Radical Decentralization: The ECSA (Multi-) Perspective
Decentralization and Blockchains
The revolution in decentralization is well underway but there are new problems to solve. Bitcoin solved the double spend problem of the distributed generation of money by combining the cryptographic hash and the distributed blockchain ledger. Ethereum effectively took this advance of the money form and made it programmable by building a fully programmable virtual machine on top of it. Today we need to take that programmable overlay and give it the kind of suppleness, ease of operability and capacity, that we ordinarily associate with the everyday use of the internet.
Blockchains, spawning from the original Bitcoin Ur-blockchain, currently enable one of the most important frontiers of decentralisation: finance. Beyond that, Bitcoin blockchain has already demonstrated the utility of distributed ledger technology for socio-economic decentralisation, in multiple areas:
Value
The question of value in blockchain algorithms has haunted skeptics, but at this point in the history of their development the argument of value has been won through market valuation, and not many who initially doubted the source of the value of blockchain care that their doubts about the underliers may not have been answered. In reality, Bitcoin, Ethereum and the ERC20 alt coins produce value by following the program of the attention economy and encrypting social participation around their platforms in their algorithms. A platform’s blockchain is the encrypted sedimentation, the archive, of a set of complex social relations emerging around its function. Its incorruptability and immortality constitutes by means of distributed computing both a secure record and a rhetorical statement that testifies to the vitality of the social forms that it has spawned.
AI
Thus bitcoin can be seen as a kind of artificial intelligence, an algorithm that gives rise to a whole new set of social relations. Like the hash that it uses from transaction data, the functioning of the platform algorithm as a whole can be seen as creating a hash of social activity — the only thing left in the chain are the transaction records no matter what passions, brilliant ideas, or mundane thoughts were effected in the sociality around the operation of platform. The distributed ledger thus functions as a component of distributed cognition.
Encryption
This unique abridgement of life activity encrypted in every block is at once unforgeable and irreversible in two senses. First, once verified by the nodes and built into the chain the block is irreversible (6 confirmations is the statistical limit here for bitcoin). Second, and for us just as significantly, it is irreversible in as much as it cannot be reverse engineered to restore the socio-subjective record of its making. We cannot know what any transaction was for or why anyone made it — that information is encrypted but cannot be reverse engineered. But for its trace in the blockchain the amplitude of life is gone. The social is amortized in the blockchain.
Fiat currency and capitalism, achieve a similar level of encryption by other means. The excitement around blockchain is an excitement around a new means of encryption that takes one huge step towards the democratization of finance through techniques of decentralization. Hold a dollar and you have no idea of its history or of the history of its production. You don’t know who sweat for that dollar, or for that matter, who died for it. Money has always been a kind of encryption process, but the code and thus the controls have been hidden away — sequestered in the hands of the most powerful: Central banks, financiers and their militaries and states. With the domination imposed by imperial finance ordinary people were incapable of engineering their own financial spaces or of proposing the rules of their own systems of valuation in the financial register.
Citizenship
The great contribution of bitcoin is that it took control of the operating system that is money away from the very banks and states who ran financial programs in modern times for their own benefit and began a long dreamt process of democratization by making the program for money a verifiable function of distributed computing rather than an exercise of third party hierarchical hegemony. Bitcoin also proposed a rewriting of the social contract in which participants (nodes) are participating in the verification of the integrity of the system, in a way that is no longer possible either in banking or representative democracy. Thus it is suggests a kind revivification of the social contract, a new type of citizenship in which each comrade is also an overseer. And, due to the private key, this same system limits surveillance far more than other more sinister forms of transparency.
Thus cryptocurrencies create a kind of opt-in sociality. One may buy in (or mine in) to various communities that to certain extent set their own rules. New choices for economy and for social affiliation are becoming available, though it must be noted that the sociality is only minimally encrypted and thus can be considered weak. We can wonder what it might be like to have a platform with far more robust social relations embedded, a platform that does not require such a full amortization of the social in order to generate its distributed system of benefits.
Equity
The Bitcoin innovation also revealed another significant aspect of money — anyone holding it is also a stakeholder in the platform. If you hold US dollars, you have some equity in the operating system of the US, and by definition you have a stake in its militarism and domination. If you hold Bitcoin, you have an equity stake in the Bitcoin platform — the value of your funds is based upon an index of the vitality of the life of the platform. The quantity of value you own over the market cap of the platform expresses your proportion of platform ownership.
Finance as Mode of Expressivity
The point of the long preamble above is to clearly state the consequences of the Bitcoin innovation and to project these forward in time in order to grasp their potentials for next generation innovation.
1) Blockchain is a new structure for the uptake, encryption and archivization of social participation related to finance
2) The vitality of blockchains is directly linked to their democratic promise. It is also what produces the value of cryptocurrency platforms.
3) Radical decentralization offers new proposals for citizenship, equity, equality and value creation. In short, it offers new forms of sustainable, cooperative sociality that do not require the exploitation of others for robust emergence.
Ethereum made a huge contribution to the process of the encryption of sociality by means of blockchain, to the verifiability of financial (and social) contracts and to the democratization of controls with its Turing complete virtual machine or world computer written on top of the blockchain. Suddenly, with Vitalik Buterin’s Ether, Satoshi Nakamoto’s Bitcoin algorithm had programmability and flexibility on top of its verifiability and permanent resiliance. In principle anyone could write a contract on top of their money and it would only spend if certain computationally verifiable conditions were met. However, despite being infinitely more capable than bitcoin, Ethereum is still plagued by problems of scalability and as we have indicated here, robustness with respect to expressivity. Like bitcoin and money more generally, it is a medium, but still narrow-band.
Distributed Autonomous Organization (DAOs)
Ethereum also made possible the distributed autonomous organization, a computationally rule based collection of stake-holders who by issuing a token created a codified framework for collective interaction. This is significant because it showed that communities within a community could be instantiated. Here both differentiation and interoperability are key.
Initial Coin Offerings (ICOs)
As importantly with Ethereum, anyone, but in reality, any group, could issue a new token running on top of Ethereum. This affordance of the platform has been the single most important technical innovation supporting the current ICO boom. The myriad cryptos now extant also show that the desire to generate social forms around self-issued financial instruments clearly demonstrates that self-issuance is a profound enabler for a broad spectrum of projects. We gather that it is the shared stakes that such issuance enables and to a certain extent programs that accounts for much of the excitement.
The ECSA Multi-Perspective
ECSA has viewed the ICO boom as validation of its vision of open sourcing finance. The field of computational sociality that emerges in response to the domination effects of a capitalism that has become fully computational cannot afford to ignore the appetite for non-traditional financial tools. They indicate concentrated and pent up aspirations that can inspire computational design strategy and emergent social architectures. The enthusiasm around ICOs also reminds us of something easily forgotten: the appetite for new forms of finance is only reductively grasped as simple greed. A deeper understanding recognizes that creativity and forms of life are linked to financial opportunity and possibility. Creative transformation of life is profoundly linked to financial control.
This last explains the failure of the internet to realize the dreams for expressivity, communication and creativity. What was touted as a democratizing form was also and simultaneously a huge engine of value extraction that monetized representation and semiotics, converting those energies into valuable numbers (“big data” and so on ) that could then be moved up the value chain and banked by corporate proprietors. “Semio-capitalism” means that the meanings we make on the internet as well as elsewhere are products of labor, the value of which is extracted by someone that owns the means of mediation (what some will recognize as means of production). Thus this form of exploitation, dependent upon the centralized ownership of platforms demands a rethinking of the role of finance in order to break the stranglehold of centralized ownership on creativity and vitality. But just as hierarchical and centralized finance has, under capitalism, harnessed the multiplicities of life to abstract value for aggregators, a decentralized modality of finance might create abstract value from life activities that remain with the agents of activity rather than becoming an alien power over the living. A robust, expressive media platform, founded on expression, participation and collective ownership, that binds value creation to creative expression in the broadest sense is now on the historical horizon.
Finally we can clearly state the problem ECSA’s Space and Gravity (respectively, a platform designed to foster the easy creation of millions of tunable economic spaces, and a secure computing fabric based on object capabilities) set out to solve.
1.How to first recognize that the democratization of financial tools is a necessary historical development, and
2.How to advance a computational platform capable of fully enabling new thinking and acting in the scripting of financial architectures, architectures that are now clearly understood as a medium of organization and expression.
3.How to provide access even to those with few resources beyond their own creativity.
The near term project for ECSA is that any person or group should and soon will be able to issue their own money-equity in the form of a token with the same ease as they go to Instagram, Facebook or Google today. Buy-in can take the form of financial investment, creative proposals, creative expression, and social innovation of any form.
The token means not just the blooming of a thousand (or a billion) DAOs but of a thousand (or a billion) ICOs. And, what is crucial, not only one-off ICOs but an economic space of new ICOs/offerings, building ecosystems of value. Anyone or any group will be able to offer a proposition with respect to any activity whatever that specifies the terms of their offering in a legible way. This proposition can produce support of many kinds as well as equity stakes in any endeavor whatever. In short, it allows people to be equity stake holders in the forms of sociality they elect to participate in.
Token as financial derivative
A key point here is to recognize that a token offering by say a poetry group is in effect the issuance of a derivative. A token issuance is a financial instrument with two surfaces: one facing the value proposition that is, the activities, on which it was founded for and is based, and the other, facing the market. Tokens may be bought or received and distributed through participation. Participants can decide what they want to do for or in relation to the program of their token economy. Issuance and uptake indexes vitality. A market can decide whether or not it wants to go long or short on the organization’s constellation of activities. Shorting means relative indifference, while going long means investment of various kinds, whether in the form of financial support, practical participation or both. The inflow of resources enables the constellation to achieve its mission.
Such self-issuance will allow for the qualities of an activity, event or praxis to exist as the underlier of the value of the issuance. Likewise it allows for the legibility and intelligibility of activity to produce valuation that supports the qualitative activities that people seek in their lives.
We cannot say for sure what this new capacity to sustain coordinated but decentralized social forms will feel like or what it may accomplish. But we do know that the desire for dreaming without being exploited speaks to the current condition of planet Earth. Not just jobs, but lands and screens have become extractive zones. A new generation of radical finance may allow the creators of value, those who we still might think of roughly as humans, to keep more of what we create in both the qualitative and quantitative domains. For we know, or should know, that the only hope for democracy is economic democracy. The radical decentralization of finance is a significant step in that direction.
