Blockchain, Coopetition, and Aligning Incentives in the Emerging Economy
Part 2 of Unshrugging Atlas, an interview series with SingularDTV CFO Arie Levy Cohen about decentralization and the shifting landscape of tech and business.
As our world continues to veer further towards new paradigms in fields ranging from politics to finance to socializing, it’s imperative that we begin to approach the perspectives and values that will define this fast emerging era of development. The economic and incentive models unlocked by blockchain projects around the world carry not only major implications in terms of the digitization of value or decentralized systems, but should also influence the nature of the way we cooperate.
Blockchain and the Ethereum developer ecosystem in particular have often exemplified the positive elements of coopetition, the notion that a community has more to gain in cooperating in the short term to establish a platform upon which they may all healthily compete later on. Coopetition has long been evident in the tech space since the inception of Linux and the open source movement, but can also be found in institutional settings around the world. According to Arie Levy-Cohen, CFO of Singular DTV: “Coopetition is required, so that all of the best minds can come together to create a brand new economy around what actually unites people.”
In Part 1 of Unshrugging Atlas, an interview series with Levy-Cohen, we laid out the central tenets of coopetition and how it relates to SingularDTV’s mission of creating a decentralized entertainment economy. In part 2, we go deeper into how individuals and teams can go about manifesting coopetition in practice, and take a bird’s eye view of the macro processes underway in the global economic and geopolitical landscape that make the present such a critical moment for humanity as a whole…
Is there any specific individual or project that you think exemplifies coopetition and what it can achieve well?
Coopetition is the art of understanding the disruptive nature of a technology when shared by a group of those who will actually leverage and implement its impact. If you look at someone like Joseph Lubin, you will see him as a founder of the Ethereum protocol and the Ethereum Foundation. He invested a lot of his time in helping that come to life. It was pretty revolutionary at the time. When Ethereum’s development came to pass, he had a library and a language with which he could build a lot of things, and he also had a community. You need a lot of people to come together to realize that cooperating right now so that something like Ethereum can be born is in all of our best interests.
Cooperating first means that you can compete later to build the best applications on top of it. That mentality is at the heart of what we do with blockchain. We bring the cooperative to the table in order to deliver that which will enable the competitive landscape to emerge. This isn’t an entirely novel concept. It’s evident in industries all over the world, from insurance companies to Linux.
How does this relate to the discussion of open source technology vs. proprietary solutions?
I think you need both. Open source has been a very powerful mechanism in bringing people a truthful environment in which they can cooperatively build things that would have otherwise taken a lot more money to deliver. Open source makes the product more resilient, more malleable, it can be bifurcated, it can be pulled in many directions. If done right, kind of the way Linux has done and Makerbot did in the early days, and in the way the Ethereum protocol is still doing, I think that open source has a lot of value. It goes to show you that coopetition has a deep-rooted impact in the way we do things in blockchain.
I think open source allows for a certain type of community to create a groundswell and a type of resilience that paves the road for some more proprietary interpretations, iterations, and/or applications or instances in which you can instantiate some of those free, open source concepts. The idea is that the open source protocol nature is kind of like a language, or the metric system. I don’t think that should belong to anyone. But anyone who can use those tools to create something new and unique that actually helps people with something, that can be proprietary.
How do you bring people to the perspective of coopetition in day-to-day interactions?
It’s a challenge! It’s something that can only be best done with those who are in the technology space, because they’re used to it. Academia, I think, has a similar culture. It’s not normal for people in the world of business to cooperate first in order to compete later. Every opportunity is a different challenge. I think you need to understand what everybody’s interests are first. What do they want? What do they need? When you know that, you have a basic, limbic, fundamental understanding of their motives. That helps you understand what you can bring to the table to ameliorate those needs. When you can do that, it’s possible to connect and take the initiative to find a route to cooperation.
It’s similar to prisoner’s dilemma, someone has to make the first step towards the altruistic perspective. There are big elemental changes that warrant a cooperative period — from alternating current electrical grids to the internet — and blockchain right now is providing those opportunities. Blockchain is allowing us to realize that we are the value. When we realize that, it changes the tenor to something that can be more cooperative. If there’s no racetrack, it doesn’t matter how well built your Formula 1 car is. Right now in blockchain, we’re all building those cars while cooperating on building the racetrack at the same time.
How does the alignment of incentives influence the structure of SingularDTV?
As it relates to SingularDTV, we have to figure in who all the economic participants are who stand to benefit from a platform that enables artistic freedom and independence, whether it is financial, economic, political, marketing, tax, or identity. SingularDTV is made up of modules. Each module that is conceived at SingularDTV is built to fulfil a deliverable for the benefit of the artist, the creator, and their communities. The creator sits at the center of the SingularDTV ecosystem, and the alignment of incentives brings the marketplace to them so that the traditional deliverables are provided, but instead of around an economy, it’s around an interest. In our case, it’s around the interest of film, music, and entertainment.
We believe that economies will be built around people’s interests instead of around counties or localities. By doing that, you allow the alignment of interests to fit around those who produce and consume the goods and services in each of those economic interests.
From a higher-level perspective, what are the processes that are bringing these changes within reach?
The alignment of incentives in this particular moment for us in the world has a lot to do with the megacycle. The megacycles that are ending at this moment are all ending as part of a mega-macro-cycle that has been occurring for centuries: The vast majority of the people in the world have lost faith in their governments and the democratic process, the movement from paper money to digitized assets, the public sector being eroded in favor of private, the axes and hegemonies of the world shifting, fossil fuel supply dwindling, social engagement with society becoming digitized. It’s a unique moment in history. All of these cycles are nearing their end at the time that blockchain and cryptocurrencies are rising, giving rise to the opportunity for an immutable, mutualized, synchronized, single, golden source of truth ledger of debits and credits, which is what will inherit financial systems of the future.