We live in a world where blockchains and cryptocurrencies are well poised to play an important part, though for reasons much more complex than many people think and it has “as much to do with cultural forces as anything financial,” according to Ethereum (ETH) co-founder Vitalik Buterin, who also describes gold as “lame.”
In his recent article, Buterin claimed that the similarly complex forces will lead to blockchains and cryptocurrencies being useful.
While some would say an application can be done more efficiently with a centralized service, Buterin argued that social coordination problems are very real in practice, as is “unwillingness to sign onto a system that has even a perception of non-neutrality or ongoing dependence on a third party.”
Therefore, those “centralized and even consortium-based approaches claiming to replace blockchains don’t get anywhere, while “dumb and inefficient” public-blockchain-based solutions just keep quietly moving forward and gaining actual adoption.”
Buterin also shortly addressed gold, saying that “one of the more underrated bull cases for cryptocurrency that I have always believed is simply the fact that gold is lame, the younger generations realize that it’s lame, and that [USD] 9 trillion has to go somewhere.”
In the past 12 months, gold is down against BTC by around 66%.
Turning to some specific points he mentioned above, Buterin wrote that people are motivated by their earnings, as well as other factors, such as social status, honor, altruism, etc. Therefore, if a job is considered “immoral,” the employees would have to be paid more, or in many cases, people would work for free if they think a project is good, and not do it at all if they think it’s bad.
“This is also likely why blockchain projects that raise a lot of money but are unscrupulous, or even just corporate-controlled profit-oriented “VC chains”, tend to fail: even a billion dollars of capital cannot compete with a project having a soul,” argued Buterin.
But he warned that it’s possible to be “overly idealistic about this fact” in several ways:
- The decentralized, non-market, non-governmental subsidy toward socially good projects is massive, likely amounting to tens of trillions of dollars a year globally, but “its effect is not infinite,” wrote Buterin. Developers would likely choose to make a USD 30m ICO “by sticking a needless token into their project than USD 30,000 per year by being “ideologically pure.”
- “Idealistic motivations are uneven in what they motivate.” While political activism doesn’t require payment, longer and more demanding tasks are “not so easily intrinsically motivated.” Therefore, relying too much on intrinsic motivation results in projects where some tasks are overdone and other tasks are done poorly/completely ignored.
- Perceptions of what people find intrinsically attractive to work on may change and may be manipulated.
This is where culture and narrative come into play, as these are the deciding factors when “a project having a high moral standing is equivalent to that project having twice as much money” – culture and narrative “command the equivalent of tens of trillions of dollars of value,” wrote Buterin. Having such influence on finance, the two will be systematically utilized by different actors in what may become a “cultural war.”
While economics and politics were more typically split apart in the 20th century and in the 21st century, the lines between “private” and “public” are rapidly blurring again. “Governments are behaving more like market actors, and corporations are behaving more like governments.” And this is a merge we see happening in the crypto space as well “as the researchers’ eye of attention is increasingly switching focus to the challenge of governance, Buterin concluded.
Crypto Adoption in 2021: Bitcoin Rules, Ethereum Grows & Faces Rivals
Economists Speak of ‘Once-in-a-Millennium Change’ in Monetary History
Ethereum Foundation Sold ETH To Novogratz At Premium In 2015
Bitcoin vs. Ethereum Fight Escalates amid Fresh Capital Entering the Space
Ethereum King Buterin Loses Live Showdown to Twitch Chess Queen
Did Vitalik Buterin Just Say That Ethereum Is Now More Important Than Bitcoin?
Money is a ‘Kind of a Fair Game,’ says Vitalik Buterin
“Ethereum Is (Not) Money” Trigger Tested Again And It Still Works