On the previous installment, we discussed some of the more pressing issues with capitalism, such as the fact is promoting inequality amongst developed nations, as well as, capitalism doesn’t seem to care about populations well-being, white it focus solely in increasing profits and revenues for shareholders.
Of course, this is doesn’t mean there aren’t better ways to look at metrics or that we’re even using the right ones.
My goal today is to explore how cryptocurrencies can expand our understanding of value and how they can help us find ways to bring more value to a greater number of folk.
Alternative Ways To Grow
First things first: in order to change, we need to understand what to change.
My initial approach would be to carefully look into which metrics are used and why. For instance, when comparing economic growth we tend to look into statistics like GDP, while at the same time, we forget the real-production value of an economy isn’t measured only in transactions’ value, but in who performed those transactions and who ended-up which what value.
The point is: we need to base our decision-making process, not in global values of growth like GDP, but instead in how value is distributed through the population.
In other words, how greatly is said value redistributed among its population.
Right now the US is doing poorly, when compared to the rest of the developed world. In Europe, for example in Denmark, Sweden, Norway or the UK, wealth is considerably better redistributed among the population.
Well, for starters, these countries adopt a socialistic approach, where governments tend to have a higher degree of interventions, for example in education, healthcare or social benefits, in order to improve the overall population standards of living.
The worst bit of this inequality of wealth distribution ordeal is that it was actually improving until the 90s!
This is, the top 1% was losing power while the bottom 90% was getting richer.
That’s precisely the way to go!
However, something happened; something that completely changed how value was being accumulated and distributed to its populations.
A great deal of analysts, future thinkers, entrepreneurs and even some more progressive economists, tend to agree that the destruction of the gold reserve and shifting from a robust reserve banking system to a fractional reserve banking system, might have had something to do with how things progressed.
After all, the insane amount of debt produced due to fractional reserve banking, lead to a loss of USD purchasing power, which proves the previous arguments.
Less banking regulations simply meant more ways to be corrupt and abuse power.
That’s how things work, there’s no point in sugar-coating it. The more freedom you give people the better, however, if you give powerful people too much freedom, and too little oversight, this is what happens.
Even a small country like Portugal seems to have a more efficient way of redistributing value, than the US.
Seems a bit silly, doesn’t it?
I would argue a more socialist approach would definitely benefit America.
If you give people cheap or free healthcare, education and well-designed social benefits, you’re taking away a really heavy burden of their backs. But you’re benefiting everyone equally at the same time!
I understand that social Darwinism dictates the smarter, better educated, healthier, should thrive more than the ones who aren’t. That is 100% agreeable, however, it does pain me to see so few people working towards a world where equality of opportunities is a value to be achieved and admired.
Capitalism Greatest Values
Obviously, you shouldn’t simply discard capitalism solely due to its bottlenecks. For instance, why are we nowadays so focused in rights and not responsibilities?
It seems to me my generation kind of forgot we’re expected to full-fill some roles, in order to maintain social order.
What about ownership? And how that concept is entangled to entrepreneurship, jobs creation and economic growth?
I understand we still need to care about people’s rights and to find improved new ways to shift value distribution. Nonetheless, we cannot disregard the important and righteous values promoted by capitalism.
Arguably, if we want to improve capitalism, we should be able to differentiate between good and bad outcomes, and (on principle) which policies contribute to the promotion of each.
My proposed solution to the inequality problem?
A Full 180º Crypto U-turn
The promise of cryptocurrencies is the decentralization of virtually anything.
With the creation, rise and adoption of Bitcoin and other P2P value-protocols, such as Ethereum, we now have tools to connect a digital currency to a specific product, platform, governance model or idea.
It doesn’t really matter how you apply cryptocurrencies, if your ultimate goal is to promote decentralization, then that’s exactly what will happen.
Look at the World Wide Web. The web 2.0
Sometime ago, close to 30 years, people decided they wanted to have a way to distribute and decentralize information, so that anyone in the world could access it. First people developed a full decentralized operating system, Linux, which today is the base for most android phones out there. Through mathematics, cryptography and network theory, people developed amazing P2P networks like Napster and Utorrent, sophisticated websites like Wikipedia and platforms like OSM, where anyone can maintain privacy and still create value through content creation or content sharing.
Has the dream of being able to share information instantly, not been achieved?
Last time I checked, we do have access to virtually any piece of information we desire, at the tip of our fingers.
The Web 3.0: Capitalism Done Right!
Right now there are hundreds of projects creating decentralized versions of known platforms as Google, Twitter, Facebook or Linkedin. Some projects like Steemit, The Brave browser or Wabi’s milk tracking app, already have deployed real-life applications running in a decentralized manner.
The trick for any product, platform or company creating a decentralized network is to properly implement incentives so that most benefits go to users.
Why wouldn’t you like to get paid for your online contributions? Or to share your data with third-parties? What if we start valuing everything that we do online?
The reason why blockchain technology is needed won’t be truly understood by most until we reach the point when we don’t remember how it used to be without its existence.
Just like the Internet or mobile phones.
The blockchain we know today, as a database or a ledger used to store bitcoin, will change in the next upcoming years as more people create ways to decentralize value distribution. Maybe all blockchains will interact with the Bitcoin blockchain and it will remain a standard, as it was the first.
The point is, whatever blockchain remains, we need to change how we measure value in order to allow for this technology to grow. The more we fight to keep it under a central authority, the harder it will be to leave that mind-set.
If tokens can represent virtually anything, sooner or later companies will start tying those into their business models and shifting from gaining value from users to giving value to users. As long as there is a token representation of a certain company, product or idea there are different ways to move from a centralized structure to a network, where all token holders benefit equally.
If our vision is to decentralize value, is there a better way to do it then changing how we earn it?
The Web 3.0 is nothing but a brand new way for organizations to give value back to users (the rightful owners of said value).
Capitalism, in its essence, is not really a bad thing.
Although it intrinsically promotes a greedy and selfish behavior, with the proper tweaks, we might achieve considerably positive results when it comes to wealth redistribution and inequality reduction.
At the same time, we can never forget it is our responsibility to look-out for the health, transparency, permissiveness and decentralization of the above systems.
Hopefully, with the right set of incentives, gamification techniques and game-theory mechanics, we’ll create a world where people are directly rewarded by companies, through work, governance or rewards crypto-tokens, promoting a better redistribution of wealth among participants.
Thanks for Reading!
Connect with me on twitter @febrocas
Disclaimer: this article shouldn’t be taken as financial advisement; it represents my personal opinion and should not be attributed to CryptoChats. I have savings invested in cryptocurrency so take whatever I write with a grain of salt. Do not invest what you cannot afford to lose and always read as much as possible about a project before investing.