Crypto commodification-ideology and techno-feudalism

Continuing the discussion from GitCoin, "Quadratic Funding", crypto-Web3-DAO etc vs Snowdrift and crowdmatching and from On the fundamental tensions around money and its place in society:

This article/interview I just read really is key to what I’d been seeking: a perspective that makes sense of the shifts in economic trends: Crypto, the Left, and Techno-Feudalism | Yanis Varoufakis & Evgeny Morozov in dialogue - mέta

A little snippet (it’s a long read, but worthwhile):

In the name of liberating us from moguls, states, and even climate change, crypto zealots are turbocharging the ideology of commodification

The following are my mostly-unedited short reflections after reading it:

I have read and heard from Yanis Varoufakis before and have appreciated deeply most anything he has to say. I had made note of his work with Valve in the past and noted something about their published documents about their internal team policies as something to read. I only now recognize how his work with Valve and early dynamics of in-game economics spilling into the “real” world brought him remarkable perspective. This is the informed, nuanced non-reactionary critical take I was looking for.

Blockchain has deeply important value just as all sorts of technological innovation has value. But it cannot itself address the political systems. The enthusiasts are not questioning the core nature of the problems. The problem is in the whole premise that we need scarcity and exclusivity as our economic foundations. Cryptocurrencies don’t get us out of that flawed premise.

I won’t rehash the whole article here. Suffice to say, it’s fascinating to see the shifts and ideas being pushed around still. And we have to grapple with them and their noise as we engage in the world in which we now find ourselves.

The solutions we actual need must focus on developing social and political patterns, ideas about how people coordinate and cooperate. And within that, we need the capacity to engage adaptively with our economic tools. We must avoid a scenario in which we work to achieve democratic human processes only to be incapable of democratically managing economic technologies because of the locked-in tech design of the system. We can only have democracy if people are able to democratically change the rules of the game.

Where does this leave us? I think any project inextricably tied to cryptocurrency is a long-term dead-end, but how long, I don’t know, maybe long enough that it will stay extremely hard to convince people of it. Blockchain technology will stay around and be useful, it’s just not a panacea and not going to necessarily go where we want to go. Projects that incidentally use cryptocurrency are more interesting if aspects of their work are independently interesting. Maybe the social/political ideas from the cryptocurrency world will also have huge impacts on the outside world, but the most prominent today are simply those being exploited by standard entities (e.g. Paypal and CashApp now hyping cryptocurrency and pushing users to buy it through them). Anyone who thought it would be or necessarily will be any different has been delusional.

The remarks in the article about how China is really being smart and actually taking a holistic combination of steps to retain political autonomy and keep financialization at bay… that’s fascinating. The future of fiat currencies freed from private banking is a prospect with huge potential impact. That’s a viable revolutionary direction which is fully compatible with (but not necessarily getting us to) the world we envision.

2 Appreciations

Related: this 2+ hour video is a quite thorough (and entertaining enough to watch) devastating, condescending overview of the hype around crypto and NFT’s: Line Goes Up – The Problem With NFTs - YouTube

I have a meta-thought that I think is useful to share: In hindsight, I have this sense of having always had a pretty good balance of open-mindedness and skepticism around all this stuff and the rest of our social and economic reality. My problem is how the time-frame in my mental-model of the world is too big to work with day-to-day experience.

From the early days of the iPhone, I was freaking out about walled-gardens and advertising (I only ever personally got my first any-type of cellphone in 2014 incidentally, ironically to deal with the disappearance of payphones and planning my first time attending LibrePlanet in Cambridge, MA; where all the talk was about the surveillance horrors of cell phones).

Similarly, I have been worried about core issues of environmental sustainability since well before “sustainability” was a term in common parlance. The difficulty is that when I learned 30 years ago about the issues with pollution and climate, I was already sure that business-as-usual could not continue — that if it didn’t dramatically change, the systems we relied on would collapse. But I did not at all expect that the following 30 years would see more pollution than all the prior emissions combined and then somehow continue accelerating with no day-to-day sense that it would ever end. I have long understood the “long emergency” while really failing to see how long it could take.

So, from that perspective, we can recognize the fundamental flaws in a system like cryptocurrencies, but I now worry that we can’t get a critical mass of people to understand flaws in any system both long-term and complex enough. If the players can’t see the flaws readily enough, they’ll keep playing until they truly can’t. And the worst case is if the only absolute dead-end that stops an unsustainable game is when we go all the way to full self-destruction.

This is why it is so important to develop extremely-clear, extremely efficient concepts. Consider the core idea that we have to build social systems founded on abundance and sharing rather than on scarcity and exclusion. Just maybe, with enough emphasis and context for that key idea, people can quickly spot which paths are aligned with that principle. We cannot rely on getting people to go through the density of confusing ideas about political economics, tech concepts, philosophy etc efficiently enough. Without a truly effective few-sentence inoculation against the problematic aspects of cyrptocurrency systems, the game is just too damn long and people will believe in it because it’s hard to live for years in a certain reality and keep in touch with the idea that it is based in delusion and bound to collapse.

1 Appreciation

Okay, got some more context, the original link in this topic is a repost from

That is somewhat overwhelming, almost the extent to which someone could spend the equivalent of a couple years of full-time college study to grapple with all the background they get into. But this seems like the crypto-critical deep engagement I was hoping existed at least. I’m not sure whether to prioritize this. At this point, I think what I’d like most is to have some serious conversations with people from that initiative to get their perspective on and our challenges engaging with the world we now find ourselves in.

1 Appreciation

Lots of great thoughts here @wolftune ! I think you’ve come to the same conclusion so many have come to: the ultra-wealthy essentially have all the power in our world, and nothing will change so long as the systems that brought us to this point remain in place. It is a long and exhausting multi-generational struggle that we may or may not see the fruits of in our lifetime (unless something catastrophic disrupts the status quo).

So I think we should first and foremost organize. Find the people in the fight and connect with them, learn from them, support them. We should furthermore all do what we can to educate as many people as possible about the true nature of the power dynamics we live under, what we can do to fight against it, and to remain hopeful and positive and optimistic. Pessimism and defeatism are not useful to the struggle, and is a constant obstacle to getting things done.

But for the immediate corner of the world where exists, I think keeping in mind the big picture and aligning goals in that direction is sufficient. One project can’t be expected to solve all the world’s problems. It can be the best project it can be and help in its own way.

I hope my rambling made some sense :slight_smile:

2 Appreciations

Thanks for the thoughts. That all makes sense broadly. Minor nitpick: I think a starting understanding of these things is “first and foremost” before organizing. But otherwise, yes, agreed.

To bring it back to the topic here, the core point is that I was asking “are cyptocurrency and other dynamics around it actually a threat or shift in the remaining-in-place of the systems-that-brought-us-here?” and “are cryptocurrency folks in the list of ‘people in the fight’ to organize with?”

And I’m still not fully settled on the answer, but I now have enough perspective to have a tentative conclusion. I sense that the cryptocurrency world is dominated enough by dead-ends, bad-incentives, delusions, and also people not even interested in the direction we’re organizing towards. That they make noises that sound compelling means there’s still stuff there worth connecting with. And some people are liable to really believe in the visions of a more just world. So, it’s a space to stay aware of somewhat, but I think I can write it off in terms of it being any sort of prime place worth engaging with for our organizing work. That said, we’re going to keep running into it all the time, and we need to learn how to engage or not.

Yes definitely understanding needs to come before organizing :+1:

Yeah sorry I went a roundabout journey and didn’t address the crypto point directly. What I wanted to say is that the question should always be: does it help? And by that I mean: does it (whatever it is) support / enable the fight against the status quo? Or does it just help our ultra-wealthy overlords stay in power? As far as I can tell, cryptocurrency seems to do absolutely nothing to help the struggle against the overwhelming power of the capitalists. I can’t say I’m a crypto expert per se, but I’ve dabbled enough to feel relatively safe in saying that.

Now I will caveat that by saying public ledgers and blockchains and dags are NOT equivalent to cryptocurrencies. Cryptocurrencies are just projects that use these technologies and others for the purposes of currency alternatives. My criticism against cryptocurrency only applies to the currency aspect, not the underlying technologies.

2 Appreciations

Btw, one relevant comment, this is a quote from a footnote I put in the newly-rewritten article Snowdrift Wiki - The Snowdrift Dilemma

In the world of cryptocurrencies and other blockchain technologies, there is often a focus on “trustless” systems. Specifically, when contracts are effectively enforced by the rules of the program, there’s no way to violate the agreements. That might seem to solve the problem with a lot of these game scenarios, but there remain many areas of life that rely on trust. A system which makes it impossible to break an agreement is also a system in which trust-building is impossible. In such a system, a trustworthy actor and a would-be cheater behave the same way. So, if we want the most robust world where we have trust, we need to be vulnerable and allow people to break agreements. Only by engaging over time with such vulnerability can we establish real trust.

1 Appreciation


@Adroit mentioned SourceCred recently in meeting and on our Matrix chat. I had it bookmarked to look into (among a couple hundred or more links to get to someday). This prompted me to look at it.

It’s cryptocurrency-based, but the framing doesn’t put that feature front-and-center. They mention “tokens”, and the focus is clearly on the idea of actually figuring out how to measure value in contributions to FLO software.

…wealth actually flows to those who are creating the value in our world

So, being picky on that language, they want meritocracy for real. They acknowledge that capitalism today is nothing like meritocracy. I don’t fully support the core premise of meritocracy even, but at least it aligns incentives toward whatever we somehow think is actually good for the world.

The weights for Cred distribution are decided by each community individually, thereby giving every community the opportunity to decide what it values and which actions uphold those values as they work together to create something. Every community using SourceCred can decide for themselves what is valuable and deserving of Cred, and what is not.

That does go with my core concern that real people be able to use judgment and not merely end up playing a game that is ruled by an algorithm made by a few people undemocratically.

To translate my interp of their docs, “Cred” is a form of NFTs, “Grains” are their cryptocurrency. The reason this is potentially distinct from the rest of the speculative crypto dynamics: a reason to buy Grains (e.g. with USD) is because the buyer specifically knows that this is a means of getting USD to people they want to reward and incentivize, people they want to support for their FLO software contributions.

To restate that, I can have no belief in Grains as a sustainable currency in itself but just know that if I buy Grains with USD, the people who are selling me the Grains are ostensibly people who got them via FLO contributions. If that premise holds up, then separate from whatever actual transactions and economy happens within the exchange of Grains, people can sell them for USD and thus be able to pay for groceries and rent and so on. And my goal in a sense isn’t to have Grains for myself as an investment. My goal is to help FLO contributors pay their bills and live well.

Given that I don’t keep the Grains for the purpose of speculation, I’m not supposed to sell them to get back my USD (or more USD than I invested). Instead, I put them as the reward bounty on some FLO work that I want to get done. Thus, my purchase of Grains in USD amounts to a mechanism to get USD to people who do FLO work — and the value ostensibly is in the premise that the SourceCred system helps to effectively determine how the money is distributed. I’m not buying an investment vehicle, I’m going through this SourceCred system as a means to pay for FLO work that I wish to support.

SourceCred is not meant to replace the critical components of human collaboration, decision making, and social resolution of conflict that help a community thrive. It enables more effective measuring of meaningful contributions—such as emotional labor and community cultivation—and rewards those human caretaking actions, which are historically not valued due to not being transactional.

Very intriguing. I like that they really call this out and celebrate it. I have some trepidation about the last point. I would like if it had a little addition “…nor should they be!” I don’t want human relations to become more transactional. I don’t see how we avoid that in this system except that maybe if the human decisions can be essentially gracious thankyous that include Grains, that’s okay (versus having the caretaking be automatically contractual). I think this could actually work…

My own inclination is to remove commodification from more things rather than to get everything commodified. I’d like to eliminate the commodification capacity of current exploitive capitalism rather than commodify things capitalism has failed to include so far.

at this time SourceCred is better suited for smaller communities with emotional maturity and a high level of existing trust

This really does seem good and quite distinct from other stuff in the cryptocurrency space, and it actually is something I can make sense of, it doesn’t go against my intuitions the way Ethereum does.

Every community will use Grain differently

This seems key to me. This means the tech and concept of it is freed from the speculative pattern. If SourceCred takes off, nobody has to be the suckers who are late to the party if they just have a new community with its own approach to Grains. This makes Grains a tech that can be connected to money and currency if and depending on how the community decides to do it.

This seems legitimately to go towards the claims both from Varoufakis (in the article I linked at the top of this topic) and from @Adroit and @Salt that this sort of blockchain technology and NFTs can be truly used in effective and ethical ways that aren’t based on being speculation scams. I don’t see in any of their docs the sort of naive delusions or impenetrable jargonny claims that I’ve seen elsewhere. I’m feeling quite open to the possibility of this really working…

1 Appreciation