“Regulation” of Crypto is a failure of tech philosophy
Authority steps in when you fight the fear and the fear wins
Watch an ant colony. It adapts automatically. When a heavy rain washes away a hill, the ants rebuild and reroute, somehow communicating rapidly across the entire population. They grow until the ecosystem restrains them — including the day a human pours boric acid down the main hatch.
Complex systems regulate themselves. If they don’t do it effectively, entropy takes hold. They decay and die.
When these systems bump up against other systems — governments, markets, existing players — the friction and interference cause regulation. When the philosophy of a technology does not allow it to regulate itself without the “help” of outside forces (or adapt around them), it has failed.
Crypto is no different. It is self-regulating. It’s simply grown to the point where the impact and the fear of the unknown have caused “regulators” to take action. The regulation starts with the markets. You know things are getting heavy when the top 20 countries of the world have a meeting to decide what blockchain means.
Centralized platforms were/are no different. When the Internet reached critical mass in the late 90s, the major markets setup dedicated Internet Divisions. The “unregulated” space of the Internet was heralded as the final, free frontier. Net Neutrality maintains this. Silicon Valley references it to avoid responsibility for the effects of their systems.
“…both Republicans and Democrats wanted the Internet spared the regulatory oversight that applied to telephone, television, radio, and satellite.” — bipartisan feelings for the Telecommunications Act of 1996
I recently sat with a group of smart people who attempted to define technology. We went all over the place. When did we start using the word? Are hammers and cars still “technology?” I concluded it has something to do with whether or not a tool is accepted and understood.
We know how cars and blenders work, so we call them cars and blenders. Everyone uses and accepts a car or other motor-powered thing — except the Amish and some other Luddite groups. They might call them some form of the word technology.
In the guidebook FutureShock, Alvin Toeffler spoke of two reactions to a rapidly changing world:
- You accept and keep pace. Your conception of reality becomes impermanent. You expect constant change. If a locksmith shop closes, is demolished and redeveloped into an artisan coffee bar — of course it did.
- You deny and romanticize the past. Your refusal to accept change is noted in a separation from new things, a disconnection from the noise of the world. Bitcoin and learning machines are forever technology — until your niece sends you some crypto for your birthday.
Listen to how the word technology is used in the world today. People building artificial intelligence don’t call AI a technology. They rarely even call it AI, preferring to go into detail of particular types and applications of machine intelligence. They are comfortable with it. They accept it and use it, waiting for the next, expected change as their systems adapt.
In Senate hearings or other regulatory discussions, the word technology becomes a cover-all and fallback for anything not fully understood. As tech becomes even more complex, more beyond our capacity to understand and accept, we’ll see more splits for new things: those who call them technology and those who create the names.
What happens next is a matter of how the different cryptocurrencies respond to new regulations. The decentralized model and thousands of blockchains make it nearly impossible to represent a unified voice.
Cryptos like EOS claim to offer transparent testing and understanding of new tech through open access and development. It didn’t play out that way. They took on the likely external regulation before it hit them. In this case, self-regulation meant inheriting and using the old, centralized way of tech development. Only a handful of “producers” make decisions about what is developed and who gets what on the chain.
When the fear of technology and the unknown’s impacts begin to affect established systems of power and governance, the regulators of the establishment take control. They will limit and constrain — or adopt and integrate into their models of the world.
Technologists cannot predict exactly how fear will play out.
Effective tech philosophy creates self-regulation which adapts to external regulation. When someone else has to step into a self-regulating system, it has failed to adapt to its ecosystem.
Powerful new philosophy often emerges from the fires of regulation.