“Unbanking the Banked”

When I was participating on the panel at the Blockchain Economy Istanbul Summit a couple of weeks ago I was on the regulatory panel for blockchain, I was getting a bit annoyed.

I wasn’t annoyed at anyone on the panel, all great speakers, but I was annoyed how people were looking towards the emerging regulatory framework for guidance on what they could work on. That some regulators had already defined what a utility or security token or hybrid token was and you could apply accordingly for a license/business under that framework. But when I heard the definitions of what certain regulators had come up with, I was annoyed. Because we are, for the first time in nearly 30 years, talking about how we understand the world’s economic system. While I’m all for regulatory test beds and sandboxes, trying to regulate blockchain innovation now by defining it into bite size digestible points where it's easy to understand for the purpose of applying a full regulatory framework absolutely takes away the genius, imagination and innovative creativity from this moment.

LET’S STILL ASK THE QUESTION…

At the end of the panel, we had a question about if any of us had read the ‘Crypto Anarchist Manifesto’ and the panel looked at each other — it was such an unexpected question, and while yes, I had read it, it wasn’t at the forefront of my thoughts for the last year or so. But it was an apt question to highlight the point that the innovation represented in cryptocurrencies is meant to challenge and present a new paradigm of how the world’s financial system is structured. And anything that has this kind of promise for something exceptional isn’t going to be exceptional if you’re going to definite it in a way that makes you feel comfortable.

I’m not an cypherpunk, and I’m not an anarchist, but I’m also not afraid to recognize that just because it’s been done this way before, that there isn’t still something better out there. For me, it's not about disruption, it’s about progress in a world where the accessibility for the opportunity of equality is simply not there. The power gap between labor and capital is just too great, the current system that we have of the ‘banked’ enables a system where everyone is locked into a path that only creates more disparity of wealth under a trade off of stability and comfort.

CRYPTOCURRENCIES, NOT BLOCKCHAIN

The crux of the issue has been that nearly all projects in the cryptocurrency space say that they have a utility token, but really they don’t. And the reason for that is, actually launching a cryptocurrency which is in an open decentralized distributed system is a massive mental undertaking. This isn’t a 1 week thought process, it’s something that is intensely difficult because it requires you to understand monetary economics, network economic and network effects and have a background in business (our own ARCC whitepaper took me 18 months to write and I’ve specialized in network effect strategy/modeling my entire business career). The platform protocol projects from the tech side are totally valid projects in the space as computer science problem solving, but all these other projects looking to establish the next hit commercial blockchain application are all unimaginative (yes, I’m speaking about all these tokenization security projects that are what, just less regulated IPOs?) and are in no way worthy of the technological gateway presented in cryptocurrencies.

If you’re talking about blockchain technology or distributed ledger technology or programmable money, then you’ve already given up on the real potential here on this space and that is ‘unbanking the banked’.

WHEN THE SINGULARITY COMES

We’ve all come to accept the credit/debt structure/cycle, and it’s the macroeconomics of our system. And throughout the history of our economics, every time we’re projected to hit a wall for growth, technology comes and takes us to the next level of productivity. So what happens when we have the AI and data, the VR/AR, the ubiquitous connectivity, and automation? When anyone can make anything because the level of ‘singularity infrastructure’ is there and capital is cheap, then what?

Then it’s a matter of, is this ‘singularity infrastructure’ owned by the few, or, is it accessible and strengthened by the many? And it’s not about giving the unbanked a micro banking model, and it’s not about destroying the existing financial system, but it’s a recognition that the singularity as a technological achievement is now also giving us the keys to create a system where we can solve this issue of wealth disparity, that we can be structurally financially inclusive and everyone that participates can grow in line with the economy of the technological singularity, because then it’s all going to be about humanity’s level of participation.

TOGETHER OR NOT AT ALL…

I intuitively feel that if we can push through and continue to advance our understanding of cryptocurrency models that are not based on credit/debt but rather decentralized distributed network effects, then we will have reached the next stage in humanity’s organization and understanding of wealth enough for all.

Banking the unbanked is bringing those excluded by the system into a broken legacy system. Unbanking the banked is a recognition that there can be a better system that is based on the technological singularity that is coming that is more effective towards productivity than what we have in the credit/debt structure. And honestly, we get there together or not at all.

Sinjin David Jung

March 12, 2019 (Hong Kong)