Cryptoc-Economics: The Solution To Technological Socialism

in LeoFinance2 months ago

We are going to embark upon a topic that few really discuss in a direct manner. Thus, we will grasp understand how Crypto-Economics could be the solution to a lot of what is going to ail humanity over the rest of this decade.

In this article we will use terms that people are commonly familiar with. The reality is that the entire situation is changing, making old ideologies obsolete. However, for sake of clarity, we will go with those that people understand.

Capitalism is obviously an economic system which provided a lot of growth and wealth to humanity. Over the last century plus, we saw the global standard of living explode. This economic system is the best one we ever developed for generating massive increases in productivity.

However, we see there is a downside to it. While it excels at creating wealth, it cares little about distribution. Capitalism is not a very effective model for filtering the financial benefits directly throughout the system. That said, as the development of technology takes place, many are lifted simply through the access this affords people. Consider the fact that homeless people in the United States have smartphones that enables them to operate online. This is something the wealthy did not have 20 years ago.

Many feel the answer to this is socialism. This is deemed by some to be a "fairer" system. While this appears to be true since it does better distribute the gains from production, it is not as effective at generating them. Socialistic countries repeatedly fall further behind those which operate from the capitalistic perspective.

This trade-off appears to be the grounds of the everlasting battle. Obviously, long-term, the growth is needed to support an expanding population with a thirst for progress. We want more than what was available decades ago. While many attack the idea of consumption, they tend to do that on their laptops or smartphones while utilizing broadband access (perhaps driving around in their luxury automobile). Few are willing to forgo the comforts that advanced society provides, especially when it comes to technology.


Source

We are now at a time when we are going to see a radical alteration in society. Our economic system is being completely upended. The advancement of technology is automating many areas that once provided sustenance to humans. As we march along, this looks like it will only keep getting worse.

While some cite that technology "always creates more jobs than it destroys", that was at a time when things were much slower. Also, the end result was always over the course of decades, something that matters little to those who will be put out of work in the 2020s. Having more jobs in the 2040s is of little consolation to them.

Automation is going to provide enormous increases in productivity. In those fields where we already see it, this point is clear. Take the financial industry and automated traders. All the major Wall Street institutions are involved with this along with high-frequency trading. It is completely automated and generations larges sums of money each quarter. However, the software is proprietary, in the hands of these firms. The masses are not involved in the ownership nor the benefits of them.

Many have promoted the idea of some form of basic income. There is great debate how to pay for it with proposals all over the board. A popular approach, and one that makes some sense, is to tax the automation. Here we see the high-frequency trading along with other "robotic" work taxed so that the government gets a piece of the productivity. This is then distributed throughout the population.

The problem here is that even though this is technological, it is still socialism. It involves the government which is another term for politicians and bureaucrats. This mean that the entire system is at the whim of political winds as well being less efficient. At the same time, we end up seeing growth stifled since politicians simply have to spend more money buying votes and increasing their power. This is what politicians do so to expect that to change is not going to happen.

Tokenization

What will fit in ideally here is tokenization. By utilizing cryptocurrency, we can see an entirely new economic system emerging. This is neither traditional in the sense of capitalism or socialism. Instead, it allows for an entirely novel approach to this entire matter.

Automation should be pursued for its growth potential. For the next few decades, at least, we will still have an expanding global population. We need to have more food and other necessities. At the same time, we already have distribution issues, such as food, in many of these areas that requires correcting.

We are also seeing more exit the state of dire poverty. As countries develop, their populations desire more. They see what is on the Internet and what others have. They, naturally, would like the same things also. Hence, we need more appliances, automobiles, and housing.

Crypto-Economics can unleash a growth curve that the world really never saw. Since it is tied to digitization, we can see rapid advancement in many areas due access to new capital. We also can witness the distribution and involvement span the entire global, resulting in a more inclusive system.

What changes here is the ownership model. Whereas we have a present capitalistic system that sees the resources, for the most part, in the hands of a small percentage of the population, Crypto-Economics expands this to include, ultimately, billions of people.

At the same time, unlike the socialistic systems, which effectively "punish" the biggest producers, the incentive does not exist here. There needs to be no centralized entity, i.e. government, who is responsible for the distribution. Through Crypto-Economics, we can see this filtering, naturally, throughout the entire system.

In the end, people are no longer the product or simply a cog in the entire machine. Instead, they are part owners and thus receive direct financial benefit from the productivity that is achieved.

This is a radically new system as we can see. It also removes the barrier of dis-incentivizing automation. Under a Crypto-Economic model, we want to automate as much as we can. If this leads to far greater productivity and output, then humanity benefits across the board.

In the end, it allows for enormous growth while offering a much better distribution model that we see right now. Everyone can be involved in the abundance that is generated without having to deter those who are finding success.

Crypto-Economics is a system of incentivization that allows for the creation of new systems, applications, and business structures. This is the root what is going to change the economic path of humanity.


If you found this article informative, please give an upvote and rehive.

gif by @doze

screen_vision2025_1.png

logo by @st8z

Posted Using LeoFinance Beta

Sort:  

I see Hive as a vehicle for exploring systemic changes in economics and governance. Each community can create its own economic and governance model. This kind of customization would be very difficult without digital technology. In contrast to the imposed model of governments and their taxation and legal systems, in this new model people can choose to be part of communities and participate in their economics and governance.

We see the modest beginnings of this in the current communities we have on Hive, where people participate by contributing content, curation or funds, and the distribution is based on whatever the community's distribution model is (typically, valuable content gets rewarded). This can be expanded tremendously. We can imagine people contributing all sorts of things, all sorts of community projects happening, and all kinds of distribution models (including UBI models). Can't wait to see more and more experimentation.

Posted Using LeoFinance Beta

and the distribution is based on whatever the community's distribution model is (typically, valuable content gets rewarded)

And people can also have an effect on the distribution by setting beneficiaries on their posts. This is what I started to do on my posts recently. I also have an ongoing comment contest about this until 2021.05.30. I may make more contests in the future, if this one will be successful.

Hive is a microcosm of the whole. What you refer to is actually all of crypto. There is a lot of experimentation and innovation taking place. A lot of it will end up in the junk file but some will be amazing breakthroughs.

Posted Using LeoFinance Beta

The short version: crypto plebs rejoice ! you won't be plebs forever :)

Posted Using LeoFinance Beta

That is very true. Cant argue with that mindset.

Posted Using LeoFinance Beta

i like this a lot, but am having trouble envisioning the various transition states between here and then.

a tokenized economy can indeed give a more distributed share of value, but if its value generation is still rooted in physical resource manipulation, it still is beholden to those that control the physical.

certainly we're seeing a wider and wider distribution of improvement and economic benefit, but with something so disruptive, a lot of parties will fight to keep their power.

i'm still very invested in the benefits of crypto, but even now we're seeing traditional institutions attempting to gain ownership, or control its path, and crypto tokenomics by themselves seem ill equipped to solve all the problems.

so is partnership with traditional systems the way forward? are governmental forays into crypto going to make steps forward?

i'm really just interested in more thoughts, if anyone has the time. thanks!

Posted Using LeoFinance Beta

This is exactly what always makes me wonder:

a tokenized economy can indeed give a more distributed share of value, but if its value generation is still rooted in physical resource manipulation, it still is beholden to those that control the physical.

Blockchain and cryptocurrencies really are great, because they share the best of both worlds: they incentivize to be more productive, like a capitalistic system does, but they also allow for more fair distribution of the generated wealth. This is great.

The problem is that the crypto economy is still dependent on many factors: you need to have an electricity and an internet connection in order to be able to use it. Without any of these two you basically have nothing.

Apart from that, people still have basic needs, especially related to material needs: a place to live, something to eat and drink, and so on. Blockchain is a technology that is thousand layers above of these basic needs, and thus depends on them.

Although the above problems (or rather vulnerabilities) are not crypto specific, I am ware of that. Most of us no longer carry around too much cash, so without the electricity we would not be able to use our bank money as well. My point is that blockchain and crypto won't magically solve all of our problems.

so is partnership with traditional systems the way forward? are governmental forays into crypto going to make steps forward?

I would hope not, but I doubt a world without governments is possible. Any system has to have ways of controlling it. You could say that the biggest and most influential witnesses on Hive are also a form of government. We'd like to think we Hiveans are completely free of any top governance, but the fact is that most of us lack the knowledge to run and maintain the system.

So it all comes down to having a government that works smoothly and transparently, without authoritarian tergiversations—so that you can influence it, and if you choose you can opt out of its governance without consequences.

I think this topic was somewhat touched (although in a much more metaphorical and philosophical sense) by Dostoevsky in his story of The Grand Inquisitor.

i guess the idea i was getting at with "government and traditional systems making steps forward" was that they will continue to exist with a large share of power for the foreseeable future, and their efforts in "the new economics" will have its impact.

there will be feedback between a DAO-ish mindset and traditional governance, but they will have different end goals.

but @taskmaster4450 rightly points out the current rate of progress, the disruption of various parts of the economy by new technology, and the general trend in satisfying human needs, which in some areas now include rights to Internet access. a fair number of these projects were undertaken by state governments.

South Korea comes to mind here, as an example of a techno-progressive Democratic, soft-Authoritarian state. the state invested heavily in Internet infrastructure in the '90s, recognizing the potential it could offer, and their citizens have certainly benefited....but they also have mandatory military service....

i'm rambling a bit, but i suppose i wanted to assure everyone that i'm not saying that centralized government will solve our problems. a socialist government's lag in comparative progress comes from an essentially parasitic bureaucracy extracting value. a capitalist government gains from progress made within its borders, but often lacks resources to do anything else with that improvement.

Posted Using LeoFinance Beta

Governments, or rather the people in them, act in their own self interest. There is no denying that. Actually it is almost all people so this will not be any different.

However, we have repeatedly seen what happens when the Internet enters a particular industry. Hence, when we look at the crypto equation, most are focused upon the financial. That is just one piece. What about the data and digital ID? And, probably more importantly, what about governance?

That is really where we will see the government disruption. Governance will simply be improved upon making the existing system obsolete.

Posted Using LeoFinance Beta

I would hope not, but I doubt a world without governments is possible.

We need governance, not governments. And I see no reason to believe that Nation-States will last. They are close to being obsolete already. They were constructed in a time when we lived in a physical world. We are quickly moving away from that. Even what is now physical is in the process of being digitally mapped, sensored, and having a processor. This will move us to a completely different realm.

I think we are progressing toward networked economies as opposed to geographical ones. Where one is physically is getting less important each day.

After all look at your comment: it matters none where you were when you made it. The information arrived at its destination, can be processed and replied to, and your reward for the upvote will be in your wallet (which isnt physical) in 7 days.

We will see a lot more of that.

Posted Using LeoFinance Beta

...but with something so disruptive, a lot of parties will fight to keep their power.

Certainly they will. They are not going to just give up the power. Of course, didnt Blockbuster, record companies, and physical stores fight to keep what they had? How did that work out?

i'm still very invested in the benefits of crypto, but even now we're seeing traditional institutions attempting to gain ownership, or control its path, and crypto tokenomics by themselves seem ill equipped to solve all the problems.

They are taking control of Bitcoin, not crypto. Digital assets are being created on a daily basis. They are coming in all forms, not only as "cryptocurrencies" as we frequently refer to them. Of course, even there we are seeing more tokens, more projects, more of everything. With so much already open source, the ability to fork makes it impossible to control it all.

Posted Using LeoFinance Beta

They are taking control of Bitcoin, not crypto.

this is why i said "attempting". they have their limits.

Of course, even there we are seeing more tokens, more projects, more of everything. With so much already open source, the ability to fork makes it impossible to control it all.

yes, this is probably the way forward, increasing the scope of information and technological availability.

and i suppose real world incentives follow from these social incentives. like, i could have a factory in China make a bunch of mugs with my logo on them even if there is no value there, but that service exists because of the potential in value creation.

Posted Using LeoFinance Beta

pixresteemer_incognito_angel_mini.png
Bang, I did it again... I just rehived your post!
Week 57 of my contest just started...you can now check the winners of the previous week!
10

!BBH

Because this is such an awesome post, here is a BBH Tip for you. . Keep up the fantastic work

Crypto reminds me of capitalism and socialism at the same time, which is quite contradictory.

Especially PoS and DPoS systems with an inbuilt DAO.

On one hand rh means of production are generated based on the amount of stake one has, which isn't the best distribution model, whilst there are community funds that remind me of social ownership.

However, at least Hive allows individuals to allocate the inflation where they see fit - double edged sword.

Wow, good stuff, but my brain is a little fried after that. Some heavy concepts that I wasn't quite ready for. I saw this post come across my feed last night and I decided to leave it for today hoping I would be able to process it a little better. That doesn't seem to be the case. I am just slow :)

Posted Using LeoFinance Beta