Author: Murtaza
Compiled by: TechFlow
Some say that the scale of the Internet revolution is so huge that it is difficult for human society to fully evaluate its pros and cons. However, personally, the Internet is indeed very beneficial to me. The advantages of intermediation, equality, and connection that it promises have been fully reflected in my life. Even if the Internet occasionally brings some minor problems or annoyances, they are really insignificant compared to these advantages.
Therefore, whenever I hear about someone designing a new extension or improvement for the digital world, my first reaction is always: great! This was also my reaction when I first learned about technologies such as Bitcoin, smart contracts, and blockchain. These technologies quickly captured my interest and passion many years ago. As an "outsider" in my field, like many Silicon Valley people, I was one of the journalists who covered the Edward Snowden incident in the 2010s, which gave me some libertarian tendencies and made me more enthusiastic about these technologies. I quickly became an "evangelist" for blockchain and successfully brought many people on board.
For reasons I will elaborate on later and that are relevant to this article, I have stopped being an enthusiastic promoter of cryptocurrency and blockchain to others. While I still follow the industry and have even experimented with some blockchain-based platforms, I find myself more skeptical of the industry’s promise than I was a few years ago.
Still, I keep an open mind. That’s why I recently read Chris Dixon’s Read, Write Own. Aside from the book’s intriguing cover, I found it to be a commendable effort to reinvigorate the promise of a technology that shouldn’t be so controversial. Dixon’s book also touches on an important debate that will determine whether blockchain can save the internet from centralization, censorship, and corporate control, or exacerbate those problems.
Casinos, Computers, and Counterculture
I estimate I’ve read about 18 or 20 books on cryptocurrency and blockchain over the past few years. While some of those books have been helpful, I’ve grown tired of the hyperbole, hubris, empty speculation, and ideological extremism so common in the space. In contrast, Read, Write, Own is a sober, professional work. Dixon is a lucid author and someone who clearly understands and cares about the internet.
Read, Write, Own briefly reviews the history of the internet and its evolution from protocols to platforms, then focuses on the problems of corporate control today and how blockchains can potentially solve them. Dixon offers a searing critique of Big Tech’s exploitative “take rates” and the undemocratic nature of our current digital world, which has turned most of us into sharecroppers in content farms.
He also offers some critiques of the existing cryptocurrency industry, and in the process he touches on what I believe are the core issues facing this technology and its future prospects.
As Dixon puts it, blockchain is currently divided into the realms of “casinos” and “computers,” a metaphor I’ll return to later. The casino refers to the speculative world that cryptocurrency has become almost synonymous with in the public mind, while the computer represents its underlying technology and its promise to build a better internet.
Dixon’s book is for “computer” geeks. He writes with palpable enthusiasm about his love of the Internet — an enthusiasm I happen to share — while recalling a time when passionate nerds worked in garages to improve their gadgets. Dixon paints blockchain developers as revolutionary outsiders, and drawing on past rags-to-riches genius stories, he invites us to imagine:
"Imagine a counterculture-loving twenty-something Steve Jobs attending the Homebrew Computer Club, a gathering of microcomputer enthusiasts that held monthly meetups in California in the 1970s. Imagine Linus Torvalds as a student at the University of Helsinki in 1991, writing a personal project that would eventually become his eponymous Linux operating system. Or imagine Larry Page and Sergey Brin dropping out of Stanford and moving to a garage in Menlo Park in 1998 to turn their web link directory project, BackRub, into Google."
This is the world of PC culture, while FTX and those dubious Bitcoin influencers most of us are familiar with represent casino culture. “PC culture is long-term, while casino culture is not,” Dixon wrote. “Thus, it is the PC and the casino that are vying for the narrative that defines this software movement.”
While he correctly points out a fundamental conflict, I think the problem is far more complex than Dixon describes. Blockchain technology itself is still in the garage inventor stage. However, from an economic valuation perspective, it has already moved beyond this stage prematurely.
As of now, the global cryptocurrency industry has a market capitalization of over $2 trillion. Usually, industries of this size are formed after something useful to society has already been developed. In this case, however, the wealth comes first, while actual utility still relies on vague promises of the future. With a few commendable exceptions like stablecoins, the money is currently being used to build a vast global casino and a tool to circumvent capital controls, accompanied by an endless stream of alluring promises and motivational stories that reads like a book on Narrative Economics.
In my view, this unusual sequence, where wealth comes long before usefulness, is not just a minor bug that will correct itself over time. It actually poses a mortal threat to the technology’s ability to realize its potential.
Do no evil, yet already do evil
Google once had a famous corporate slogan: "Don't be evil." Although the phrase was somewhat tongue-in-cheek, it also acknowledged that great power and wealth naturally give rise to moral hazards, which can lead to behavior that is contrary to the public interest. Eventually, Google changed the slogan and its company name, perhaps because when growing into such a large economy, some unethical behavior seems to be an inevitable byproduct.
Dixon sees blockchain as a technology that can prevent big tech companies from going evil in the future. He writes: “Blockchain networks turn ‘don’t be evil’ into ‘can’t be evil.’ Their architecture provides strong guarantees that their data and code will always remain open and recombinable.”
He describes how corporate platforms inevitably enter an “extraction” phase, where they begin to extract as much economic benefit as possible from their users, to the detriment of the platform as a whole. He makes a powerful point that if Twitter and Facebook operated as protocols, similar to email, or as blockchain-based services, no greedy CEO would be able to turn them against their users.
However, while the technology itself is neutral, Dixon’s reference to the “evil” of corporations reminds me of an important problem with the blockchain and cryptocurrency industry: it already exhibits evil traits.
The cryptocurrency industry has its own set of CEOs, investors, and venture capitalists, many of whom have made vast fortunes from a technology whose usefulness is still unclear. While it has yet to positively revolutionize the world or the internet, the blockchain industry has been involved in many robber baron-like activities, such as lobbying politicians to obtain favorable policies, elite financial self-dealing, disastrous investor scandals, and other behaviors that are generally considered the worst of the corporate world.
There has also been a sharp rise in ransomware attacks using cryptocurrencies (many of which go unreported), which, while not a direct accusation against cryptocurrencies themselves, is on a much larger scale than the current crop of people using cryptocurrencies for noble purposes, like sending money to rural Congolese villages that have lost touch with Western Union.
So we face an uncomfortable reality: this industry became evil before it really worked. It’s no surprise, then, that the public has lost trust in it. Some might chalk up this hostility toward cryptocurrencies to Luddism, “political correctness,” or a raw resistance to progress, but I think it’s a rational and understandable reaction to the current situation.
Many blockchain developers try to downplay concerns about the status quo by claiming that the technology is still in its “early” stages, or that we are in “1999 of the Internet” (the year is always inconsistent). Fifteen years have passed since Bitcoin was first launched, and this argument no longer holds up in my opinion. The idea that technology has an inherent purpose and naturally progresses from one stage to another seems more like a religious belief than a rational analysis. Many great promises have failed to come true, which is actually a more common phenomenon in history.
Despite the blockchain industry’s enormous influence in finance and politics, it is estimated that only about 22,000 developers are actually working on blockchain projects. According to the latest statistics, this number is actually declining.
This doesn’t mean that blockchain technology is dead or hopeless, but it does suggest that the gap between the giant casino and the tiny computer may be wider than it appears. Those who support the casino are already funding elections and changing laws to suit their interests, while the computer remains idle in a garage somewhere.
Revolutionary suicide
I’ve heard similar arguments from blockchain gurus who often describe themselves as “inevitable,” as possessing unique knowledge, as persecuted opponents of an untrustworthy and corrupt establishment, and as potential anti-elites.
While covering the Syrian civil war, I heard opposition leaders, many of them wealthy and globally connected, deliver powerful critiques of the regime they were trying to overthrow. The regime was indeed bad, and early in the war, the opposition seemed to have a winning case. However, things did not go as expected. Unfortunately, in part due to the inability of the rebels to govern themselves and establish attractive governance under their control, most people ultimately chose to support their familiar demons. The regime change that many thought was inevitable in 2011 did not actually occur. Many unfinished revolutions have suffered such a fate.
If the Syrian opposition had been more rigorous in its self-reflection, things might have been different, as is true for any human enterprise. I’ve been waiting for some serious self-criticism from the cryptocurrency industry, whose culture seems more like optimistic corporate propaganda mixed with the anticipation of ecstasy and other religious sentiments that seem to accompany the birth of a new type of currency.
Cryptocurrency was seen as a revolutionary technology when it was introduced, but that revolution seems to have been corrupted. The lack of accountability and exploitation of loopholes by many of its existing proponents has alienated the public and led them back to the establishment they were hoping to overthrow. Even after witnessing the behavior of many of the new authorities, I have a slightly better impression of the New York Times and Chase Bank that I didn’t have before.
A doctor should first treat himself
You might call me a critic for these pointed comments (indeed, I’ve been called a “pawn of the establishment” by someone who I estimate has a net worth 800 to 1,200 times greater than mine). But ultimately, I write this for the benefit of the people who use Farcaster on the Paragraph, a platform that I hope to help grow. I don’t hate cryptocurrencies or blockchains, and I even dabble in them occasionally. I love the internet in general and have been impressed by some of Silicon Valley’s past innovations. I just wish the industry could live up to the grandiose promises it keeps making.
We are dealing with crypto like a terminally ill patient who needs strong and painful treatment to recover. Responsible regulation is inevitable, but we also need to consider its impact. For the technology to continue to develop, the speculative elements must be drastically reduced or even completely shut down.
As someone who holds a small amount of cryptocurrency, I hate to say this, but in the long run, the future of blockchain may be better if its current $2 trillion market value is cut by 80-90% in the short term, whether through regulation or industry self-discipline. Such a reduction will help to clear out the scammers and opportunists who gather around casinos, both online and offline, and return the public space to those technology developers who are truly committed to the noble vision of "Read, Write, Own". This also provides an opportunity for the public to re-understand blockchain in a more pragmatic way.
Such a prospect may not be welcomed by those who have already become wealthy through cryptocurrencies, or those who seek to justify their wealth through various political means. But if anyone really values the lofty ideals of decentralization, disintermediation, and anti-censorship, then the casino hustle and bustle needs to be put on hold until the technology can create something valuable for society.
We all want to achieve big goals, and there’s nothing shameful about that, but to achieve those goals you need to first build the tools to get you there.
