Discover more from Reboot
Crypto, Co-ops, and Democratic Economies
THURSDAY: A roundtable debate on crypto’s progressive potential
It’s April 2023, and the crypto bubble seems to have finally popped. A first instinct might be to call it all smoke and mirrors—an especially well-marketed and well-capitalized fraud. (Certainly, a lot of it was.) But not everyone has left. There are still people who working to use crypto’s underlying technologies and mechanisms to support collective action, cooperative economies, democratic governance, and more.
Two years after the bull run began, we think it’s time for a retro. This Thursday at 5pm PT, Reboot is convening crypto advocates and skeptics alike for a sober conversation about crypto, organizing, and whether new technologies can actually help us build a better world. Hope you can join!
RSVP to the virtual roundtable at this link, or keep reading for our take on why the crypto debate is still worth having.
Crypto, Co-ops, and Democratic Economies
When we started learning about crypto during the 2021 price surge, we were of two minds. Crypto’s drawbacks seemed obvious: it was a vehicle for scams, crimes, and tax evasion. Crypto’s biggest advocates often seemed like those who seemed to benefit from its rise: venture capitalists, the CEO of every ‘blockchain for x’ company, and traders pumping coins in hope of quick money. Yet, simultaneously, crypto seemed to enable progress on immediate, unsolved problems—funding for public goods, platform governance, user privacy—and it felt hasty to dismiss a technology’s promise so quickly.
A few months later, everything crashed. UST, a massive, trusted stablecoin (a cryptocurrency pegged to the price of the US dollar), became virtually worthless overnight. FTX, one of the most successful and trusted exchanges in the space, went bankrupt, revealing widespread internal fraud and missing billions in customer funds. Most talk of crypto’s utopian promise seemed to hush to a whisper.
As the data points piled up, our fundamental questions remained unanswered: To what extent are crypto’s promises of usefulness true? Is public goodwill a way to reputation-wash the technology, distracting from harms? To what extent is crypto an inherently political technology, and, if so, what are its politics?
These questions have precedent beyond crypto. In his landmark 1980 paper “Do Artifacts Have Politics?” Langdon Winner explores the social relations modeled by new technologies through a Chicago agricultural reaper factory in the 1880s. These new machines, while far more economical to output, produced far worse castings, and would be abandoned after just three years. Their politics, however, were already laid bare: the skilled, unionized iron-molding artisans were replaced by unskilled, non-union machine operators.
The necessities—or lack thereof—of the new technology dictated the politics of its use and in turn, the politics of itself. As Winner writes:
To our accustomed way of thinking, technologies are seen as neutral tools that can be used well or poorly, for good or evil, or something in between. But we usually do not stop to inquire whether a given device might have been designed and built in such a way that it produces a set of consequences logically and temporally prior to any of its professed uses.
Bitcoin, the first widely adopted cryptocurrency, was certainly formed with political intention. When the first Bitcoin block was mined in January 2009, it contained a message, taken from a news headline: “The Times 03/Jan/2009 Chancellor on the brink of second bailout for banks.” Bitcoin emerged from discussions about ‘exit’ from traditional finance, and forming alternate ways to transact. Its affordances suggest this: unlike traditional banks, which can reverse fraudulent transactions and know the identities of all of their customers, the provisions for immutability and pseudonymity of most cryptocurrencies certainly make them well-suited for illicit markets, scams, and holding illegitimate sums of money tax-free.
Yet crypto is not a monolith: within its big tent are different blockchains, ecosystems, and artifacts. Ethereum was built to enable decentralized software applications, not just decentralized money. Vitalik Buterin, Ethereum’s chief architect, writes regularly about novel retroactive public goods funding, gives talks about “Things that matter outside of defi” (decentralized finance), and championed “decentralized autonomous organizations,” which could control funds and execute code only through the will of token holders. Like Bitcoin’s founders, Vitalik is skeptical of centralized authority, though he’s written that his concerns lie more with undemocratic governance than with big banks.
Many projects in the Ethereum ecosystem embody this ethos, building projects we might see as socially beneficial. Projects like Gitcoin1 and Optimism use the blockchain to fund open source software projects through novel mechanisms. Organizations like 0xPARC2 work on zero-knowledge cryptography—a way to verify a claim without revealing all of the data needed to make it—which promised real progress on privacy-preserving applications. Ambitious projects like Canvas promise real technological decentralization, and organizations like the ENS Foundation distributed tokens to give their users ownership and influence about how the platforms they used were run. NFTs helped artists get a cut of future sales in a moment where culture industries seemed on their last legs.
We’re still skeptical of some of these promises: a vote to remove a director of the Ethereum Name Service foundation for disparaging comments about the LGBT community failed by a margin smaller than the amount of ‘votes’ that director himself controlled. Token voting often strays toward plutocracy more than democracy. Additionally, we might wonder about what ‘public’ public goods funding addresses: while some organizations are working to broaden what crypto public goods look like (i.e. toward climate or mutual aid funds), their genesis is in funding software projects within crypto ecosystems, a limited framing of social benefit.
Of course, these technologies are only a few years old: the full expression of their use, both positive or negative, is yet to be fully explored. We see crypto as a site of examination for the high-level questions: How immutable are a given artifact’s politics? If possible, how do we remake tools to be useful for the society we want?
As a case study, we’re particularly interested in whether crypto could support cooperative economies. The conventional processes of funding and incorporating an organized cooperative are onerous. Structuring cooperatives as DAOs might allow for easier fundraising, more transparency, and clearly defined claims to ownership and profit sharing. Code isn’t law, but crypto may enable broader worker coordination across borders, or facilitate incentives for organizing between predefined groups. At the same time, problems of worker organizing are, ultimately, problems of human relationships—in the right hands, can new technologies catalyze solidarity? Similarly, how important are technological tools in addressing fundamentally social problems?
This bear market is the perfect opportunity to evaluate claims of whether crypto can meaningfully foster cooperative economies. Reboot’s Crypto Roundtable brings together experts across advocacy, academia and industry to discuss crypto, organizing, and the role of new technologies in building a better world:
Jessica Gordon Nembhard is a professor of Community Justice and Social Economic Development in the Department of Africana Studies at John Jay College of the City University of New York (CUNY) in New York City. Her research and publications explore “problematics and alternative solutions in cooperative economic development and worker ownership, community economic development, wealth inequality and community-based asset building, and community-based approaches to justice.”
Austin Robey is the co-founder of Ampled, a “Brooklyn-based ethical web platform that allows musicians to be supported by their community with direct, recurring payments. Structured as a co-op, Ampled is 100% owned by its artists, workers, and community (not VC investors) with the ultimate goal of creating a permanent vehicle for artist prosperity—not an acquisition or exit. He’s also a founding member of Metalabel, which builds resources, tools, and infrastructure for collectives and creative communities, and writes frequently about collective internet culture, shared ownership, and new models for the online creative economy.
Nathan Schneider is a professor of media studies at the University of Colorado Boulder. He’s a leading advocate for platform cooperativism, and leader of “Exit to Community (E2C),” an alternative framework to the traditional startup ‘exit’ which returns ownership back to platform stakeholders.
The panel is moderated by Jihad Esmail, a Reboot community member and community/media leader at Forefront DAO.
Reboot publishes essays reimagining tech’s future every week. If you liked this and want to keep up, subscribe below ⚡️
A brief history of the only perfect technology: the humble rice cooker.
ChatGPT for kids seems… kind of cool? Read's reflections on giving his toddler a GPT-powered voice assistant.
💝 closing note
From the community this week:
Jessica Rosenfeld put together a short and sweet guide to exercising stock options.
Eli Qian implores peers to stop trying to have “interesting” friends.
Toward better artifacts,
Jasmine & Reboot team
Reboot has received a 2021 grant from 0xPARC.