Use Crypto | #34
Use Crypto | #34
If you want something done right, you gotta do it yourself
Pretend you're not happy with any existing country and you're starting your own. Why would people join you? What makes your country different? How are your citizens "superior" to others, and what must they do to earn this superiority?
You can think of your country's innovation as a "commandment" -- something you must do to belong, and that makes you better in some sense when you do it. The Network State includes many examples of what such a commandment might be, such as keto kosher (we don't each carbs), digital sabbath (we don't use tech on Sundays), or medical sovereignty (we let you do whatever crazy thing you want to your own body).
There’s one proposal, however, that I’m surprised didn’t make the book: a mandate towards open finance and the use of decentralized cryptocurrency instead of state-controlled money. The commandment here is to use crypto, not just as a road to getting rich, but as a way to meet your everyday needs. Buy groceries, pay your plumber, give money to a friend (or a stranger), collect a salary, buy some weed, sign into a website, take out a loan, vote on a proposal, and so on.
Why rally around crypto usage? First of all, it's a great fit for the network state paradigm. Crypto plays a central role in Balaji's vision, and crypto natives will grasp it most easily. If you already use crypto, you probably understand the potential for network states and you're comfortable with new modes of interacting. If you don't, it's gonna take a lot more convincing to get you on board ("you want me to install a wallet app?? to record things onchain???").
Second, it's actionable and action-oriented. It tells you exactly what to do. Should I ignore crypto? Complain about crypto? Idly wonder what crypto is? Hodl crypto? NO, *use crypto!* If you bought a bunch of bitcoin in 2015 and are sitting on it till you retire, congrats on your luck or foresight. But you're not a crypto user. On the other hand, you don't have to disavow mainstream currency to fit in. Crypto has religious elements, but its primarily a tool to transact value online.
Focusing on day-to-day use naturally puts you in the inner circle of crypto -- a more potent community than the broad and ill-defined "crypto users". Crypto follows the 1-9-90 rule: 1% build new things, 9% use them, and 90% just sit on their tokens. Here's a recent graph of crypto adoption. Look at 7-day active addresses vs # of owners for each protocol. Almost no one uses crypto on a regular basis, even among people who already own it!
Using crypto is optimistic and pro-tech in general. You’d be recruiting early adopters, comfortable on the frontier of innovation and eager to advance the state of the art. Adjacent fields (cryptography, energy, communication protocols, open source, governance) reap benefits from early crypto users, so
A good commandment is divisive. It makes you put some skin in the game, to stand up for your beliefs. Imagine asking "do you use crypto?" on a first date. The response you get could tell you a lot. It's like being a Goth or an Orthodox Jew -- you fit into crypto subculture in proportion to how much you stand apart from the mainstream fiat culture. The middle ground is erased to make the contrast starker and the commitment more decisive.
In fact, active crypto use is a stance for money that's independent of state government. It's about freedom to transact, rule of law, and pluralism. When you use crypto you declare your moral and political allegiance to non-government currency, and that's a bold and heretical stance in almost every country on earth. Crypto is a threat to legacy institutions. By showing that finance and government can be decoupled, you threaten the governments that rely on that coupling for power.
It is useless to argue with someone whose opinion is based on a personal or financial interest; the only way to deal with them is to out-compete them.
Finally, there's a pragmatic business case for being an active crypto user. It's pretty obvious that UX is a big hurdle to crypto adoption. Assuming you want more of that, and you're not yourself working to build crypto products, the best thing for you is to create deman for such products to be created. That demand will attract entrepreneurs to make things for you and your fellow citizens. This spins the flywheel, pulling in more citizens -- a network state effect.
Caveat: this line of thinking is predicated on the current moment. In 20 years, I hope using crypto will be far more mundane. That's ok. Network states don't have to be universal. They are closer to startups, taking advantage of what works now and evolving to meet future demand.
If you care about crypto, use crypto.