Ecological Sanity Is Compatible With Human Freedom

In the early days, Bitcoin proposed a simple model of how the world could be transformed: The free market was going to produce inflation-proof money with strong privacy features, which could be used to avoid taxes. Over time, people would sell their dollars, replace them with cryptocurrency and the State would wither away to be replaced with an anarchic paradise.

That was one Bitcoin theory of change. It seems improbable now, as it did before, despite the current risk of game-changing inflation in America. The ship may be going down, and Bitcoin may be a life-raft for some (as it is in Venezuela), but the collapse was not caused by Bitcoin. It was caused by good old-fashioned mismanagement over decades. 

Bitcoin is an evolution. Even if it cannot replace the state, it has spurred a clandestine movement of believers. The next Bitcoin “theory of change” was remittances, banking the unbanked and creating economic opportunity at the bottom of the pyramid. Through the miracle of the blockchain, transaction costs could be slashed, allowing dollar-a-day laborers everywhere to start businesses with a $40 loan. 

Progress has been slow. Know your customer (KYC) and currency controls weigh like an albatross around all efforts to bank the unbanked or diminish the state. Now it’s a little less clear how precisely blockchain will make a difference to our long-term planetary outcomes.

Still, given the waste and excess in society, it’s never been clearer how much the world needs cryptographic transparency. So what is our theory of change? How are we really going to get a better world out of all this exquisite technology?

Seeing the present

A senior military thinker I used to work for described the four phases of history thus: “boom, bust, protectionism, war” with an option to go from bust back to boom by radical economic reorganization. But even this cycle is running out of room: the weapons grow ever more devastating, and we’re losing  climatic stability, and that means eventually running short of food. 

If you want a world that has both liberty and enough to eat, you’d better put your thinking cap on. (Elon Musk is building those space ships for a reason.) We need solutions to multiple problems simultaneously. We need an elegant economy of action before impotent regulators and short-sighted markets ruin our world permanently. 

My theory of change is to take the database state seriously and do what it is good at – tracking – and kick it into high gear. Solving the climate crisis and mitigating the ill effects of the state means making everything in the material world transparent. 

Ecological sanity is compatible with human freedom, but only if we deploy cryptography to manage the resource allocation.

So we make matter a first-class actor in the global economy, and handle matter as carefully as we handle money. 

Money, other than small change down the back of the couch, never just vanishes. Every penny created is tracked over its entire lifetime, and this is doubly true for a satoshi. We regard money as sacred. 

Matter, on the other hand, is anonymous: As soon as you throw away that paper cup, it’s anonymous. Burners call this “moop,” short for “matter out of place.” We are literally drowning in moop: carbon dioxide, microplastics, endocrine disruptors, neonicotinoid pesticides. They go into the environment and they go into our bodies. 

We trust regulators to protect us, but we can do much better than this. 

Fixing the future

We have to get consumption down and efficiency up. First World lifestyles are producing around twice the sustainable level of carbon dioxide. Meanwhile, approximately 10% of humans live with permanent hunger. People like to say poverty is declining everywhere, but so, too, is middle class and working class dignity eroding.

People will bluff and bluster on all of this. Some will say “technology will fix everything,” others that we need some kind of mass spiritual awakening.

No. We need a revolution on par with the invention of money, the invention of financial instruments like stocks and insurance, the ongoing transfer of power to democracies around the world as enfranchisement spreads. Revolution need not imply smoke, fire and blood running down the streets. It simply means a change in how things are done at the most basic level.

We need to apply the same kind of precise thinking that we do about money to everything else. We have the computing power! Why should matter remain anonymous? 

Sharing data is often against people’s commercial or personal interests, but that’s what cryptography is for: selective disclosure at managed cost.

The trick here is agency: If this database sits with Amazon or eBay, it’s the same problem as having your money sit in a bank that somebody else controls, or having your medical records locked to your health-care provider. If we want more meaningful agency, even sovereignty, in our lives, we have to be in charge of our own data, and able to regulate what algorithms see our data.

Blockchain is the missing technology in the transition to treating our matter as respectfully as our money. We have to build a more free society while being more data-driven and efficient than ever. So, we need to make sure that we own our own data, and that cryptography veils it in transit and at work.

For many of the hardest problems we face, and I’m thinking mainly about ecology and modern slavery, technology only makes solutions possible: without the technology, we are stuck with the problem. But with the technology, we still have to do the work and share the pain of solving the problem. 

Our freedom rests on our ability to use technology to dig our way out of this hole: to increase our options by creating and deploying new supply-side technologies to create clean energy, and by radically re-engineering the demand side to hit our necessary consumption limits.

The creativity of the market economy works, but instead of mere “price signaling” we need high-quality, multidimensional data so we can run a multidimensional market: money, carbon, other forms of impact, all inside of a single global budget, with infinite room for human creativity to prove we met our targets and live as well as we are able.

Neither utopian nor dystopian, this is reality: You have markets, or you have authoritarianism. Carbon is a new constraint, and we either handle it like money and instrument well enough for creative response or face a future of blundering mandates.

Ecological sanity is compatible with human freedom, but only if we deploy cryptography to manage the resource allocation. My hope is that, by 2030, these systems will be ready in  enough countries that they’ll become standardized across the world, and we can go on together.