In 1620 the Pilgrim Fathers abandoned an old world riddled with political corruption, economic stagnation, byzantine regulation, onerous taxes, and exploding government debt and set off to the New World. The rest, to coin an overused phrase, is history. By creating an entirely new settlement and throwing off the old paradigm in its entirety they freed not only themselves but also rescued the Old World, which gained a new lease of life from trade with the newly created settlements.
I envisage the crypto-currency world as just such a new world – except that this time the New World is digital and virtual. So there is no need to cross the ocean in a wooden ship, risking life and limb in order to escape the King. You just have to cross the mental ocean in your mind – and unshackle yourself from the imaginary constraints of the existing system.
Recently I have written about the emergent phenomenon that is the Decentralized Autonomous Organization, or DAO. This is a new virtual company that has captured the imagination of the global crypto-currency community. While most of the world is still grappling with the blockchain and how Bitcoin works, the crypto-currency world’s ‘early adopters’ have begun piling into Ethereum. This protocol is an evolutional step-change beyond Bitcoin in that it includes a new programming language that enables the creation of applications, such as ‘smart contracts’ where code can dictate how and when digital assets are transferred from one counterparty to another – impervious to human influence or coercion.
The DAO is an exciting experiment because it may soon force us to re-think the entire concept of what a company is. It has no management, directors or employees – just a few lines of open-source code that allow it to hold money and disburse it in accordance with the pre-agreed wishes of its creators. Everyone can see that it exists, yet no one can turn it off or steal from it. Last month the first DAO was created, and raised over $130m in just four weeks.
There is no need to use political currencies to safeguard your capital when you can hold digital currencies – which would see an unprecedented rise in value if the fiat world implodes under the current, and similarly unprecedented, global credit expansion. Why invest in public markets that are irredeemably manipulated and where the price of money is artificially fixed by central banks when you can instead hold crypto-currencies and tokens in a DAO that answers only to market forces? There is no need to use expensive lawyers or politically flawed company structures: in the new world, code is law and the only thing that matters is possession of a private key.
In the New World we can posit that bitcoin is gold, ether (the ‘currency’ of Ethereum) is oil, and corporations are DAOs – so we already have money, natural resources and a legal system. In this construct the software is doing the labour(!) – so amongst the factors of production we are just missing land.
In this vein I have recently been exploring Urbit and other similar platforms that are a new take on how we think about servers and personal ownership of data. In the New World construct I have outlined, Urbit is seeking to be ‘digital land.’ The idea, as I have understood it, expressed in very simple terms, is that we need a digital place to live as free individuals in the New World. In its own words “Urbit is designed to become a digital republic: a network of individually owned nodes with no central point of control. Like a well-planned city, the friendly network is decentralized but connected, safe but free.”
The existing digital framework of the Old World reflects its panopticon-like orientation: the constant attempts to spy and control the thoughts and feelings of individual users (e.g. Facebook’s ‘mood control’ experiments), the relentless quest to shape the agenda and to compel us to borrow and spend on things we don’t need, and the ever present rent-seeking in every click.
So innovations like Urbit and Ethereum all appear to be pursuing a similar idea in slightly different ways – the idea of digital freedom, or private ‘digital land’ ownership. We should own our own digital space just as we own our own homes – it should be a place where we feel safe and where our digital thoughts are private. Maidsafe, a peer-to-peer data storage project, has created its own token for use in its decentralized network (Safecoin) whilst Urbit seems to be planning to sell ‘digital land’ – enabling enterprising settlers to stake their claim in a digital ‘city in the sky’.
This may seem far-fetched and somewhat akin to creating a virtual world like Second Life – however, there is a subtle but key distinction: if we cross the mental ocean and are prepared to rearrange our resources to align with the New World, as opposed to wasting our time trying to fit in with the Old, then this becomes real life. There is no need to come back to the ‘real’ world as the ‘real’ world will be far poorer and more disorganised than the digital world – a historical simile can be Southern Europe in the early to mid 20th century: Americans settlers returning to their homeland must have been astonished at the utterly primitive arrangements and the poverty that had survived in the Old World.
If humanity can cross its mental ocean then the ‘real world’ we experience today, the Old World, will steadily lose its mortgage over human ingenuity and concurrently its ability to harvest and restrict individual thought and human action. Just as the settlers never looked back at the Old World and never asked for permission to build a New World, so we also should stop looking back and seeking approval to make the change.
Adam Cleary is an entrepreneur, digital currency investor and investment manager. His company, Cavenham Capital Limited, advises investors on digital currency investment and innovation.