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Blockchain, money, and value
08 Mar 2023
Hawoo everyone!
As a years long denizen of the metaverse (NeosVR, VRChat, etc), plus general futurist/transhumanist-inclined Oxford graduate, I have stumbled on conversations about blockchain many times, from very varied people: from economy professors, computer science students, web3 founders, to other denicens of Social VR platforms and so-called metaverses. I thought I would share here some of my insights/thoughts, with the hope that they may be found useful by some, and with the underlaying hope of creating more common understanding by all.
Let’s dig a bit into the reactions people have about blockchain. Some common ones are:
- People associate blockchain with scammers
- Some argue that “you don’t need blockchain” because “there are better ways to achieve the thing” or at least “other ways may be just as good so why use this”
- Some swear by all its promisses, and consider deniers to be short-sighted.
- Some just want to make money
- Some just don’t find it interesting.
What is going on really? I think that most of the arguments are just rationalizations of two underlaying knee-jerk reactions:
- you find money and monetization attractive
- you are suspicious of anything that involves money and monetization
Let’s explore these two profiles, in a classical thesis-antithesis-synthesis framework.
Thesis: I find money and monetization attractive
I think this stems from a belief that money and monetization are deeply fundamental to a functioning and flourishing society. Money and monetization are tied with contepts of ownership and personal liberty, which are corner stones of a good and advancing society.
People feel like they are being abused if they don’t have control over their property, if they can’t receive fair compensation for their work, etc. So money and monetization feels like a thing we must have, as important as freedom and personal dignity.
Antithesis: I find money and monetization suspicious/unattractive
I think this stems from the belief that money and monetization are just tools to refer to real valuable stuff and on themselves are worthless. This belief is combined with the belief that people who are “obsessed” with money have probably lost sight of the true value of things – they have confused the symbol with the referent. When you spend more time thinking about the proxy of value, you are automatically spending less time thinking about the valuable thing itself, thus money-obssesed people lose track of what’s valuable and may thus engage in behavior that is not that well algined with our “real values”, e.g. speculation, or even scamming and corruption.
Sometimes it feels like people driven by speculation take pride on the fact that they dont focus on value. Or else, how can we explain that the most popular NFTs are the ones universally agreed to be uggly (like the bored apes), or how most blockchain metaverses seem to show themselves as low-poly shitty-looking graphics. It sometimes feels like they are reveling in a counter-aesthetic that shows their belief in the arbitrariness of content, and the power of norms, or something – or maybe they just wanna be different to be rebelious. The result though is that as soon as anyone removes the norms/narrative, there’s no attractiveness left, beause it’s not tapping into more fundamental values, the ones that are more deeply rooted in the brain, and that cant be removed as easily as some speculative trend, norm, or meme.
Synthesis: Money and monetization are very useful but we shouldn’t lose sight of real values
This synthesis is a natural one. People starting from either extreme reaction will often converge to this without noticing it. Let’s see how this has been happening starting from either side.
Arriving at the synthesis from the antithesis
I think VRChat offers a great case study. Why does the VRChat community love VRChat so much? Because it’s so authentic, so genuine. It honestly gives me chills. When you start a platform without any monetization, just like early-stage open source projects, what you get is a labour of love – an expression of the purest human values, without any abstraction layers – what users built in VRChat was what they really felt like building deep down. This is extremely attractive. And you can see it. You can go around VRChat and find memes, funny references, and tons, TONS, of pictures of memories of people just being human (or trans-human, or whatever) together. Only in VRChat – as of today – do you frequently stumble upon worlds like a little shrine with messages from people in a Japanese study group telling their stories and how grateful they are of the community, or get events with 15K attendants without any sponsor, and with money raised for charity, or get clubbing events going every night, with underdog DJs starting their career out of pure love, all for free. Last weekend I was at the Sunday service event in VRChat. This is a little church made by a member of some furry community. The thing that stroke me the most however were the walls. They were covered to the brim with stickers and decorations. The thing is that I recognized some of these. Each of these little symbols represented an idea (e.g. trans rights) or a communiy (e.g. Floof Doof). Every literal square meter of the walls in this place was tingligng with meaning – and I found that beautiful and moving.
Whsprs performing at Sunday Service
And this is just a tiny glimpse of it – the amount of real human stories taking place in platforms like VRChat, NeosVR, and other platforms could fill many movies (there was in fact a recent movie that I think is a great example - I watched We Met in Virtual Reality and it made me cry at several times~).
However, there’s another trend that I can’t help but notice going on. People made fun of the corporation in Ready Player One for wanting to fill the screenspace with ads. Well guess what’s the first thing you see, pretty much covering your field of view, the first time you enter some of the most popular VRChat worlds (like the Pug, or Midnight rooftop)?: tons of ads, stuck on the walls. These are offered at a price by the world creators to support themselves obviously. Some world creators also make some parts of their worlds VIP only (e.g. in Spirits of the Sea or Dreamwaves), so that you can only access them if you pay.
The Great Pug
Midnight rooftop
Somehow, the fact that this has emerged organically makes people less bothered than if this had been the norm since the beginning. If VRChat had offered ad spaces or “VIP worlds” you need to pay for, these would have been labelled as “invasive” and as “artificial scarcity”, I think. I think this isn’t totally unreasonable though. People only begin trusting the more abstract foundations of society, such as money, once the foundational valuable stuff has been stablished. Otherwise, one feels at risk of it being a scam or a speculative bubble.
This doesn’t change the fact that, eventually, as a platform and community grows, money and monetization are found increasingly useful. Turns out that money is a very useful tool to coordinate among very large numbers of people. Furthermore, the tools to make money work are very non-trivial. As a community grows, these challenges become more and more apparent, and it’s in fact the foundation of a lot of work by a lot of smart and some well-intentioned people. One person which I think is pushing the frontiers of this knowledge (how to coordinate the largest numbers of people and make societies work) is Vitalik Buterin, the funder of Ethereum. And thus we arrive at the synthesis: money is useful, but needs to be based on real values.
Arriving at the synthesis from the thesis
Blockchain started with a bunch of hype periods related to revolutionizing the internet because of some abstract ideas around the notion of “trustlessness”. I remember being excited at the beginning of Ethereum (I was at what I believe was the first ever Ethereum hackathon back in 2015 – and yet I am not ritch cries in hindsight)
However, as I began to dig deeper into it – for example after a lecture by Proff Vili Lehdonvirta, I began to realize that my understanding of the value of this technology was shallow at best. It turned out that for any usecase of blockchain I could think of, there was other options available, sometimes better, sometimes neither better nor worse, but with different tradeoffs.
Honestly, I began leaving the field of blockchain, not out of convinction that it didn’t have value, but out of not being able to see the value. Recently, I began learning more about human behavioural sciences, game theory, and economy. I also met Eito Miyamura, president of the Oxford Blockchain society, who made me realize that the layers of abstraction behind the value of blockchain could run much deeper than I thought. Basically, in short, turns out that societies and large groups of people are extremely complex things, so it’s not too surprising that technologies designed to deal with them also work and produce value or not, in very complex ways, most of which we don’t fully understand.
Nevertheless, the question that was heard most often in the blockchain-related events I attended since 2015 was: “but what is it good for?”, “what’s the value?” And those are precisely the questions that remind people that money is just a tool, and not the root of value (for most of us – maybe there’s some exceptions in Wall Street). And thus we begin to approach the synthesis.
In the last few years, people in web3 (the newer rebranding of blockchain to focus less on one specific technology and more on a set of ideas and ideals), have stopped engaging in useless conversations about the workings of particular technology on very complex systems like societies, and have become a lot more pragmatic. People have started asking the fundamental question: “what do we actually want to do?” For that we’ve had to go back to the basics of value, and that’s why we’ve gotten things like DeSci, DeSoc, ReFi, etc. focusing on fundamental human values like science, community, and sustainability, rather than proxies or particular technologies. And thus we arrived at the synthesis: good stuff happens if u use money as a tool for actually valuable stuff.
DeFi, ReFi, DeSci as examples of more value-driven web3 initiatives (DeSoc is an even newer one)
Conclusion
The purpose of this post was to explain two very different perspectives around a set of recent developments on monetary and collaborative technology – namely blockchain and more recently other technologies in the web3 sphere (e.g. federated networks, zero-knowledge, quadratic voting, network states, metaverses, etc). I think these technologies are at the intersection of human values and large-scale coordination, and both of these are very complex topics, so it’s not surprising creating a common narrative is surprisingly hard. I hope this post has helped illustrate what I think are the two main clusters of opinions a bit. I also think, that while a lot is written on how technologies can help large-scale coordination (most of web3 literature for example), not enough thought is put on how technology can help bring forth human values – even though it certainly can, as I hope some of the stories above atest. I want to cite one of my favourite videos by the very thoughtful game designer Jonnathan blow which is one of the best discussions I’ve seen on this topic
An even bigger hope with this post is that a mutual understanding can help bring people closer together. I think the above stories show that there’s valuable and useful stuff to learn from all communities currently developing in the metaverse, and I think working together we have better chances to make awesome things happen. I want crypto-skeptics to take a look at some of the valuable stuff the web3 community is making (e.g. reading on network states, DeSci, fediverse, and checking out the writings of Vitalik, Allison Duettman and others), and I want crypto-enthusiasts to focus on the most valuable stuff and on actually making the world better for people, and to spend enough time thinking and pragmatically experimenting what that means. Ultimately, I want to help everyone learn more about different perspectives, so that we take wiser steps towards a beter world:>
