The Rationale (Part 1): Learning From History

It took all of 2 weeks for the world to make use of the financial model that I created for crypto, now known as the ICO. It took a few more years after that to make sense of the world’s first DeFi protocol that I introduced on that same day, in April 2014. That was the day decentralized finance (now known as DeFi) was born.

https://web.archive.org/web/20140626124054/http://karmashares.com/explorer-v01

They were originally created to empower the kinds of people who were unable to extract much value from traditional finance. Although many people have had life-changing financial events from the hundreds of billions of dollars flowing into crypto since then, the space itself is transforming into something quite different than what it is advertised to be about.

It is ironic that decentralized banking was invented by a powerful banking family as a way to manage their nefarious activities. The Medicis of Florence also owned the first bank that used a distributed ledger, allowing them to circumvent charging interest to clients — which was forbidden at the time by the Pope. Instead, Medici bank letters of credit craftily built interest into their clients’ foreign exchange transactions. Distributed ledger technology (DLT) allowed them to decentralize their foreign branches so they could scale up their lending — and profits — exponentially.

Over time, decentralized banking became more centralized. Today, both old and new types of financial entities are beginning to reap the profits that scaling up finance using the more advanced distributed ledger that blockchain allows. The promise of decentralization is again transforming into a centralized result. My 2014 method of economically empowering individuals in a fairly distributed way is now the debt layer of the new money stack. Where are these new kinds of profits taken from? Your pocket, of course.

Free market economies are, as time has shown us thus far, superior to all other methods of organizing human society. It is the compromise between individual freedom and the needs of an ever-expanding State. But as time unfolds, and as we will learn over the next few years, new methods of organizing human society are much less of a compromise.

As the need for interpersonal trust diminishes with the increased use of ‘trustless’ systems like cryptographic DLTs, so does the fabric that holds society together. Conversely, the friction that DLT removes from transactions will shift to interpersonal friction as we trust people less.

This is not going to be the Free Market 2.0 where the productive and enterprising get richer while others suffer the consequences of their own laziness or circumstances. Under no other system could a boy from a ghetto on Chicago’s South Side who dropped out of grade school while his single mother was dying from cancer go on to transform the world of technology and finance, creating not one, but two $200+ billion dollar markets. I know a free market economy when I see it, and there is no greater champion for its ability to transform lives completely wherever one might find oneself. I have also learned to see what others cannot see, and know when an opportunity is very different than what it seems to be.

The -ism that is before us now also has the ability to transform lives completely in ways that capitalism would never need to. And that is why I am compelled do things differently this time, to stay 10 steps ahead of the game.

Taking A Different Road

My latest effort is in developing a completely non-centralized framework that can be deployed anywhere, from markets to governance to retail and much more. It will also leverage smart contract-based artificial intelligence. It is important, however, that what happened with the ICO and DeFi do not happen with this. The moral and ethical concerns around introducing self-replicating artificial intelligence that anyone can easily deploy on blockchain is not something that people have to spend any time thinking about.

While almost everyone waits for news to pump their bags, someone has to think of how certain technologies might affect the world at large 5–10–20 years down the line and make certain that what is being released follows the most rational course of action, all things considered.

Disruption does things differently than people are used to. Disruption makes people uncomfortable, and might even seem a bit retarded or even offensive at first. They look like red flags, because they ignore business-as-usual and chart new territories. The status quo is easy for people to understand, but disruption is not. If most of us could see the future, we’d already be living it.

False Decentralization

In the current state of crypto, we are excited about a form of decentralization that does very little to distribute real power and authority. What we have is kabuki theatre that is both a virtue signal and an alpha of digital socialism. Where others see an ‘organic’ open-source movement powered by centralized entities, I see the removal of individual agency, privacy, and personal property. Where others are thinking to ‘be their own bank’ I see the ability to control where and how you can spend the more decentralized cash in your pocket. Is ‘Satoshi Nakamoto’ anonymous, or everywhere you look? Would you have ever used cryptocurrency if it was introduced by those you do not trust?

We are given control of a steering wheel that we think is driving a car but is not. Meanwhile, responsibility and accountability are shifting from clear hierarchical structures (and faces) to a vague outline of a team, and community that doesn’t really know what is going on. As long as there are shiny new objects and promises of wealth with which to distract ourselves, no one need notice.

And that is exactly why we are in the situation we find ourselves, and will continue to. This is the path that we have chosen. And it is exactly why I am taking the next step.

Continued in The Rationale (Part 2): Non-centralization

The AI Master Token — Artificial Intelligence Protocols on Fantom Opera Blockchain