Thread by @leashless

I think it's necessary to examine the link between cryptography and cryptocurrency more closely.

Implementing a central bank of the internet is a political project. But it produced a huge, radical revival in general cryptography. This is very much like the 1990s all over again.

Cryptography is why we have e-commerce: you can't move credit card numbers without encryption. Trillions of dollars generated in new trade. But no central bank function, of course. This is just trade optimization.

And it gives rise to surveillance capitalism. Not *enough* crypto

Can crypto central banking survive: can cypherpunks continue to print their own money?

Almost certainly not. Almost certainly not.

Why? Because anonymity technology is weak. ZKSNARKS don't protect you from network surveillance. Encirclement by financial regulators and Facebook.

You have to go all the way into cryptologic secessionism - separating the world of mind from matter - to get that kind of freedom. Maybe States would allow it in virtual reality, but the choke points between the physical and virtual are all too real. Freedom is hard to find.

This does not mean that the contradictions inside of State captialism won't cause financial and social collapses. That's a fact of life today, and historical record, all across the world. Capitalism as actually practiced breaks down and explodes over and over again.

So then let us think about "the better world."

Right now cryptocurrency is a form of elite defection. The early adopters have peeled off into a parallel reality, where start ups have 20 year runways. And very little is coming back into the real world.

Yet. Scaling has to happen

So we have basically two competing visions: "bitcoin maximalism", in which bitcoin bankrupts the Nation State as merchants refuse to use their worthless unbacked paper, and "internet globalism" in which e-commerce expands to encompass all trade. These are not mutually exclusive.

There is a version of bitcoin maximalism in which bitcoin parallels gold, and like gold is not used in daily trade. There are internet globalisms on which trade is still done in national fiat currencies or resource currencies.

But there is a huge possible overlap. Let us examine

In the bitcoin maximalist scenarios, there are two elites left: resource elites and bitcoin elites. San Francisco landlords still charge huge rents but only accept bitcoin. Most of the existing rich stay rich, because most of them store wealth in resources and productive assets.

The people who get squeezed hardest in the bitcoin maximalist scenarios are the ones who keep their assets in cash and dollars: poor people without property, and the middle classes who's assets are in pension funds and so on. MAYBE massive economic growth lifts all boats. :-/

"Internet globalism" is just a *much* more efficient version of what we have today: Amazon-type ease of ordering, but now it's purple potatoes from Andean ecovillages straight to your door, and custom everything if you can afford it. It's a straight progression. You know this one

So let's drill down deeper. Let us now ask, given that internet globalism is largely independent of the currency model (Visa) what the real difference is.

Who gets to issue the money, and live off issuing the money supply.

Answer: it's miners, and anybody with capital can mine

Bitcoin is Capitalism with fewer restrictions. Capital issues currencies which are secured by destruction of wealth. When you are no longer rich enough to burn, you no longer get to print money. Perfect oligarchy supports perfect free trade.

Does the efficiency gain lift us all?

And this is basically Hayek: get out of the way and let people make their own mistakes. The sum of many small mistakes does not total to the apocalypse of a financial collapse unless you bailed everybody out at every step along the way.

Coiners knew this in 2012. All of them.

Now, let us add ZKSNARKS and smart contracts. Smart contracts can give us lower cost trade. They can also set up economic machines without owners to profit from them: services without rentiers. (They're miners now.)

Is this a new cooperativism, or just more efficient capitalism?

ZKSNARKS do something different: they deliver a viable mechanism for non-transparency high security trade. That's needed by real financial institutions. It's also needed by black budgets and mafias.

You're going to need a license for that snark. Or the world breaks in new ways.

Every technology, every cryptographic algorithm, contains within it a range of possible new societies.

I've given you a little tour of this way of thinking, of seeing the world. Now please go and read Shockwave Rider and Alvin Toffler.

Cryptosociety needs these tools to work.