Currencies as a Catalyst for Cultural Evolution (Part 3): Holochain and the Bigger Picture

Cosmic microwave background radiation — probably the “biggest” picture out there! We won’t be zooming out quite this far in this article, but there will be cosmic undertones in the background. (Image source: Wikipedia)

Welcome back! We hope you’ve been enjoying these deep dives into a new paradigm for understanding currencies and the role they can play in directing our collective behaviour. In Part One, we explored different models for understanding human motivations and why currency designers need to consider the level of moral development within the user base. In Part Two we offered a new model for observing systems, including human society, through a flow-centric lens. We also outlined the main components of a more formal currency theory.

In this article, we want to take a big step back to frame the context for why thoroughly rethinking currencies is important. We also explore the role Holochain can play in enabling this new kind of currency theory to be implemented within communities across the globe.

Accessibility Statement

We at Living Systems Network are committed to making our work as accessible as possible. Throughout this series, we have done our best to make the contents accessible while staying true to the depth and complexity of the material. Although this is no easy task, we hope you find that this series has introduced you to certain topics in ways that are more clear and digestible than other sources. If you have any questions or concerns regarding the accessibility of this series, or you are aware of supplementary material, please let us know!

In honour of our commitment, we plan on supplementing this series with audio conversations to further unpack the contents, stay tuned for that.

TL;DR

I must admit, this is a lengthy article which delves into some knotty material. It’s likely there may be some unfamiliar concepts and words. I’ve done my best to contextualize these concepts as well as link to educational resources where I can. The intent is that it is re-read multiple times and I hope new insight can be gleaned with each passing. With that said, here is a brief summary of the key elements:

  • Why rethink currencies? Currencies have been part of humanity for at least as long as writing. In other words, societies and currencies have been co-evolving for thousands of years. By exploring currencies from a broader point of view, we can better understand how large numbers of individuals form coherent social organisms. We can also better identify and design leverage points of change.
  • What’s the point of studying complex adaptive systems? Like most living organisms, humanity is a complex adaptive system. Simply put, we consist of a collection of individuals and relationships between these individuals. The state of the individuals influences the relationships between them, and the relationships themselves shape the state of individuals. In these kinds of systems, cause and effect are not linearly connected, meaning prediction is impossible. The main lesson here being that the more we understand ourselves pragmatically/empirically, the more effective action we can take when implementing systemic change.
  • What does Holochain have to do with this? Holochain is not “just another cryptocurrency”. This article will hopefully clarify the context in which Holochain was conceptualized, including its mother project, Ceptr. I also do my best to articulate just how paradigm busting Holochain is through a number of simplified examples.
  • Call to action: Do you find this stuff interesting? Want to learn more or get involved? Was something unclear? Reach out or comment on this post!

First: Why does this all matter? A personal reflection.

The truth is, my understanding of currency is incomplete. I am not a currency expert, only a curious mind willing to challenge the status quo. At the very least, I want to share with you my motivation for digging so deep to expand my own conception of currency.

As I’ve been diving deep into this body of work around currency design (initiated by taking The Metacurrency project’s Currency Design course), I kept encountering barriers and challenges: it felt overly complicated to rethink currency in such a fundamental way. Why add more complexity to an already confusing concept? Why bother putting myself through this cognitive effort to grapple with such a slippery idea, one that is seemingly always slipping just out of reach? I’ve continually confronted questions like this along my journey into reimagining currency. I’m certain you will as well — if not already.

I kept encountering barriers and challenges: it felt overly complicated to rethink currency in such a fundamental way. Why add more complexity to an already confusing concept?

How this journey has felt. The struggle to understand currencies never ends. (Image source: Photo by Wendelin Jacober from Pexels)

Throughout this series I’ve tried to make things as clear as possible, but, it’s also important to acknowledge the novelty of rethinking currencies and the resulting lack of clarity.

To explain where I am coming from, I believe in the profound importance of rethinking currencies. This is grounded in two fundamental assumptions. Firstly, I believe self-governed open societies* are a blessed form of social organization and way of life. It follows that they should be nurtured and protected with utmost care and attention. Open societies are not to be taken for granted.

*Is ‘open society’ an unfamiliar term for you? I like The Consilience Project’s definition:
“Open societies promote the free exchange of information and public discourse, as well as governance based on the participation of the people in shared choices about their social futures.”

Secondly, I see human civilization as one small part of a much grander, continuous, cosmic process. By this I of course mean the universe in its glorious 13.8 billion year entirety (see opening image for inspiration). Even if we focus only on our tiny pale blue dot, it’s still clear that humanity is but a step in something much greater: the evolution of life and complex adaptive systems* on Earth. Recognizing this improves our ability to embrace uncertainty and change with less apprehension. It also helps foster a sense of humility: we are not the pinnacle of evolution nor are we the centre of the universe.

*Is ‘complex adaptive system’ a new term for you? If so, here’s a reference to get a good enough sense for the context of this article: basically, anything that is more akin to an ecosystem or an ecology rather than a machine. For instance, ecologies consist of interconnected and entangled elements (species, organisms, environments, etc) which all effect each other in non-obvious ways. An ecology can’t be understood just by breaking it down into its basic components as there are emergent properties which can only be understood holistically. On the other hand, a machine has clear interactions between the basic components and can be understood through pure reductionism.

Although these are personal assumptions, they still relate to the degree of thought and consideration that has gone into the work by The MetaCurrency Project and other people/organizations we at Living Systems Network have been following during this extensive currency journey.

Let me elaborate.

Playing the infinite game of open society

Sometimes (but probably not often enough), I find myself speechless in awe at the current scale and interconnectedness of civilization. Consider this: as I type out these words, I’m staring at a device made up of materials and industrial processes I couldn’t even begin to imagine. It then connects to another tool which is able to manipulate matter at the nano-scale as well as send and receive signals across the world at near the speed of light. On top of that, these devices are being powered by a sophisticated system of interconnected infrastructure, converting various forms of energy into electricity and delivering it to my home. All this while I wear clothes composed of materials I don’t understand and enjoy the security of clean water, functional sewage, and reliable access to food. Thinking about this makes my head spin.

There’s something about seeing a city at night, especially from a plane, that leaves me in awe… (Image source: Photo by Benjamin Suter from Pexels)

I am both humbled to have access to such modern privileges and blown away at the fact that our collective human efforts over thousands of years have managed to accumulate into a system of such scale, complexity and coherence.

I mean, how the hell did we get here?

How did we go from hunter-gatherer tribes to a global industrial civilization with innovations like space ships, quantum computers, autonomous robots, nuclear energy, and organ transplants (just to name a few)?

How is it that nearly 8 billion people can all be coordinating their actions in ways that are at all coherent? Astonishingly, despite the immense scale, complexity and variety of behaviours and beliefs, there manages to be enough order for continued, cumulative development.

Two pillars of modern civilizations

I’m no history expert and am most definitely over-simplifying, but there are a few historical developments I’d like to bring to light as they are critical to understanding the core message of this article.

About 5000 years ago, we saw two key developments that enabled civilizations to grow in size and complexity: the emergence of both writing and money (of course, the exact timeline on money’s history is not certain — I encourage you to look into it yourself!) Both of these developments enabled novel modes of coordination. Since then, societies have been using and evolving these tools to collectively coordinate their actions in increasingly complex ways.

With the appearance of writing, societies could track and store information outside of the human brain, a necessary leap to allow more sophisticated collective knowledge systems to develop. Similarly, with the appearance of money, people could engage in indirect trade, immensely increasing the efficiency of coordinated action. We might not think of writing and money as being fundamentally related (at least that’s how I used to feel), however, turning to history reminds us that they are both symbolic systems used to weave social coherence at ever increasing scales.

Despite this profound similarity, I’m surprised I had not become aware of it until recently. Although I spent countless hours being taught how to use language and how it evolves over time, there was much less emphasis on learning about monetary theory in a similar way. To me, it felt like the monetary system was fixed and that monetary theory was opaque witchcraft, too complicated for the public to understand. In reality, though, currency systems can be as participatory and open to change as language.

Maintaining and strengthening open societies

Roughly 2500 years ago, people had the crazy idea that the people of a society should be the ones to govern and shape the direction of its collective future (i.e. the birth of democracy). Not only that, in theory, everyone should be treated equally and have the same rights and freedoms as everyone else. Of course, we don’t live in a perfect world (and never will) and injustice and inequality are ever prevalent. Even with this in mind, the fact that we live in a society with such audacious ideals is quite phenomenal, as such ideals are far from trivial. Self-governing open societies are certainly not a default mode of social organization and require continuous effort and participation from as many members as possible.

Critical to the continuity of an open society is a healthy epistemic commons (the term ‘epistemic commons’ here refers to the shared, i.e. common, practices and principles that govern a society’s pursuit, acquisition, and sharing of collective knowledge and the validity of that knowledge). A healthy epistemic commons consists of having spaces (physical and virtual) that encourage good-faith argumentation and epistemic humility, as well as a basis of public information that grounds us all in a shared understanding of reality. As we have been exploring throughout this series, well-considered currencies have the potential to contribute greatly to our epistemic commons. If designed and implemented carefully, currencies can provide transparent and participatory systems of markers for various kinds of flows within a society. These markers can help us better “see” the bigger picture of society, serving as a shared basis for sense-making.

Not only could currencies provide us with higher dimensional metrics of the health of a society (replacing or supplementing the one-dimensional GDP that occupies most of our attention), they can also help us better understand the second and third order effects of our collective action through more detailed mapping of our social flows. This kind of societal self-awareness is critical to ensure our solutions to current problems don’t end up resulting in worse problems (consider the cats in Borneo example). Given the scale and complexity of our societies, as well as the reality of exponential technology and related existential risks, we cannot afford unexpected consequences (check out one of my favourite articles describing just how complex a world we live in).

The need for a new civilizational attractor

In their current state, open societies are facing some serious threats. As of now, the two most likely trajectories are either oppression or chaos. Oppression means that order is imposed and our collective behaviour is controlled in order to help us avoid existential risks and integrate with exponential technology. Chaos means that we continue down a path of increasingly fragmented information consumption which diminishes our ability to have any shared sense of reality and ultimately destabilizes social coherence (learn more about how some of our information technology destabilizes social coherence — and what you can do about it).

For those that care about maintaining open societies, there needs to be a third option — a new civilizational attractor. That option is emergent order — where order is a result of wide-spread civic engagement rather than top down imposition of structure. Somehow, open societies need to orient themselves such that the aggregate of citizen participation results in emergent order even in the face of exponential technology and existential risks. Certainly no easy task.

Are you scratching your head yet? How can billions of humans coordinate their action in a way that leads to emergent order? Is that even possible? Are there any examples of systems that demonstrate emergent order through the coordination of billions of interacting components? Well, if you’ve been following this series so far, you probably know the answer to that: nature.

Living systems continuously demonstrate their ability to create emergent order. It’s about time we take these phenomena seriously and learn from nature. The future of open societies likely depends on it.

The evolution of complex adaptive systems

If you didn’t already know, Living Systems Network has a collaborative garden. Here, we work together to steward an unfenced urban garden, socialize and learn from nature. Every so often, while working in the garden, I would be lost for words carefully observing plants and all the living systems I was interacting with.

An aerial view of the Network’s coFood Collaborative Garden (Image source: Living Systems Network)

For instance, while staring at leaves or flowers, I would try to work through in my head the underlying steps and mechanisms resulting in these specific bio-materials and parts of whichever plant I was looking at. I’m no biologist, so my understanding is limited, although, I know enough to be left in awe. Somehow, trillions of cells, operating according to genetically encoded rules, coordinate the totality of their individual activities into a beautifully adaptive system: the plant. I mean, how can you not be completely blown away at the thought of that?

My point is that life is an elegantly complex process. Somehow, certain patterns of matter and energy result in interactions with surrounding matter and energy such that these patterns can self-replicate and evolve over time. This crazy process has been iterating for roughly 3.7 billion years, resulting in the stunning biodiversity we see all around us, including you and me. Your body and even the very thoughts passing through your head as you read this article are a result of this long and ongoing process of evolution. Formally, we can characterize these kinds of phenomena as complex adaptive systems.

Taking this broad evolutionary lens to the world provides a few key insights relevant to our discussion about currencies. Notably, it becomes apparent that we are part of a much bigger, longer process than we typically think (as noted in my preamble).

It also becomes apparent that human societies can be viewed through the same lens in which we observe living systems: that of complex adaptive systems. In my view, to distinguish between “human/artificial” from “nature” is an arbitrary distinction (although it seems to have social and psychological utility). If we want to maintain open societies, we need to better understand what we are both individually and collectively, including the recognition that society is one of many evolving complex adaptive systems on Earth.

As far as I can tell, we have not transcended the very rules and mechanisms that have been guiding the evolution of life for billions of years. The good news is that there are countless examples of life demonstrating many characteristics we want in a society: resilience, adaptability and emergent order.

Cellular automata demonstrates how basic rules (like the mechanisms of biological cells) can lead to emergent order

If we commit to understanding how exactly life has managed to create so much emergent order through the coordination and organization of billions and trillions of interacting components, maybe we can apply these principles to social systems such that we can maintain and evolve open societies in response to the threats mentioned above.

Where grammatic capacities and Ceptr come in

Well, people have been thinking hard about these very observations and questions. In fact, the people behind The Metacurrency Project and Holochain formalized these insights into a project called Ceptr.

Ceptr is an incredibly ambitious project and I won’t be able to get into all the details, but I would strongly encourage you to read more into it. Holochain, which we have been discussing throughout the series and which I’ll be explaining in more detail further in the article, is just a small part of the bigger vision of Ceptr. Familiarizing yourself with Ceptr helps contextualize the aim of Holochain and currency theory.

Broadly speaking, the Ceptr project has analyzed the evolution of various complex adaptive systems in an attempt to find some common underlying mechanism(s) that can be abstracted in a formal context (meaning they can be practically understood and described using a combination of symbols, models and mathematics).

Whether the evolutionary step is from single-celled organisms to multicellular organisms or the transition from small hunter-gatherer tribes to settled agricultural communities (and eventually states and nations), they noticed that in each of these situations there was the appearance of particular kinds of informational systems which enabled novel forms of coordination. For example, these systems could be double-helix strands of nucleotides (DNA), hormonal molecules and their accompanying signalling mechanisms or human language.

An important informational structure enabling the evolution of complex adaptive systems: DNA (Image source: Story Blocks)

Ceptr abstracts these particular kinds of information architectures into specific components that are applicable in a generalized way, which they term grammatic capacities. Under their definition, all grammatic capacities are composed of the same general components and operate according to the same principles, ultimately resulting in the same outcome: facilitating coherence within multi-agent systems and leading to emergent order. Are you starting to see any overlap with the earlier section about the appearance of writing and money? Are writing and currency grammatic capacities?

The main reason they abstracted this phenomena into a formal context was so that tools could be built to serve this purpose. Ceptr is an attempt at such a tool. That is to say, the aim of Ceptr is to formally outline society as a complex adaptive system and implement mechanisms for catalyzing evolution of this system in the direction of increasing social coherence and emergent order.

I’ve skipped over a ton of fascinating details since they aren’t the focus of this article. The main point is that the Ceptr project has thought deeply about how to tangibly direct civilization towards higher forms of social coherence resulting in emergent order. Fundamentally, it recognizes that the internet is a novel tool for implementing new kinds of grammatic capacities, including currencies and Holochain.

Alright, with these contextualizing digressions out of the way, let’s continue our discussion about currencies and Holochain, finally!

Holochain, currencies and social coherence

We’ve touched on the concept of social coherence a number of times already. Let’s elaborate on it and draw some correlations with currency theory.

The amount of social coherence currently is astounding. The fact that our global civilization works the way it does at all is amazing. For instance, try to think of all the different roles that need to be occupied for our society to work and somehow they all get filled! We have built a system that is so complex that no one human can hold the entirety of it in their minds, yet, things still work. Our actions, in aggregate, have relatively clear net directions (wealth accumulation being a predominant one).

For those who think about radical systems change (like all of us at the Network!), it’s important to recognize the degree of coherence our current civilization has. If we truly want to shift to another mode of civilization (like game B) we need to ensure such a mode has even higher coherence, otherwise the inertia of game A will likely overcome any game B momentum, continuing to drive us towards oppression or chaos.

By social coherence I really just mean the degree to which well coordinated collective action emerges. For example, a nation state is coherent to the extent that enough people believe that a nation state is real and thus act in ways that service it (this is similar to the notion of an ‘intersubjective reality’ discussed by Yuval Noah Harari in his brilliant book, Sapiens)

A key indicator of coherence is when our shared worldviews guide our actions in similar directions, enough for there to be a net direction of social activity. Game A’s net direction is effectively increasing global GDP, which is inherently tied to money and monetary theory. Clearly, currencies play a significant role in orienting our collective action. Currencies of the future should be in service of higher forms of social coherence and this is exactly the kind of thinking that has been happening at The MetaCurrency Project.

Social coherence: a measure of the bond between the individual and the collective

Another way to think about social coherence is that it is what binds individuals to the collective. Discussing the relationship between the individual and the collective is a thorny, highly nuanced subject. I will be greatly simplifying and generalizing for the sake of discussing currencies and Holochain — just a disclaimer. Regardless, I think this relationship provides a powerful framing for thinking about currencies and coherence.

To illustrate the point, we can examine examples of two different types of currencies (that is, transactional and reputational) from this perspective and then show how technology like Holochain could lead to higher forms of coherence.

Transactional value and interactions

First, let’s analyze a “medium of exchange” currency: money. To be clear, money is much more than bank notes or numbers on a computer in a bank’s datacenter. Money is embedded in a sophisticated system of technology, governance and culture. The reason money works is because enough of us trust, implicitly or explicitly, these underlying systems to be legitimate enough to ensure the integrity of the money tokens.

Here’s a simple situation to demonstrate the relationship between individuals and the collective: a person works a job and in return for working that job they receive some amount of money reflective of the value they provide to their employer and society at large. As a store of value, this person can hold on to these markers of the value they provided to the collective. Then, as a medium of exchange, they can use the money to obtain value from the collective, usually in the form of products or services.

In summary, the individual does something that is beneficial to the collective and in return they receive some marker of this value (money!) that allows them to receive benefits from the collective. This reciprocal dynamic process doesn’t occur magically. There are underlying rules and enforcement mechanisms that ensure the money can only be created, obtained and used in certain ways.

Again, the reason money has any utility is because enough of us understand, adhere to, and enforce these underlying rules. This is what I mean when I say currency is what binds the individual to the collective. It enables interactions to occur between individuals and society at large in a systematic way. Typically, when dealing with another person, we make judgments about their integrity based on their behaviour and reputation. Currencies allow us to interact with the collective, the integrity of which are judged based on the underlying systems of rules and enforcement. In both cases, there is an element of trust, either of the other person or the established social systems.

Debt and loans work in the same way. Basically, it’s about an individual making a promise to the collective, saying, “if I use all these products and services now, but can’t reciprocate the value right away, I promise that I will contribute an equivalent amount of value (plus interest for your patience) back to society over time.” The underlying systems hold these promises to account. If they are not fulfilled, there are consequences.

Predominantly, these underlying rules are held and enforced by governments and banks, which we trust as stewards of such power.

Reputational value and interactions

Let’s look at another kind of currency: university degrees. A university degree, in this broader understanding of currency, is a form of reputational currency. What is the utility of a degree, anyway? What kind of interactions does it enable between individuals and the collective?

Basically, a degree is meant to assert someone’s credentials. Just like money, a degree has a whole underlying system that gives it enough legitimacy for people to take it seriously. A university is a bureaucratic institution of checks and balances (like governments and banks), which provides assurance to society that person X with degree Y has Z competencies.

An example degree. A token of certain static (basically, not digital) information backed by a system of integrity, the issuing university. (Image source: Pinterest)

Instead of employers or opportunity providers having to extensively assess an individual’s competencies, a degree provides a simplified marker, a symbol, representing a certain set of skills and capabilities, ensured by the legitimacy of the underlying systems of rules and enforcement (the issuing university and the overarching system of accreditation for post-secondary institutions). We trust that if university A issues degree B the degree actually means something, that it has reputational value.

Said in another way, a reputational currency like a university degree lets someone demonstrate their abilities in one social context (at the university) and have these abilities recognized in completely different social contexts (with an employer), so long as the degree is recognized.

Again, these systems have underlying rules built in about how to create, obtain and use these reputational currency tokens. For example, you can only obtain the degree if you obtain a certain amount of credits, you can only obtain a certain amount of credits if you pass the courses, you can only pass the course by showing sufficient knowledge on tests and assignments, and so on.

Rules of social coherence

In both the case of money and degrees, we are fundamentally dealing with the same thing: a set of underlying rules about social interactions and the use of methods and markers that ensure people are operating according to those rules. Both act as binding agents between individuals and the collective. Someone does something of value (by obtaining certain skills or performing work) and has ways to demonstrate this value (as a degree or money) in order to interact with society at large. We don’t have the time to be personally acquainted with every other human we interact with throughout our lives. Currencies ensure that despite the lack of personal acquaintanceship, there is enough integrity, and coherence, to catalyze social interactions.

Information, static media and bureaucracies

Currencies are not physical things. They are not bills, coins, stamps, or degrees. Instead, currencies are just information. Information backed by a regulatory system of some kind that establishes rules for what the information means and ensures its integrity. Bills, coins, stamps, and degrees embody, or tokenize, this particular kind of information. Because currencies are just information, the medium in which the information exists plays a critical role in how the currency systems operate.

Until the introduction of electronics and digital information, we’ve had to encode information on physical surfaces, like paper. When information is bound to a physical surface, specific forms of regulatory structures are necessary to protect its integrity and ensure that fraudulent/invalid information can be detected.

A token of certain surface-bound information (meaning the patterns making up the information is inseparable from the material that holds the patterns — like the fabric of the bill) backed by an institutional system of integrity, the Bank of Canada (Image source: Canada Guide)

Historically, these regulatory structures have been human-based, especially in the form of institutional bureaucracies like national reserves. Bureaucracies encode the rules of validating information (currencies) in the structure of the organization and through processes of checks and balances that ultimately rely on human judgment. Although bureaucratic institutions get a lot of criticism for how slowly they make decisions, it’s a necessary pace for these structures to properly process information within the operating constraints of such structures.

From an information processing, or computational, perspective, a bureaucracy can be thought of as a system that performs logical analyses of information. Whether it is ensuring that a bank note or a degree is not counterfeit, or that money was obtained legally (not stolen), ultimately it comes down to making a decision regarding the legitimacy of some piece of information based on the encompassing rules. Because this process is so rigorous, we can trust the outcomes of their operations/computations.

Bureaucracies have been an amazing development for safeguarding the integrity of static, surface-bound information. In theory, they are set up to minimize the amount of human error and bad actors within a society. However, because of their strong reliance on individual human judgment (which often occurs behind closed doors), they aren’t without flaws. They are still susceptible to influence by powerful entities with their own priorities over those of society at large. These flaws can compound over many generations, eventually leading to a point where these systems end up better serving private interests over the public good. We see this with our monetary structures, which clearly benefit the wealthiest tier of society the most, and with our educational institutions, which better serve economic and administrative interests over effectively teaching younger generations to meet the educational demands of the modern world.

These are difficult power dynamics to avoid when we need systems to ensure the integrity of static, surface-bound information. However, we now have a very different kind of information medium: networked computers (e.g. the internet) which communicate through algorithms.

Networked computers and the algorithmic medium

This algorithmic medium is fundamentally different from static-surface media: it offers completely novel ways of manipulating, storing, transporting and validating information. Again, because currencies are just information, the internet enables completely new kinds of currency systems to exist since the information making up these currencies can be manipulated in novel ways.

Information can now exist as electrical patterns manipulated by computer hardware, completely decoupled from the displaying surface — our screens (Image source: Photo by Miguel Á. Padriñán from Pexels)

The digital transformation has occurred so swiftly that we haven’t even had the time to assess its true potential. For the most part, we’ve simply imposed legacy paradigms on this new medium, creating unnecessary limitations. Holochain is one of those projects which offers a wholly new paradigm for safeguarding the integrity of digital information.

At a high level, Holochain is an information processing system (a distributed software program) capable of validating the integrity of information according to predefined rules. What this means is, in many situations, the historical role of bureaucratic institutions (or centralized database administrators) can be replaced by distributed computational networks running Holochain code. Holochain is not a perfect system and consequently makes certain assumptions for it to operate successfully. One of which assumes that enough computers in the network are acting in good faith on behalf of independently acting people. On the other hand, this is quite similar to our assumption that enough members of a bureaucratic institution are working in good faith on behalf of the public (except the behaviour of code may be slightly more consistent than the behaviour of people).

A significant difference between a Holochain network and a bureaucracy, however, is that all participants (i.e. people running a Holochain application on their device) contribute to the validation of information integrity, rather than a small select group of representational bureaucrats. This kind of architecture makes the system much more resilient to outside influence. It fully distributes the governance among all the participants, rather than relying on a tiny fraction of the population.

Another fundamental difference is regarding how the authenticity of information is determined. In the world of bureaucracies, a “stamp of authenticity” is provided by some institution (like the Royal Mint of Canada) which provides certainty to the extent people trust such an institution. On the other hand, decentralized cryptographic information networks rely on the objectivity of mathematics (specifically public key cryptography) to ensure the authenticity of information. Each individual is empowered to, with the assistance of their personal computer, assess whether the math checks out instead of having to rely on the judgment of an institution.

Rigid borders and dynamic membranes

The lipid membrane of a cell wall. Membranes are a fundamental feature of biological systems. How can we apply similar principles to social membranes? (Image source: vecteezy)

Another benefit that Holochain-based computational networks provide over bureaucracies (as well as centralized cloud infrastructure and blockchains), is their ability to dynamically adjust the amount of resources necessary for serving all participants within a social system. Because a Holochain network is made up of only the devices of participants, the available resources are always perfectly matched with the size of the network. Bureaucracies are quite rigid when it comes to dynamically scaling the amount of resources necessary to ensure integrity of information. Rather than have arbitrary social context borders, like nation-states or universities do, within a Holochain-based network the scale of a set of rules and information would fit the natural social context in which that information is being used.

For instance, national currencies are only valid within the arbitrary borders of the encompassing nation. This scale is quite rigid: if people in other parts of the world wanted to use Canadian dollars, the Canadian government couldn’t expand to ensure fair and valid participation. Likewise, we see similar patterns of arbitrary borders (or membranes) in the university setting. For example, certain credits obtained at one school might not transfer to another one, or a degree may not be recognized in different countries. A university is unable to adjust its scope and thus its currencies are restricted to arbitrary borders, rather than adjusting to the demand for legitimate participation in these currency systems.

On the other hand, Holochain opens the door for radically more participatory and inclusive currency systems. As long as you have a network connected device, you can become part of many currency systems, mutually validating information with everyone else. Through the very act of participating in the network, you are offering computational resources, enabling the membrane of the system to naturally expand regardless of borders.

Fractal patterns can be observed all throughout nature. Holochain allows for fractal social networks/membranes.

Catalyzing social coherence

If you’ve managed to follow what I’ve outlined above, it becomes clear that the potential effect that broadscale implementation of Holochain (or Holochain-like systems) will have in the world is profoundly radical. For so much of human history, we’ve relied on institutional bureaucracies to ensure the integrity of information (particularly currencies). These kinds of structures have been so deeply integrated into society that we hardly think about the underlying reasons why we take them seriously in the first place.

Peeling back the layers, though, we see that it fundamentally comes down to systems that enable people to trust the integrity of information. Once enough of us realize that so long as we can trust the integrity of information we rely on to coordinate our action, we can securely use fully distributed digital currencies in a vast number of social contexts while avoiding some of the power asymmetries of centralized institutions.

Let me put the significance of these implications another way: Holochain provides the infrastructure for systems of trust to ensure integrity in social interactions without the overhead of forming immense bureaucracies. Not only can Holochain help avoid unnecessary corruption from compounding over time, it can radically accelerate the formation of novel systems of coherent social interactions at all scales. Quite simply, fully participatory computational networks with dynamically scalable membranes will be much more convenient for ensuring informational integrity than slow representative bureaucracies with rigid borders.

It’s likely that, over time, more of our collective social behaviour will be shaped by Holochain systems for the simple reason that they have less social friction. Holochain becomes the path of least resistance for social coherence. It’s possible that we will see an explosion of new kinds of social interactions unlike anything we’ve ever seen before. This is where thinking about Holochain really starts to seem like a new kind of grammatic capacity that will catalyze evolution of the complex adaptive systems known as human civilization.

Just imagine the kinds of interactions that could be possible. How will the employment landscape change when completely new systems of indicating knowledge and competence become possible? What kind of markers will we trust as accurate indicators of someone’s reputation? What kind of interactions will this enable? How will this impact our own extrinsic and intrinsic motivations, and thus our choices, actions, and resulting life directions?

Likewise, how will our value creation systems change when we have new methods of measuring and transferring value between individuals and society? What kinds of markers will we trust as accurate indicators of value? How will these shape the way people coordinate?

Ultimately, it seems that scalable social coherence supportive of open societies is about making sure we have systematic ways for ensuring our efforts in society are recognized by others and that the value we contribute is reciprocated in some fair and meaningful way. Holochain can support these kinds of systems in ways more suitable to the world of the 21st century.

In Conclusion: embracing novel paradigms

As we’ve explored above, open societies are in serious threat of our increasingly powerful exponential technologies and all the subsequent existential risks they pose. Effective solutions will need to match this scale of novelty and complexity. Unfortunately, our legacy paradigms are inadequate to the task and are breaking down quickly. In order to perpetuate open societies into the 21st century, we need new paradigms that can lead to emergent order at all scales.

Some of the ideas we’ve discussed throughout this series work towards this aim, but are far from the whole picture. Undoubtedly, there are many key details that have been left out. There are certainly gaps in the way The MetaCurrency Project has defined currencies and flaws in the theoretical models used. Additionally, Holochain is far from a silver bullet. However, at the very least, all of this work is important for the very reason that it challenges our perceptions and gets us thinking deeply about what new paradigms for social coordination may look like. I hope this series has served as an invitation to this end, as writing it certainly has.

If we want cryptocurrencies to change the world for the better we need to think deeply about what currencies are and what purpose they have served throughout history. This kind of thinking can help inform what purpose we want currencies to serve now and in the future. As pointed out in this article, currencies could serve as tools for strengthening open societies and facilitating emergent order. More broadly, they could potentially even catalyze the continued evolution of complex adaptive systems on Earth.

It’s time for the crypto community to get much more creative and thoughtful than the current blockchain industry and truly work towards enabling novel patterns of social behaviour in service of open societies. We hope you’re on board.

Until next time.

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Curious to learn more — or eager to engage in this conversation? Connect with us via holonode@livingsystemsnetwork.ca

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Living Systems Network is a collective working together to advance regenerative culture practices such as peer-to-peer governance and commons stewardship. We both draw inspiration from observing living systems, and model our evolution on living systems principles.

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Wesley Finck

Wesley Finck

Interested in novel patterns of social organization, biomimetic computing architectures (like Ceptr & holochain) and many other mind-warping paradigms.

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