Can the World Computer Save the World? Part 3: Building an Economy with a Future
What is the great theory of change for Ethereum and the blockchain industry which will galvanize, inspire, and ultimately save us?
This 3-part series presents a guiding narrative and vision for the blockchain industry fit for the current and oncoming conditions of the world.
- Wicked Problems
- World Models & Theories of Change
- Building an Economy with a Future
Let’s get to work.
What should Ethereum’s theory of change be?
To be worth a damn in the grand scheme of things Ethereum has to meaningfully contribute to controlling climate change. And maybe other existential risks like AI.
We have far too many smart people working together to be shooting for smaller goals than this. We want our work to matter and nothing smaller than this counts because if we fail on the existential risk stuff it is not going to matter how much volume went through our decentralized exchanges or what our NFT collection was worth.
The World Computer should be used to do some computation which reduces our chance of extinction or breaking the ecosystem.
Preferably the world computer should be part of a global effort to reduce the earth’s existential risk to zero. It’s a long road to get there. Can we do an ICO for long range sky scanning to stop asteroids hitting earth? I don’t know.
But what I do know is that the World Computer is well positioned to be used to do computation which directly cuts our existential risks by crushing climate change.
Carbon Footprint Calculations
Right here, right now: what is your carbon footprint?
Your answer, I guarantee, is “I don’t know.”
You can get an approximation from a carbon footprint calculator, but it’s just an approximation. The well-meaning among us buy these offsets once a year to cover at least some of our damage. But until these systems are precise they cannot be automated. Imprecision means there is always a manual step!
When we know exactly what our footprint is, we can easily say “buy offsets for my footprint.” But when it is all approximate there is always a sense that we are making a decision to accept the imprecision, to roll the dice on the estimate. You have to look and think “does that seem about right?” and the whole system grinds to a halt on that decision.
Having to calculate our own CO2 footprint and accepting that the result is just a guess produces enough friction in the process that very few people in practice do CO2 offsetting. Even relatively well off green activists don’t do it, even though the cost is typically a hundred dollars a year or less.
Automated, we might all offset our emissions. It might even become mandatory, the cost of staying alive, the most basic act of personal self-responsibility. Because we have systems like zk-SNARKs on top of ERC20s, we could imagine a future with a mandatory CO2 tax. In that potential future everybody has to offset 100% of their CO2 consumption. But their privacy is protected. The system knows how much CO2 they have to offset, but without ever revealing the lifestyle choices which led to generation of that CO2 footprint.
We could get more privacy and a safer world.
That seems like a fitting job for a World Computer: to run the global carbon accounting system which makes sure that trillions of dollars a year are spent planting trees and rewilding or grinding up olivine mountains to make sure that the earth does not dry out, burn up, and blow away.
So let’s put that right into the Ethereum Theory of Change right now. The world computer will run the global carbon accounting system. That’s our ambition. That is one way we’re going to change the world.
Reducing waste in the global economy to zero
Another grand challenge is global resource overconsumption. It is easiest to see when we think of deforestation.
We are simply using too much wood and land. The forests are getting cut down for other purposes.
But a third of the food grown is wasted. If we could not waste that food there would be more than enough land for the forests to be left in peace. Rewilding at scale requires food efficiency.
The food chain has an enormous number of links. There are tens of thousands of significant actors. Gigantic companies and tiny farms. Huge franchises and one-cook restaurants. It all combines to make the food system. There is simply no way to get a system in place to manage all of this on any database technology other than the World Computer. Every corporation involved will want to keep its private data in a silo. They will want to hide evidence of their own waste, particularly in areas where waste equals profit. To keep people honest, we need to get an overview of how the food is produced, where it is stored, and how it is consumed. Over time we can tighten up the waste in that system and enormously reduce the pressure we place on the land. We need to break open the silos to understand the performance of the system as a whole.
The World Computer. Nothing else is going to do this. Yes, it envisages a World Computer with nearly infinite computing power but that is coming. Computers continue to get faster every year. The underlying algorithms that power Ethereum get more refined every year. L2 solutions which bind to quantum supercompuers can’t be that far away. This thing can actually work.
And of course it’s not just food. Empty houses in countries filled with homeless people. Systemic structural inefficiencies exist in every supply chain. The world is both cold, starving and homeless at one end, and packed with empty five bedroom houses and untouched boxes of cold pizza at the other. I am not suggesting that we pack the homeless into those five bedroom houses. Rather I am suggesting that if everybody moves up a little we make plenty of room for everybody. Efficient markets should provide for everybody.
But the efficient market cannot be efficient enough on the existing technical, social and legal infrastructure. The world computer opens up the possibility of genuinely efficient markets in truly dramatic ways.
Circular Economy
Every manufactured thing in the world eventually winds up in landfills or as scrap, with a few exceptions. Some of the scrap is recycled and turned into new products, but some of it just sits and rots until it catches fire.
In almost no case is the true cost of disposing of things calculated. So much recycling just winds up as landfill or dumped in some poor country too.
Similarly, when an old camera or an old phone breaks and cannot be repaired because it was designed not to be fixable, both its owner and the world get a little poorer. The global capital base is depleted every time a poorly designed thing breaks and enters the waste stream. All these individual leaks seem small but together they constitute a flood of wasted life. The time and energy of the person who made the thing are wasted when it breaks. Then we must count the cost of a replacement. What of all the natural resources burned to make a thing? All of that is lost when a thing breaks in a way that cannot be repaired. Almost every single one of my old phones and laptops could have been resold to somebody else if it had been designed to be repairable.
In a world this resource constrained we cannot afford that kind of waste.
Imagine that all manufactured goods have digital twins on the blockchain. As the assets change hands and experience wear and tear every repair is logged. Soon we can see what is repairable and resellable, what can be patched and mended, and what is just dead-loss scrap. If every single thing we buy has a unique ID and a permanent place to store its records, things will change. Manufactured goods cannot fail to improve in every way when exposed to the harsh light of transparency. Nobody wants to buy junk. A property rights transfer is as simple as having a neutral third party check that the item matches the blockchain record of the object, and an NFT is transferred to move the legal ownership.
Mattereum has built this. Gold bullion, art and collectibles to start, but pretty soon we will present prototypes for real estate transactions and consumer goods. I believe this is the unstoppable adoption-driving blockchain use case everybody has been searching for: a better way to buy physical things than anything Web2 has offered. Read more about this approach to managing our environmental footprint in the Mattereum Manifesto.
Mattereum embodies this theory of change
My company Mattereum deeply reflects this theory of change: we are (in the long run) a carbon accounting and radical resource efficiency company. I built the company to implement a theory of change I believed in: the World Computer cleans up the global economy. Computation on the global computer allows us to slash our carbon footprints.
Mattereum also sells half a million year old stone hand axes as NFTs. We believe that art and antiquities, luxuries and collectibles, are excellent initial markets for Mattereum. While the world wakes up to the carbon challenge, we still need to develop the technology. There are many excellent here-and-now use for a system which binds objects to multi-faceted statements of truth about the objects. Very soon, blockchain scaling solutions will enable Mattereum to add trade in clothing, laptops, and eventually all manufactured objects. Real estate is an amazing use case too, and we expect prototyping in late Q4 2021.
Here are some of the first physical artworks we are selling on OpenSea.
There’s also a lovely collection of Never Touch Fiat Again gold bars here. NFT art combined with gold bullion: you can literally take physical delivery of the gold bars! Built in partnership with Lohko Wallet.
The way this system works is that for each individual NFT, such as this digital art piece backed by physical gold —
— there is a Mattereum Asset Passport which gives a legally binding set of promises about the gold bar associated with the NFT.
You can check where the gold bar is vaulted and how it is insured. Pretty soon the Mattereum + Union partnership will produce a DeFi-based protection system for buyers. This is a perfect example of the modular and composable nature of services in the Ethereum defi ecosystem: Lohko handles the gold, NTFA handle the art, Mattereum handles the proofs and provenance, UNN provides additional risk handling, and an as-yet-unnamed lender will soon be lending money against these gold bullion NFTs.
Of course, we would not be doing this if there were not some more fundamental purpose: every gold bar sold in this system has CO2 offsets purchased from Nori, offsetting not only the CO2 burned by Ethereum mining on the NFTs, but also the CO2 emitted by the original mining of the gold itself.
We started with gold in vaults because it is one of the highest value and best controlled global supply chains: a good fit for management by NFTs and smart contracts. Fine art is a close second, although it is much harder to prove art fraud than gold fraud. High end liquor is another great area, because so much of the product is stored in high security warehouses. As we get more of these key assets into the system, it will become clear to more people how totally revolutionary this application of the World Computer really is.
What is Ethereum’s Theory of Change?
Ethereum’s theory of change is comprised of the theories of change of every person working with Ethereum.
I feel like I’ve made a good case for the potential to use Ethereum tokenization of CO2 and offsets, and as an instrument for the eradication of waste in areas like consumer electronics.
What are the other areas we could use Ethereum to transform?
For example, is DeFi the key to accelerating solar and wind energy installations? Funding vaccine research? Could we get that deep sky scan done? Fund space missions?
What is your vision of Ethereum’s theory of change? What are the elements of global transformation that you feel the World Computer genuinely enables?
I mean the stuff that matters. Save the world with the World Computer.
An economy with a future
Things change in fundamental ways when they have names (or other unique identifiers). ISBN numbers empower libraries. ISIN numbers enable the global financial architecture to function. Namespaces rule everything.
An Ethereum contract address can map on to any underlying data structure you like. If you use IPFS the immutable data it connects to can be of arbitrary size. A single namespace for all objects and assets is possible. You just need the data structures to represent what is vital about the object.
Just imagine that for a moment. An Ethereum address attached to every physical thing, and every asset, you own. Orthogonal legal operators for sale, rental, escrow, use as collateral on a loan, or fractionalization and equity release. Those legal operators are based on Ricardian contracts, so they look like legal contracts to a court. But to a smart contract, they look like another smart contract: a digital/legal bridge that creates property rights. Mattereum calls this the Smart Property Register. For anything you own. And everything that everybody else owns too.
Everything carbon calculated, and fully offset. There would be trillions of dollars a year of offsets going into planting forests and restoring wetlands and everything else. It might be ten years before we have built a blockchain that can handle that kind of data load, but I guarantee you, it is coming.
In that world a huge number of humanity’s fundamental problems just evaporate.
Mamading Ceesay coined the term “Economies of Omniscience” to describe the total economic transformation that such a world will bring. No more delays, no more things that don’t fit in the back of the truck so there have to be two runs. A computer figures that stuff out, because it has the data to figure it out. If a thing was made using CADCAM then the original digital models ought to be available on chain. Read the barcode or scan the NFC, download the CAD files, pass it to a piece of software which knows how to pack stuff in trucks: “yes it will all fit” and it does. These are the “economies of agility” which are enabled by actually being able to use computers to work with the material world properly. Better still, since the discovery of zkSNARKs and other zero knowledge methods, we can create “blind omniscience” where the coordination systems run perfectly but without any actor being able to see more than their part of the system. In short, the advantages of central planning, without a central planner. A privacy preserving panopticon. Technology now enables us to scale this paradoxical tower.
Now imagine this operational paradigm applied across everything: when you fly, you borrow everything you need when you land. It’s all waiting for you at the airport. When you move house anything which it is cheaper to sell and rebuy on the other end is waiting for you when you arrive. When you need tools for a job they come from your neighbours. It all starts with being able to identify physical property, clearly record its condition, and bind it to legal frameworks that enable it to transact.
Then we apply this to the industrial economy: no more shortfalls or warehouses of feedstocks which won’t be used for months. All the advantages of Just In Time, but coupled to the capability to buy and sell components directly to other companies, or your suppliers. Immediate configuration of capability by pre-designing systems using computers, and then provisioning the purchasing for all the necessary items using smart contracts. Option everything you need to buy, then when you have options on everything and you know it will all work if everybody does their jobs, execute the options. It’s a revolution like Just-In-Time manufacturing, but across all organizations rather than simply down a single supply chain: a Just-In-Time industrial web.
Then property can be fully utilized at all times, and we can create years of economic growth just from increases in fundamental process efficiency without increasing our ecological footprint at all! We are rearranging physical things and their legal property using software. We do this to optimise their utility and their disposition. Optimization and simulation pave the way to globally efficient logistical solutions.
We can use the World Computer to teach matter to dance. And a dancing world might be able to feed all of us because perfect coordination frees up vast resources.
It is a moral imperative that the Ethereum community starts to get serious about climate change.
My work with Mattereum is a culmination of decades spent thinking on how to manage scarce resources on the planet such that people’s basic necessities of living are secured, even in the worst of situations.
I’ve distilled some core insights on the technological and social transformation of material culture in a little book called The Future of Stuff, in which I explore how things came to be and how we can build a better path forward where humanity can live in equilibrium with the planet.
If long-reads aren’t your preferred media, our company podcast extends this discussion to other builders and thinkers who are shaping material culture across a range of industries.
