #cryptocurrency and all other coins are (lesser) alternatives. If that sentiment has echoes of every religion ever, well, that must be because we are the same species that has existed since the time of Moses, Manu and Mohammad with little genetic change.
What next? Sponsored Hacks of other chains? Malware? I shall not even dare to imagine physical world attacks here but I'd not rule them out. As Friedman argued in his disputed Golden Arches theory, the golden arches of McDonald’s that symbolise free trade have prevented many a war since the second world war. So what about trading of digital goods between these online communities to sustain peace between digital communities?
Crossing the Chasm
Cryptocurrency is here to stay. Some nation states will go to war with it, some nation states will try to co-opt it and both will miss the whole point of it.
It’s not cryptocurrency they are fighting, it’s the internet. The nations that fight cryptocurrency will only impede their own progress into the next era of the internet and all the bounties that it shall bring. One way or the other, as the internet civilisation, we can’t turn the dial back on time and technology … it’s not a force we can stop, because we as a generation will fade away into time and the young digital beings will inevitably take over from us.
We must find policies to cope with this technology and work with it to achieve the objectives of human welfare and development for our future generations.
Much will be determined by the direction of travel of globalisation and free trade. If the nation states succeed in reversing these forces, we shall within two or three decades go to great wars by which the nation states still justify their control of the offline world. In parallel, whether it’s the snooper’s charter in Britain or the great Chinese Firewall, the online and offline worlds are at war today in the form of continued attempts at internet censorship by governments of almost every nation state.
And if globalisation and free trade prevail, the many currencies of the nation states will be supplanted, if not replaced by Internet community moneys, which we call cryptocurrency. Will this be the irrelevance of the modern nation state in favor of a single global web-consciousness divided into many digital tribes and communities with their own powerful identities, rules, laws, rituals, totems and taboos — and trade?
We shall see won’t we?
To some extent, we already see all of this exist on crypto twitter.
If you could see what I have seen…
Whatever the course of history, if I live another 30 years and and asteroid doesn't end the whole story, I will have many a fascinating story to tell in the other world about this Internet matrix I saw evolve and dominate human consciousness over my brief lifetime.
Amen.
