Every industry is prone to self-serving hyperbole and delusions of grandeur. Given the obvious incentives, this ought to be expected. However, when it comes to self-image, the tech industry is singularly narcissistic. In this regard, it truly is special. According to the self-proclaimed merchants of progress, every new technological meta represents a “fundamental breakthrough”, a “revolution”, or -- on a rare modest occasion -- at least a new “paradigm”. Of course, very few technologies actually amount to such, in the end. Most purported revolutions end up as little more than rhetoric, a flash in the pan of History; less iPhone than Blackberry. That’s why, for those who spend enough time near enough to the ground of invention -- i.e. tech Twitter -- a kind of soul-destroying techno-cynicism often develops. Just look at Kara Swisher.

Right now, we have at least two technologies that portend the possibility of a revolution, a new societal “common sense”, and their respective sub-industries aren’t shy about voicing the claim. Taking up most of the current oxygen in the room is, of course, AI, the technology that at once represents the next industrial revolution and the end of the human story entirely. In the shadow of this new Prometheus currently lurches “crypto”, a set of technologies that promise the future of finance and the Internet, respectively, together constituting the soon-to-be operating system of the nebulous but nevertheless emerging “metaverse”.

However, where crypto was an obviously important technology, the consensus future as of ~18 months ago, a confluence of events have cast doubt over its expected value, its place in our increasingly digital lives. What was once an inevitable crypto-centric future has thus become, in the minds of many, far less assured. In fact, not only has crypto simply lost favour outside it’s little bubble of highly-online believers -- that is, CT -- to much of the world, it’s already a failed experiment; “crypto… wasn’t that that thing with that SB-something dude?”. No matter how sympathetic you are to the cause, it ain’t pretty.

On the other hand, AI -- which at this point is almost synonymous with ChatGPT -- has captured the imagination of the world, and the dollars of investors, as the most fantastical notions of AGI have begun to seem distinctly lacking in ambition. The contrast couldn’t be more stark. Crypto is definitively out while AI is emphatically in, as even the most cursory engagement with MSM -- or a mere glance at the charts -- will inform you.

It’s against this backdrop -- this acknowledgement of tech’s often deluded sense of self-importance, and the current plight of crypto -- that I shall endeavour to make the claim that crypto is _in_fact a veritable revolution, a new “techno-economic paradigm”, as Perez puts it. More Internet than fax machine, as it were.

Before we get into it, though, it feels worth noting that the current difference in standing between crypto and AI can be reduced to the fact that one should require, in the first place, something of a forceful articulation to defend its legitimacy, whereas the other is already received wisdom, an irrefutably important technological artefact, consensus. Indeed, while crypto’s most basic value propositions require argumentation, the only legitimate arguments around AI, presently, are whether or not it’s a force so powerful it ought to be considered an existential threat. The human juxtaposition tells the story well enough: While Altman does his celebratory world press tour, Armstrong is preparing for court.

Much of this relative difference has to do with recent, contingent events -- the crypto bubble and then blow up of FTX / Terra Luna, the launch of new GPT models etc. -- but also simply where each of these technologies are in their respective maturation processes (AI is at least 70 years old, where crypto is little over 10). Yet, this is only part of the story. For underneath these superficial, contingent features of these two -- apparently competing -- technologies lies a fundamental difference; a difference that sharply demarcates the two industries, and that attracts and repels talent on the basis thereof. That difference, in a word, is complexity. Let me explain.

For all the technological complexity inherent to it, AI is a fundamentally simple technology. However lofty its aspirations, the objective of AI is perfectly straight-forward. Indeed, it’s right there in the name: artificial intelligence.

While the history of AI, as a discipline, has been characterised by fundamental, ultimately philosophical, debates re the nature of intelligence, it’s now clear enough that there isn’t anything uniquely privileged about carbon as a substrate for it. Silicon, it would seem, is a perfectly fine foundation, too. That is to say, intelligence doesn’t care what it’s made of; all that matters is that it’s situated in a medium capable of performing the requisite computations.

Although people are still quarrelling about terms, what were once genuinely interesting open questions --- i.e. “can machines really think?” -- have become highly academic, to the point of banal. Once you remove the philosophical notions from the fore, what remains is the pragmatic fact that what we have long referred to as “intelligence”, and what we intuitively perceive to be such, is increasingly being exhibited by machines. Once you concede this -- that is, the existence of machine intelligence -- there’s more or less nothing left to argue. Of course AI will be revolutionary. Of course it will alter the fabric of the economy and society. We’re talking about infinite intelligence here, after all — the ultimate meta-technology. The rest is noise.

It’s in this logical sense in which AI is fundamentally simple; it’s a very basic line of reason that gets you from premise to oh_shit_this_is_big conclusion. Ultimately, AI is relatively simple, as far as information technologies go, because its value -- its utility -- isn’t contingent upon its relation to other human beings. That is to say, a human with an AI is benefited from said AI even if no-one else has an AI of their own. In fact, AI in such a context would be especially valuable, because of the asymmetric cognitive advantage it would confer the user. Further, even if there were no other humans alive, AI would still be useful. In this sense, AI is a fundamentally asocial technology. Like the computer itself.

Crypto, on the other hand, is different -- it’s a fundamentally complex technology. That’s because, in large part, it’s a fundamentally social technology. In essence, the core innovation of crypto is public, distributed, verifiable consensus. Now in the context of a single user, and a single machine, this innovation is entirely worthless. “Public, distributed, verifiable consensus” is of course non-sensical unless there is, in the first place, a “public” to distribute and verify consensus for. However, once you have a public, and all the emergent social complexity that entails, the concept of being able to coordinate otherwise uncoordinated computers to agree on a shared “state of the world” becomes rather powerful. It’s in this sense that crypto is much more like the Internet than the computer. In a vacuum, neither makes any sense. Only in the context of human society -- all its quirks and contingencies -- do they become potentially interesting.

We’re now at the core of the difference between these two, parallel revolutions: AI is inherently valuable, whereas crypto is valuable only insofar as it’s situated within a particular human context. To compress: the value of AI is intrinsic, while the value of crypto is relational. To be clear, this isn’t a knock on crypto. As it happens, humans are always situated within a particular context -- and, fortunately for crypto, it’s this particular context in which we’re presently situated that would seem to render crypto particularly valuable. What it does mean, though, is that crypto is -- by dent of this fact -- considerably more difficult to reason through than AI. Unlike AI, where one only has to take, as a premise, the inherent value of intelligence and its substrate independence, crypto demands one reckons with the full complexity of the contemporary human condition. Indeed, one cannot come to appreciate crypto without first reckoning with, among other things, such deeply ambiguous subjects as political science and economics.

By virtue of its inherently social nature, crypto is naturally laden with oughts in a way that AI simply isn’t. This explains why crypto has become such a polarising issue. Because it’s not just a technological issue; it’s a fundamentally moral / political one. Ultimately, crypto has provoked a conversation concerning how humans ought to coordinate; how such things as money, finance and the Internet ought to work. Crypto, through the philosophical lens, is thus an examination of the fundamental rules of the current human game, and a sometimes traumatic reflection on the status quo. That’s why, at least in the public conversation, there’s conspicuously little discussion re the technological merits of various crypto systems -- i.e. what IS and ISN’T -- and far more debate along moral and ideological lines -- i.e. what OUGHT to be. In other words, crypto isn’t just about facts, and how they pertain to the world, it’s just as much -- if not more so -- about values.

This point is often made as a rebuke of crypto as an enterprise. E.g. “It’s too ideological”. Now if your model of the human endeavour is of a blind stumble through the space of possibilities with no particular aims or agendas, then the idea that humans are, somewhere out there, intentionally instantiating ideology -- that is, ideas and values -- into technology ought to be shocking indeed. If instead you view the story of human progress as the process of actively embedding increasingly better ideas into the fabric of society, then the notion of intentionally imbuing technology with ideology — i.e. values — ought to seem entirely natural, indeed ‘based’.

This is all to say, the emerging cryptoeconomic paradigm isn’t just a technological vision; it’s a fundamentally new socioeconomic paradigm. And that’s precisely what makes it so promising. It’s also what makes it so provocative. So, with` this in mind, what exactly is this new cryptoeconomic paradigm? And why does it matter?

Crypto is enabled by public blockchains and public blockchains enable provable scarcity and legitimate digital ownership, which go hand-in-hand. While this mightn’t sound all too revolutionary, on the surface, as it happens, these two features together serve as the necessary foundation for a parallel financial system — the emerging ‘Internet Financial System’ — and, by extension, a radically different Internet society.

Ownership and property rights are features of physical society that we fundamentally take for granted. Without them, there would be no modern economy, no financial system to speak of, nor any coherent concept of money. Ultimately, crypto represents the porting of these features — and all their emergent manifestations — into the digital realm. With Bitcoin, we have the first instantiation of credibly neutral Internet money. With Ethereum, we have a general purpose property rights system that enables the creation and exchange of any conceivable digital asset. And with next generation, ‘high-throughput’ blockchains like Solana and Sui we have more performant variations of the same underlying concept.

Since the birth of the Internet, philosophically-minded folk have spoke of the Internet as representing a fundamentally new jurisdiction — “cyberspace”. However, without any notion of ownership, the Internet has lacked the essential feature that defines any legitimate political economy. Crypto changes this. With the addition of ownership and property rights, the Internet is evolving its own native political and economic substrate. It’s transforming from a medium of communication and consumption into a global society proper.

There’s often a point of confusion here when talking about ownership in the digital context. This is because there’s a certain sense in which digital ownership already exists. That is to say, the existing financial system has already digitized. Our wealth is recorded no longer in terms of the number of physical bills or gold bars we have stowed under our mattresses, but on digital ledgers displayed on digital screens. On this basis, it’s easy to dismiss the revolutionary claims of crypto as mere hyperbole. However, this form of digital ownership is much weaker than the brand that crypto represents. What the present financial system represents is a thin digital veneer over a system that was constructed in a fundamentally analogue — that is, pre-digital — context. Crypto in contrast represents an intrinsically digital brand of ownership, one that doesn’t depend on traditional centralised actors — i.e. banks — maintaining records of their own. It’s not a revision of a previously existent system, ala the present scheme, but a net-new one built around a radically different technology / trust model.

What the cryptoeconomic paradigm represents, vis-a-vis the existing system, is a radical broadening of the space of digital value, economic models and incentive schemes. For in the cryptoeconomic context, effectively any digital object can be made an asset and can be programmed to exhibit any conceivable logic. While there’s a technological difference that makes a difference here, a large part of this unlock is simply a function of disintermediation. That is to say, when you remove the gatekeepers from the system, a whole world of possibility portends.

So the cryptoeconomic paradigm is a new paradigm of Internet-native ownership. It’s easy to wax philosophical about these notions, to rattle off a bunch of highfalutin esoteric concepts, but what does it actually mean in practice? Well, as of the time of writing, it means a rapidly growing Internet-native economy worth ~$1.7T. It means a market for digital art and collectibles worth somewhere in the vicinity of $200B. It means a system of transacting value — of any size, to anywhere — below a fraction of a penny. It also means a fundamentally new mechanism for allocating and provisioning both capital and compute resources. Everything else beyond the present is of course, by definition, speculation, but it seems reasonable enough to assume that all of these trends will continue to accelerate and perhaps even define the global economy of the 21st century. Why? Because crypto is the world’s most powerful social technology (aka the Internet) — the fabric that binds >5 billion people in an otherwise disparate and disconnected world — evolving its own political and economic infrastructure. It’s akin to the largest nation on the planet all of a sudden spinning up its own financial and legal system in earnest. While it’s certainly possible that this experiment eventually fails spectacularly, I wouldn’t advise betting on it.

So this is what crypto is. Now why, if all it amounts to is a new system of digital ownership and value exchange, is it so wildly controversial? As one has probably noticed, crypto is rarely spoken about in the same fashion as, say, the microwave oven or the electric toothbrush. Such technologies arouse little existential concern or care. However, crypto really makes people feel a certain ways — in both directions. There are the diehards, the true believers, who claim it’s the future of society writ large, on one end, and those who claim it’s but a giant ponzi, on the other. So, what gives?

There are a few ways to reconcile or at least better understand the polarity of crypto, why it’s so deeply provocative. The easiest, however, is to appreciate that crypto is a collective effort to build an alternative financial system, and that an alternative financial system is, almost by definition, a threat to the existing financial system and the powers that define it. For if crypto is indeed an alternative, and if this alternative should come to challenge the incumbent system, it would represent one of the greatest redistributions of wealth, power and status in human history. Lofty, sure, but these are nevertheless the stakes at play.

Then there’s the more mundane fact of the world’s ignorance. While it’s easy to lose sight of the fact, if you’re close enough to the machine, most people haven’t the slightest clue what crypto is — and conventional media outlets haven’t been especially constructive in educating them. Indeed, in the minds of most, crypto is synonymous with Bitcoin alone, of which they haven’t the slightest real clue about either. They consider it a ponzi scheme if not outright scam.

A more philosophical take on things is that crypto represents a radical reimagining of the very nature of, among other things, money — and most humans have a rather complicated relationship to money. More to the point, many have a deeply uncomfortable relationship to money. Thus anything that touches on the subject is bound to provoke mixed and likely troubling emotion.

Then there’s the more ‘sophisticated’ class of arguments against crypto. For instance, some subset of the esteemed intelligentsia deride crypto as ultimately good for nothing — a ‘solution in search of a problem’. They compare crypto to other information technologies like AI and assert crypto has yet to provide anything remotely comparable in value. While I would argue this neglects the very real value that crypto already provides — for instance, near-free global payments at the speed of light, or the democratization of the present global reserve currency in the form of stable coins — it’s nevertheless an unfair comparison. Crypto isn’t a singular technology in the same way AI is. It’s a fundamentally social technology — akin to the Internet — that merely broadens the space of what humans can collectively do together. And that’s ultimately the virtue of any powerful technology — it expands the scope of human freedom; not in the libertarian sense of things, but in the sense of capabilities, that is what humans can do. As for the normative dimension, no technology is either inherently good or bad; their moral value depends on how humans elect to wield the technology in question, what they do with it. Claims that crypto is fundamentally capital-b bad neglect this essential insight: crypto is whatever we make it.

I’m starting to get bored of my own words, so I’d like to end this thing with some final thoughts and speculations. While crypto is an umbrella term used to refer to an expansive and fast-growing ecosystem of related technologies and ideas, in my not-so-humble opinion, the most fundamental idea one ought to wrap their head around is the notion of a ‘cryptonetwork’, the systems that underly and encompass all of crypto. Cryptonetworks are best embodied by the so-called L1 blockchains that serve as the ultimate substrate of crypto; they’re the ledgers, the virtual computers that “live in the sky”. What these cryptonetworks represent, as I see it, is the fundamental political-economic unit of the Internet; institutions for the Digital Age. These networks are, like the dominant social networks of today, collections of human beings interacting in digital space. Where they diverge from the likes of Facebook and Instagram, however, is in the fact that they’re not owned and controlled by any single entity. They are instead owned and operated by the network, its user-base, as a whole. Moreover, they are fundamentally open-access — all their data is public and transparent and protected by strong cryptoeconomic guarantees. In just the same way as legitimate legal systems provide certain guarantees to its citizens re what they can do and build, so too do cryptonetworks provide guarantees that make them especially hospitable environments for permissionless innovation and entrepreneurialism. Accordingly, they represent a much sturdier and equitable foundation for the Internet economy than the social networks of today.

The reason this is speculation is that cryptonetworks are not currently central to the average person’s Internet experience. And even for those who are participating in cryptonetworks, the actual social experience of cryptonetworks are still overwhelmingly mediated by Twitter. As of the present moment, cryptonetworks represent an extension of traditional social media rather than a wholesale substitution. What I’m expecting, and what I’m hoping, is that cryptonetworks and the applications built on top of them eventually subsume social media entirely. Although there exist early experiments, what remains to be imagined is a social experience built around this cryptoeconomic principle of ownership that can rival the experience of web2 incumbents. Introducing ownership and financialisation of social media represents a world of opportunity, but it also represents a whole suite of UX challenges. However, I’m optimistic we can figure out how to thread the needle here.